This morning, I was contacted by a real estate agent from Tuscon, AZ today asking for some help with finding property management companies in Wichita, KS. I currently own 2 properties in Wichita, a 4-plex and a duplex, and right now my brother manages them for me. In Kansas you don’t have to have a real estate license to manage property as long as it is 4 units or fewer in number. In Washington, if you are managing another person’s property, that is not a family member, you must be licensed to receive compensation.
Anyhow, this agent asked me if I had a firm I could recommend in Wichita since she had read the less than flattering review of another company that I used previously. I sent her an Excel spreadsheet that I had my assistant put together for me with a list of questions that I gave her to use to pre-qualify the companies she found online. Here is the list of questions I used; perhaps you will find them useful too. These are by no means a comprehensive or exhaustive list of everything you should ask, but it’s a start and can lead to additional information you may want regarding the company you’re considering hiring. These questions are reasonable for both in-town and out-of-town landlords to ask a management firm.
1. What are your management fees on a monthly basis? Are the fees charged before or after expenses are paid for the month?
2. What are your “lease up” fees for getting a new tenant?
3. Is the cost of advertising wrapped into the lease up fee or is the owner charged separately for these costs?
4. What advertising methods do you use? Do you do a combination of print and online advertising? Is advertising on-going or only as vacancies arise? Do you pool fees from multiple clients to do annual on-going advertising?
5. What are your reporting methods for financial data? Will I get an annual statement at the end of the year besides monthly statements?
6. Do you offer annual maintenance agreements or other methods to check-up on the properties under your management?
7. How is maintenance handled on an ad-hoc basis? Do you have your own maintenance staff or do you hire out?
8. How do you handle the move-in/move-out checklist for tenants? Are digital photos taken during the move-in/move-out periods to help augment checklists to secure deposits and to handle charging for damages above normal wear and tear on a unit?
9. Do you require the use of your own leases or do you allow other leases to be used on properties your company manages? And, if you use your own lease, will you provide a copy for me to review prior to signing up with your firm? Has your lease been reviewed by an attorney?
10. If an out of state owner wants or needs work done can your firm help to manage the work, and what is the cost to manage it? If I have a preferred company to use for a certain type of work (eg. plumber, electrician) will you work with them as well?
11. Does your firm also sell property? If so, will you require me to use your services to sell my property when I am ready to sell, or is that negotiable if I already have my own agent that I prefer to use? Will the decision to use another agent raise the cost of the fees you will charge me?
12. Will you provide a list of references including other out-of-state owners that I may contact?
13. If I have a large number of units or buildings to manage, is there a discount applied or available to negotiate if I turn them over to you for management?
14. What is your coverage area for property? Do you limit your business geographically or to certain types or sizes of property?
15. How do you handle doing background and credit checks on rental applicants? Do you do full criminal background checks and, if so, how far do you search (eg. local, state, national). Does your background check include registered sex offenders? If not currently, will you consider doing it for my business?
16. Do you track local market information regarding rent levels, vacancies, etc and do you share that information with your clients?
17. How do you handle notices and evictions with tenants? Have you ever had to appear in court on tenant related issues? What was the outcome of any such court action?
18. Do you belong to any professional organizations for property management? Does your staff have on-going training or educational opportunities related to your field of expertise?
19. Are you licensed? Do you have a copy of local landlord/tenant laws in your office for reference? How do you handle or deliver necessary disclosure forms for tenants?
20. How do you handle Fair Housing requirements in your area? Do you use the same process for each applicant? Have you ever had a Fair Housing complaint made against you or any of your clients? How do you handle section 8 tenants and the yearly reviews that are required?
These questions aren’t listed in any particular order but you may find them useful. Even if you’re looking to manage your own property you might consider asking yourself these questions to determine how you’ll handle these things on your own.
For those readers/landlords in the Seattle and surrounding area I would suggest getting to know the Rental Housing Association of Puget Sound too. They are a great resource for information, forms, education and more. Check them out at http://www.rha-ps.org
