Questions and Tips on Selecting the Right Property Manager for You
1) What professional affiliations do they belong to?
Idaho does not require our property managers to be licensed nor is there any regulating body. So unfortunately, most property managers have very little training or guidance. Select a property manager that is licensed or is affiliated with a professional organization and has been professionally educated in property management. Many of First Rate Property Management’s employees are members of the National Association of Residential Property Managers and several hold the Master Property Manager and Residential Management Professional designations. Tony teaches property management at the Idaho Real Estate School and all across the nation. Tony served as NARPM’s 2011 National President. Additionally, First Rate Property Management was the second company in ALL of Idaho to become a Certified Residential Management Company.
2) What type of property do they specialize in?
Some companies specialize in single family homes and other companies specialize in large complexes. Pick a property manager that specializes in your type of rental. First Rate Property Management does not specialize in large apartment complexes. Our portfolio consists of about an even mix of single family homes, and multi-family rentals, such as duplexes, triplexes, and four plexes.
3) How long have they been in business?
Experience and track record is important. First Rate Property Management has been in business since 1994 and Tony has been managing properties since 1990. Altogether, First Rate Property Management has over 50 years of experience within the property management industry.
4) How did they become a property manager?
First Rate Property Management came about because our owner, Tony Drost, MPM® RMP® was purchasing his own rentals and saw a need for professional management in the Boise area.
5) Request a list of three current clients who you can contact about their property management services.
Please check out our references and read our testimonials.
6) Request a list of three past clients who you may contact about their property management services.
Please feel free to ask us for ours. We typically choose clients in your immediate area. For example if you are an investor in the Bay area, we can provide you names of past or current clients that live in your area.
7) Ask the property manager if they own rentals as well?
Generally this indicates more of an “owner’s mentality”. An Owner’s Mentality is cautious about costs and always analyzing return on investment. First Rate Property Management’s owner, Tony Drost MPM®, RMP®, owns or is part owner in over 200 rental units and has trained the staff on how to meet the needs of the investor. Most investors want to keep informed as to what is going on, but not be bothered with minor detail issues.
8) How many people are in their company/office and what are their duties?
The average employee to property ratio is 1 employee for every 100 properties. The lower this ratio, the more care you can expect. First Rate Property Management has maintained an employee to property ratio of one employee to 55-65 properties or better for nearly 20 years now. First Rate Property Management does utilize state-of-the-art technology to be as efficient as possible, but we provide so many extra services, at no additional charge, that we require the additional manning. By having fewer units per person, First Rate Property Management is able to address issues right away.
9) How many properties do they currently manage?
In general, the larger the company the less the personal service you can expect. However a lot of this has to do with how sudden and recent the growth was. First Rate Property Management limits its growth. We are not out to conquer the world. We focus on service and quality and then grow as needed to meet our clients' needs. Recent and rapid growth can be a red flag. Over the past decade, we have seen the rise and fall of many companies and sudden and rapid growth seems to be a common trait.
10) What areas (if any) are they limited to?
Markets vary from area to area and it is important to find someone that specializes in the area in which your rental resides. First Rate Property Management specializes in the Boise, Meridian, and Eagle areas. However, if you have a property outside of our area, we can provide you with a referral to another professional company.
11) What is their advertising and tenant lead generation procedure? Who pays for advertising? Do they have a website and can tenants apply on-line? Do they have virtual tours?
Often Owner’s think that advertising is paid by the management company, when in actuality it is most likely charged to the Owner. You will want to know what a full month’s worth of advertising will cost you and what different media does the manager use. For example, First Rate Property Management posts our listings onto our website, which feeds to nearly 200 additional sites. Of all these sites that we advertise on, about ten of them have superb search engine placement, to include our own site. We do some traditional print advertising and tend to change it up depending on the current promotions. First Rate Property Management’s website includes virtual tours, additional photos, detailed property descriptions, and has both owner and tenant portals that give them secure access to their information. First Rate Property Management offers many on-line services, such as on-line maintenance requests, on-line applications, on-line payments, on-line"How To" videos and many more.
12) What is their tenant screening procedure?
Some property mangers in Idaho do little screening. Many owners are very tempted to go with these companies, because they also boast higher rents. Unfortunately, that tends to be a short term gain as the damages, eviction costs, and re-rent costs are much greater. It is advisable that you select a Property Manager that utilizes a professional screening company to verify: credit, criminal background, Landlord references, social security ID check, and employment. First Rate Property Management uses such a screening company. As a result, our eviction rate is less than 1/10 of 1%. That is a more efficient approach to increasing the bottom line than getting a higher rent from a less qualified tenant.
13) What is their tenant move in procedure?
You’ll find that most property managers in our area don’t find value in conducting walk thrus with the tenants. It obviously reduces overhead costs. First Rate Property Management conducts a thorough move-in inspection with the tenant and annotates damages and tenant concerns in writing and with photos. Additionally, our lease and other forms protect our owners.
14) What is their maintenance and repair policy? If they have internal maintenance, what is the hourly rate?
Regardless if the property manager has their own maintenance division or utilizes contractors, you should request a copy of their liability and workers compensation insurance policies as well as a copy of their contractor registration. First Rate Property Management does not do any of its own maintenance or repairs. We sub it all out because we would rather place our focus on our expertise, which is property management, not property maintenance. We are however, a General Contractor. We utilize a state-of-the-art work order system that tracks all maintenance requests. Our owners receive copies of each work order via email. We have an on-line system making it easy for our tenants to trouble shoot problems and request repairs. Because of our volume, our vendors tend to give us better pricing than most builders. Also, our contractors do an average of 60 turnovers per month. They have gotten very good at their job and there is no longer a learning curve. So if an owner is able to find someone with a lower per hour rate, we typically find that it takes this person twice as long to do the same work and therefore the actual cost to do the work would be more. First Rate Property Management is very happy with our contractor pricing and quality of workmanship.
15) What is their move out procedure?
Just like move-in inspections, you’ll find very few other property managers that conduct move-outs with the tenants.
First Rate Property Management conducts very thorough move-out inspections with the tenant. We compare move-in to move-out inspections and photos. Proof of any damages and the collection of funds are rarely challenged due to our impeccable documentation. Ask us to email you a copy of a recent move-out inspection. The thoroughness and the ease at which you can view it will surely impress you. This is what we send out upon each and every turnover.
16) What is their management termination procedure?
Most companies have termination fees and require you to pay management fees until the end of your management agreement. First Rate Property Management requires a 30-day written notice after the initial one year term. But we do not want to continue managing if our client is not 100% satisfied and we have put that in writing. Find another company that will do that.
17) What is their policy on returning phone calls from tenants and owners?
Call and leave a message and see how long it takes for the call to be returned. Most of our correspondence with both the tenant and owners are via email. This allows for written documentation and almost immediate response.
18) Request a copy of the property management agreement?
Read these and be sure you understand all fees and termination clauses. You are more than welcome to read our management agreement and please ask us any questions. Some of the clauses may seem one sided, but after explaining the reason and the case law; you’ll find that they protect both the owner and the landlord.
19) What kind of software do they use?
Generally speaking, property management software will help organize and develop systems for the property manager, which will improve performance. QuickBooks, by itself, is not a good solution. First Rate Property Management uses PROMAS and Rental Home Pros to streamline our process and make communicating to tenants and owners automatic.
20) Ask the property manager what the market vacancy rate is and what their company’s vacancy rate is?
Most companies have no idea what their vacancy is. At First Rate Property Management, we track vacancy as well as a lot of other data so that trend analysis can be done. We use data to identify issues and how to correct them. Please visit our blog to see how we pass on some of this information. You’ll find that the data shows that First Rate Property Management rents are higher than the average and our vacancy is always lower.
21) Ask the property manager how often they will inspect your property?
First Rate Property Management does a drive by inspection once a month at a minimum. We believe the tenant deserves peace and enjoyment of the home. However, if the drive by inspection suggests damages or unauthorized tenants or pets, they will receive a notice and we’re going in. Additionally, if the tenant fails to pay rent or respond to communications, we’re going in. We’ll conduct a thorough inspection at no additional charge upon the reasonable request of the owner. We also trained our maintenance contractors to keep an eye out and to report any concerns to First Rate Property Management immediately. Then lastly, we recommend an annual preventative maintenance survey at a minimal fee conducted by a contractor.
22) When do they disperse owner funds and owner statements?
If your current property manager is not dispersing funds and supplying a full accounting of all funds at a minimum of once per month, you need to take action immediately. Do you get copies of all bills? Some property managers create their own bill, because they mark the price up, and don’t supply the actual bill sent from the original service provider.
First Rate Property Management starts to post our owner statements on the website on the 10th of each month and the proceeds are electronically deposit directly into their account. Copies of all and actual bills are scanned and attached to the statement for the owner’s review. Ask to see a copy the property manager’s owner statement. Is it professional, easy to read, and address everything you want it to?
1) Begin searching for your property manager as soon as possible.
If you are buying a property, don’t wait until the property closes to select your property manager. If you are looking at changing property managers, do so before you have a vacancy. Give yourself plenty of time to pick the right company.
2) Don’t select a “yes man”. Look for honesty and quality of the responses to your question.
Every property manager knows that the owner wants high rents, low maintenance, and immediate attention. Select a property manager that can provide data that supports their rent recommendation.
3) Request a copy of their lease.
Does it address all of your concerns? Does it look professional? Does it protect you the Owner? Please take a look at our rental agreement. To date, this lease has not lost in court.
4) Request a list of vacant units.
Call and schedule appointments to see them. Was the person showing you the property professional? How did the unit show?
5) Request a copy of proof of insurances.
These copies should come from the carrier directly, not from the property manager.
6) Is the property manager a little too eager for your business?
When selecting a property manager, there needs to be a good fit. The property manager may be very good, but if you and them don’t share the same investment philosophies or communication preferences, it’s best to keep searching. For example, First Rate Property Management is completely paperless and does almost all of its communication via the internet. So property owners, who don’t regularly check their email or access the internet, probably would not be a good fit with First Rate Property Management.