Sooner or later as a Real Estate investor we might have to make the decision to hire a Real Estate Management company to manage our properties we own and hold.

As a landlord we never think twice about interviewing and running a background check on the tenants before we sign a lease with them but how thoroughly are we checking on the Management companies we are hiring to manage our properties.

Sure the first deciding factor might be a referral from fellow Real Estate investors but we still have to do our own due diligence before we hire a management company.  When we own properties that have 10 or more units a single family property manager might not be the right fit for us or when we need a property manager for 40+ properties a manger who managed only 10 or 20 might not be able to handle the extra work load.

We should find out about their current education and ask about their real estate license. It is very simple to check with every state licensing agency to find out if the Manager we would like to hire is a real state professional in good standing. With that we can find out very quickly how long they have been in business.

Great way to find out about property managers knowledge is to ask them about the landlord and tenant law and about local codes that affect rental properties of any type. We also should find out from them how many tenants they have evicted and how they set and or adjust the rents. This will show us if they have good screening processes in place and if they keep up with the current rental market.

Other questions we should ask the property manager are about the handling and storing of the income, tenants security deposits, the handling for repair issues that surly will comes up and what their fee structure is. It might be better for us as owner when the fee is based on rents collected. With that we don’t have to pay for vacancies and the manager has a reason to keep the units occupied. We also should find out if the property management company charges any additional fees, like an eviction fee.

When it comes to the repairs we should find out from the real estate management company if we need to give them money upfront for repairs, if they call us for repair requests, how they account for the repair money spend. How long is the responds time for repair requests? Do they have contractors on call for repairs? Do they get repair estimates or do they rely on their current contractors to do the job?

We should ask about property inspections? Do they do them and how often.

One thing I personally look at as well is the type of lease agreement they use with the tenant they are handling. I have seen some very ugly lease agreements that could hurt us as investors and could get us in some possible legal trouble.

Is this list complete….I don’t think it ever will be but it should give you a good start….