The portfolio of properties under management include residential townhouse and apartment communities, retail plazas, industrial parks, commercial office buildings and a wide array of land holdings.
OPG also provides real estate consulting & project management through our Project Management & Advisory Services division.
Our approach is to develop a unique service delivery for each property under management to ensure the property owners and the community of tenants are provided with quality service, comfort and peace of mind.
Picking a great property manager for your rental properties is one of the most important tasks you’ll undertake, once you’ve actually found a good rental. In searching for a manager, you’ll want to do a thorough interview, and in doing so, you should be able to figure out if they are worth working with. Here are some questions you’ll want to keep in mind when interviewing managers.
Questions to Consider When Interviewing Property Managers
Managers generally charge a monthly fee to watch and maintain your property. Those fees can range from as low as 5% or so, to upwards of 20%. Obviously, you should look for a company that charges less and provides more services.
For me, communication with a manager is of the utmost importance. I need someone who uses email, and is responsive to both the telephone and email. If I don’t get a response back in a timely manner, it is time to walk. In addition, you need someone who can deal with you and your idiosyncrasies. Some of us are needier then others. You want to let companies know up front where you stand, and make sure they’re willing to be flexible for you.
- Termination of your Agreement
In the event that your “relationship” does not work out, you want to know up front what exactly it will take to terminate your agreement. Is there a charge for breaking your contract? Penalties?
- Repairs and Maintenance
Does the company have their own maintenance crew, or do they contract out to a handyman? How much do they bill out at? Can they handle all kinds of repairs? What happens if they can’t do something? Do they have other contractors that they work with? In addition, you probably want to have a maximum that the company can spend without contacting you. Generally, I will allow my managers to do what they need to as long as it is for something under $100. I must confirm any expenses over that. If you are a bit more of a control person, you can also request invoices/receipts for expenses.
- Monthly Statements
Does the company send out monthly or quarterly statements. I wouldn’t deal with anyone that does not provide monthly income/expense statements.
How does the company handle evictions? What are the costs to evict?
- Yard Work
How much do they bill yard work out at? Landscaping? Do they handle snow removal? Mow lawns? How much does each cost?
What kind of reserve does the company require? The reserves are used in case anything comes up. Most managers will require a certain amount.
When will the manager mail your check to you? Beginning of the month? Provincial laws usually dictate accounting rules for managers, but you want to know all of this up front. Tenant Deposits: How do they handle deposits? Are they comingled, or simply put together with all other income for your account?
I’ve actually interviewed companies that will charge you 1/2 a month’s rent to fill vacancies in your property. I quickly ended my interview with these people. There is no reason to pay this fee, since many managers don’t need to charge it. You will need to fill your vacancies, so you will need some advertising done.
Where do they advertise properties? Are for rent signs put on the property’s lawn? Do they advertise in the paper? Online? There are quite a few effective places to advertise properties for free, online. Do they use these? In addition, you want your property advertised effectively. Do they have the basic HTML skills to add images to their for rent ads online? This makes a huge difference, trust me.
I also like to know how many properties they manage, how many managers work at the company, what specific areas they focus on, how long they have been in the business, and other questions about their experience. This should be a good start to get you going.
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In real estate property management, the property manager or management company has four major areas of responsibility:
- Marketing and Financial
- Tenant and Occupancy
- Administration & Risk Management
The property manager is the owner’s partner in maximizing the return on investment of the property through efficient performance of these four functional areas of responsibility. The property management company acts in the best interests of the owner to maintain the property, keep it occupied with tenants, collect rents, budget improvements and maintain records. Many real estate professionals have looked at property management and changed their minds when the scope of the management tasks and record-keeping are fully understood. It’s definitely a niche for the more detailed and responsive in the profession.
Marketing and Financial – Real estate property management involves understanding of operating expenses and budgeting. From this information, appropriate rental rates are set, balanced by the current market and what it will support in the way of rents. A firm knowledge of the area and competitive rental properties is required. The property manager may recommend marketing programs, special promotions and other advertising strategies to the owner in order to maximize occupancy and rental rates. Regular financial reporting to the owners is required. Understanding financial statements, profit and loss, income taxes and budgeting are all very important for the property manager. More on the marketing & financial function.
Tenant and Occupancy – Understanding the needs of the tenants is important for this function. Getting them to move in is only the beginning. The property manager must then respond to their requests, monitor their activities as regards the lease requirements, collect rent in a timely manner, and continually assess the tenants’ satisfaction as regards the property’s amenities versus those of competing rental properties in the area. The unwelcome task of eviction for violations or non-payment is part of this function also. More on the tenant management function.
Facility Management – Property management is also physical management of the structures and outdoor areas. Landscaping, electrical, plumbing, roof, walls, appliances, and much more are all part of the physical property. The property manager must maintain relationships with contractors and repair companies, budget capital expenditures, and monitor the quality of all repairs and maintenance. This function ties in with the financial piece, as some improvements will require significant capital expenditures and budgeting for them. It ties in with tenant and occupancy management because it is important to tenant retention to have well-maintained properties. More on the facility management function.
Administration & Risk Management – This is the files and records part of the property management function. Federal, state and local governments all have some jurisdiction over real estate property management activities. Certain reporting requirements must be met for all of them. Meticulous records for accounting and taxes are a must. For reasons of liability, all activities and tenant interaction must be recorded and maintained for specified periods. Though also related to financial functions, there are very rigid requirements in most states for the handling of funds paid by renters for disbursement to owners. More on administration and risk management.