Updated and republished: 02/13/2020
Your property management partner should be an asset to you across the entirety of your experience of being a real estate investor—so choosing one you can trust is vital.
Whether you are already an experienced investor looking for a better Orlando property manager, or a newly-minted landlord who is just getting started, vetting your potential partner benefits your current—and future—portfolio. Ask these four questions to ensure that you have a good understanding of the way a particular property management company does business—and how working with them will increase the value of your Orlando investment properties.
1. "What Is in Your Contract?"
The conversation you have with your potential Orlando property manager ought to match the kinds of terms they are giving you in their contract—too many surprises can be a bit of a red flag.
What Are You Getting Into?
Make sure you understand what you are signing up for! For instance, if a contract is scattered with legal jargon concerning automatic renewal, you need to know this—and be prepared to make your choice before the renewal takes place.
Consider the terms of service: how long are you committed to a property management package—and what are the cancellation fees if you choose to end the agreement?
- These kinds of fees should be spelled out upfront—not hidden away.
- An expert Orlando property manager knows that you want to get great value for your money—and they will level with you on what their needs are in the case of early cancellations.
Speaking of cancellations: what are the terms if you choose to cancel your contract, but the tenant placed there wants to stay? Does this mean additional fees for an investor? Different property managers handle this circumstance in different ways, but you want to know ahead of time what this means.
Yes, asking a lot of questions about cancellation can seem premature; after all, you are vetting this property manager because you like what you see! However, you can keep things positive: talk about how knowing the exact contract helps prevent misunderstandings in the future and makes cancellation less likely—not more.
2. "How Do You Set up Your Company?"
Most property management companies in Orlando fall into one of two styles of management: "Portfolio Style" or "Department Style." Both methods can be run well—but knowing upfront can help you learn what works best for you.
Asking about this style will help you understand if you might be working with a single property manager who does all the work for a given property. In this case, everything from marketing and advertising the property to showing it and screening applicants would be handled by one person.
- The property manager in question will also handle any landlord-tenant interaction, interim and move-out inspections, lease renewals, notices to vacate if needed, and final security deposit settlement statements, to name a few duties.
- The advantage is that you always know the person who you are working with—since only one person is in charge of your investment properties.
- However, that's your entire portfolio in the hands of a solo Orlando property manager—so you want to be doubly sure you trust this person's qualifications and expertise.
This style of company means your portfolio will be worked on by a diverse team that devotes each kind of task to a different department, like:
- Client Services to handle applications and tenants
- Operations to cover marketing and advertising
- Maintenance and Inspections to handle the crucial upkeep of your properties.
Out of necessity, each individual develops in-depth expertise in their particular category. Still, you have to know who to contact to get prompt responses when you have a variety of concerns surrounding your investments.
Again, well-managed companies can function in either way—but you'll want to know what style your Orlando property manager falls under and pick whichever is suited to you and your portfolio.
3. "How Do You Screen Applicants and Manage Tenants?"
These two elements are incredibly crucial to the long-term potential of any property management relationship. After all, an approach that is too relaxed can result in dissatisfied or poorly-screened tenants that can damage your Orlando investment properties.
Your prospective property management company should be proud to share their process with you:
- How much outsourcing occurs versus in-house screening?
- What factors do they consider before approving a tenant?
- What kinds of policies do they use to mitigate high-risk tenants?
Ask technical questions, dig into their accounting software, and investigate how easy it is to report issues like defaulting or damages owed to the major credit agencies.
While no one likes to imagine that they will have tenants that break their commitments or harm your properties, you must know how these circumstances are handled in advance.
4. "How Do You Report Your Property Inspections?"
This question is the specific version of a much more general query that you want to have answered, which is about the way that communication occurs between the property management company and you, the investor.
You get to the heart of this by getting clear answers on questions like:
- When an interim or move-out inspection is performed, what is provided to the investor in terms of a report?
- Does the report include date-stamped pictures—especially if an investor requests them?
- Does the report include areas of concern (deferred maintenance) with an action plan to address them?
- Does it include information informing investors about the need for future cosmetic updates, so that owners can prepare for such costs?
You Vet Your Tenants—Why Not Your Property Manager?
These questions provide you with the details you need to help you prepare and understand how thoroughly (if at all) a company expects you to monitor your properties. They also give you information on the attention to detail expected in general at the company. If these requests are met with skepticism and disinterest, you are learning things about the way they respect thorough work.
The goal with all four questions is to get answers, but ultimately, you gain additional insight into:
- What they are willing to do to deliver excellent service and maintain your profitability
- Information about how far this property manager will go to win your business
- An understanding of how responsive they are to new ideas, or (if the questions don't seem new to them), how experienced they are.
Choosing the wrong management company jeopardizes your Orlando investment properties! At Verandah Properties, we are passionate about our industry and can help you navigate the decision process. Contact us today for a private consultation!