Here are a few questions to ask when choosing a property management company:
What fees are charged?
Most property management companies charge a monthly management fee. The average fee on the island of Oahu is 10%. There are a couple of the larger companies that charge 12% per month. There are also a few discount companies or real estate agents that do property management as a side business that may charge 8%. However, most professional property management companies charge 10% of the monthly rent.
Are there any hidden fees?
Some companies may charge a discounted monthly management fee below 10%, then include additional ala carte fees for additional services such as advertising fees, set up fees, minimum management fees when the property is vacant, and a host of other types of fees. Make sure you fully understand that fees are being charged for all of the services that you will need in the management of your property.
How many homes, and what types do they manage?
Many companies and individuals offering property management services today specialize the buying and selling of real estate and offer property management as an additional service to the real estate brokerage. Some may manage just a handful of properties. You may want to make sure that your property management company specializes in offering property management services. Professional property management companies will often specialize solely in property management services.
How many homes do they lease per month?
Companies and individuals that offer property management services as a side business may lease out just a few properties per month. Some may rely on the same advertising and marketing strategies used when marketing a property for sale. Professional property management companies will utilize unique and specialized marketing and advertising strategies to market a property for rent which are different tools and strategies than listings of properties for sale. Make sure the company you are working with knows the difference.
What are their average days on market?
How much will an additional 30 days on the market cost you? The average days on the market for the average rental property in Honolulu is approximately 56 days. A professional property management company can likely rent your property in 30 days or less. How much would an additional 26 days cost you when renting out your property?
How quickly do they get your monthly rental proceeds to you?
While professional property managers will often have proprietary software to collect rental payments online and accept ACH payments and credit cards, others may still be waiting for the rent to arrive in the mail each month. Then send the owners their checks through the mail at the end of the month. Make sure your property manager is using the latest tools and technology to collect rent and to get your payments to you each month.
These are just a few of the questions you may want to consider when choosing a property management company. Click here for a summary of the common services provided by property management companies.
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You make a really good point about asking the company about the types of properties that they manage. Like you said, different companies specialize in different types of buildings. Plus, I think that very different strategies are needed to manage an apartment complex versus a house. After all, an apartment complex needs a lot more maintenance than a single home.
There are quite a few rental places around our house, and I was curious about how someone would hire a company to take care of it. It’s interesting that there can be some hidden fees for advertising and additional fees. It’s nice that these companies can actually get your brand out there, and get people into these rentals.
I really like that question on the number of homes that the company leases per month. I wouldn’t have ever known that a property management company should only lease out a few per month. However, it makes sense, especially since leasing can be such a time consuming project. it would probably take a lot of time and effort to get a property rented out, and you want to be sure that more time is spent on actually maintaining facilities.
There are a few apartment buildings around my house, and we were curious about how you would choose the right property management company. One thing that really stood out to me is that you say to find out their marketing strategies and see what they do. It would be nice to know that they will be able to get people to rent out your buildings.
I like that you talk about checking what properties they handle and making sure they specialize in management service. If they specialize in it, it could show that they have the skills and qualifications necessary to provide you with the best assistance. Before you make your decision, you’d probably want to meet with the property management company so you can talk to them about what types of services they offer and if they’ll be able to provide you with the assistance you need to run your business to help you and your tenants.
Awesome point about asking the company about the types of properties that they manage. I find it interesting that there can be some hidden fees for advertising and additional fees.
I totally agree when you said that one should fully understand that fees are being charged for all of the services that they will need in the management of their property. My dad has a property that he wants to be rented but doesn’t always have the time to check on it. I’ll mention to him that he can consider getting property management services and make sure that there are no hidden fees when it comes to his chosen company.
It’s great that you’ve mentioned that one should choose a property management company that utilizes the latest tools and technology to collect rent and get the payments to the property owner as soon as possible. My mother has a small property that she wants to get rented but she is not that good when it comes to managing everything related to renting properties. I’ll mention this to her so that she can consider hiring a property management service to help her with the management and at the same time collect payment at the soonest possible time.