Property Management: Top Questions CRE Investors Should ask Property Management Companies
If you have a commercial real estate company and you’re looking for a property management firm to handle things for you at one or more locations, there are some questions you should be asking, in order to make sure you have the right firm in charge of things. These questions can shed some light on how competent and how capable they are of representing you if selected as your management company.
The main questions to ask in this area are about the kind of properties the firm already manages, how many properties they currently manage, and how long they have been in business doing property management for commercial real estate companies.
Specific Site Questions
Assuming you have a particular property in mind for purchase, when interviewing a property management representative, you should ask about which areas in town have low vacancy rates, but are still considered to be favorable rental markets. You should also ask where they would invest locally, and why that particular area would be attractive.
It’s important to learn a little about the details of operation for any property management company you’re thinking of doing business with. Ask them how many people are on staff, and how management accounts are spread out among each of the individuals on staff. Find out what their processes for screening tenants, how they handle late rent situations, and what their eviction process entails. You should also know what their policy is for repairs and maintenance, what their fee structure is, and how they will go about increasing your profits.
It’s good to know what kind of accounting statements will be provided by a property management firm, as well as how each month’s income will be deposited into your account. You should also be sure that any contractors used by the firm have their own Workmen’s Compensation insurance and liability insurance. Finally, don’t forget to make sure that your property management prospect is actually licensed for this kind of work.