“What do you charge for property management services?”
This is undoubtedly the first question that homeowners ask when they interview a property management company. While I truly believe the fee structure of a property management company is important, it should not be the deciding factor when choosing a company for your management needs.
As the owner of one of the largest leasing and property management companies in St. Louis, I have been afforded the opportunity to have a front row seat to some of the mistakes that owners make when choosing a property manager.
It happens all too often. Homeowners call me and say, “Seth, I’m just not happy with the way XYZ Company is performing and I’m looking to make a switch, can your company help?”
Well, of course we can help! We would love to!
But, I’m here to warn you, if you are planning on interviewing companies and going with the lowest bidder, expect a level of service that is proportional to the price you are paying – low.
Let me pose it to you this way: Your home is one of your largest assets, do you really feel comfortable leaving it in the hands of the lowest bidder? I wouldn’t be. In fact, it would frighten me!
After many years and many phone calls, I realized there was something I could do to help St. Louis homeowners BEFORE they ended up making the frantic phone call to West End; a few words of advice that could save them time, grief and money regardless of whether they choose my company or another.
It’s simple, really. Ask better interview questions!
If you’re in the market for a residential property manager, take these tips into consideration:
- Hold-off on firing the pricing question until you have built a better picture of the company offerings and the expertise they are providing. Start off by asking in-depth, detailed questions about the company’s procedures and knowledge base. This approach will help you gain a better understanding of the service value of the company. I have included some sample interview questions to help wet your beak.
- How does the lease process work from start to finish? An experienced professional will not hesitate to leap into answering the question. They have probably answered and conducted the lease process so many times they can answer the question while scrambling eggs.
- What is the procedure in the event a tenant wants to get out of a lease early? If a company doesn’t have a procedure in place, then consider moving on immediately. You need to feel assured that a company knows how to handle stressful, complex situations.
- What is the maximum-security deposit that can be collected in the state of Missouri? If your property manager doesn’t know the answer to this or tells you they will get back to you, they shouldn’t be in business. Hang up the phone immediately.
- What are the maintenance issues that you run into most often as a Property Manager? Every owner deserves to understand the likelihood of a maintenance issue occurring within their home. I have personally conducted a survey using historical data from our own maintenance requests and would be happy to answer this question for you.
- Will you be my only point of contact or will I talk to somebody different every time that I call? Nobody wants to get the runaround, especially from their property management company. If you’re talking to someone new each time you call, are they really going to know you or your property? Unlikely. Make sure you have one point of contact.
- Now that you have determined that a company has the experience, knowledge and reliability to handle your property, it’s time to talk fees. Make sure you touch on the following topics during this portion of the interview process:
- What is your tenant placement fee? This fee generally covers marketing the property, showing the property, running tenant background checks, municipality inspections and composing the lease for the owner. Some companies (like West End) will even help facilitate necessary repairs. This fee is generally equivalent to one month’s rent, depending on the area of the country you are in.
- What is your ongoing property management fee? This is a monthly fee commonly calculated from the gross monthly rent. For instance, if your rent is $1000.00 per month and the management fee is 7% of the gross monthly rent, your cost would be $70.00 per month.
- Are there any other fees associated with your service? Many companies with low management fees will nickel and dime for admin fees, marketing fees and who knows what else! Make sure they disclose ALL the expenses upfront and when you review the agreement, beware of the fine print!
Of course, these tips only scratch the surface of the complexities involved with leasing and managing a property, but that’s why you hire a professional manager – to take some of the stress out of it! And remember, there’s so much more to consider than just a low fee structure. Make sure to measure experience, knowledge, responsiveness and reliability. It will pay off in the long run.
If you want to know how West End Management & Leasing answers these interview questions, please contact me personally at firstname.lastname@example.org. I would be happy to help and earn your business. 😊
About The Author:
Seth Reeder is the Owner/Broker of West End Management & Leasing, one of the largest residential leasing and property management companies in the St. Louis area.