Today we’re talking about the 4 things you should ask your property manager.
First of all you’re probably thinking about fees so top of the list you need to ask that PM what are their hidden fees.
They’ve already disclosed to you what their management fee is, what they’re leasing fee is to secure a new tenant for you, but a lot of property managers have some other fees that can really stack up.
First of all property managers love to hit you with a steep lease renewal fee… so does the property manager charge a quarter or a half months rent just to renew the lease? Typically it is very common for a property manager to have a lease renewal fee but it should be small, it should not constitute a big portion of a month’s rent.
They also might be charging you on boarding or setup fees, annual Administration fees, upcharging maintenance. Maintenance is a way that some property managers create a profit center for their business.
You want to avoid that. So if they have a $100 repair job on your property do they charge you a 10% markup?
Another way they do this iis by having in house W-2 employees who do maintenance, and how that works is ABC Property Management sends their guy out to repair your house and it’s ABC Property Management who is invoicing you for that repair, and that allows him to make some money off of the job.
A good property manager has no profit center and no motive to do repairs.
Thrid, what warranties does the property manager offer to you? For instance, at Whole Property Management, we offer a tenant warranty. If the tenant breaks their lease early or we have to terminate their lease, we replace them – re-lease the property – free of ccharge.
We also offer a pet warranty – if a pet damages the property beyond what the tenant’s security deposit will cover, we’ll cover excess damage up to $1000.
What about a maintenance warranty? We will warranty any maintenance or repair done to your property and if there’s an issue with the job we’re going to go ahead and get that fixed and take care of it, pay for that.
Fourth, does the property manager have a term contract? A lot of property managers like to have a term contract for a year or so before you can cancel, or you owe them the rest of their management fees, or a percentage of their outstanding management fees for that contract.
Or they might have a flat cancellation fee. You probably want to avoid a property management company that has any kind of contract cancellation fee because at that point they think we’ve got them for this amount of time and they’re not as motivated to perform for you, because it’s harder for you to get away from them.
And just as importantly, having the appropriate commercial, residential, or tenant insurance coverage. You don’t want to risk losing your property over some unforeseen circumstance such as fire, theft, or flooding. Insurance can work for you! Your best bet is an independent insurance agency in Denver that can help find the best protection for your business.
If you have any questions you can always reach out to me at firstname.lastname@example.org or on my direct line at 720-735-0513.