Best Practices for Selecting a Property Management Company

Selecting a third-party property manager is as fraught as selecting tenants. The landlords who choose well start with the right questions — organized by category, asked deliberately, and used to evaluate not just the answers but how those answers are delivered.

Below is a working list, distilled from years of online conversations among landlords, that you can use to vet any prospective property management company.

Company Credentials

• Are you a member of the National Association of Residential Property Managers (NARPM)?
• How long have you been a property manager?
• Can you provide references?
• What is the size of your team? How many departments do you have?
• What types of properties are you most experienced managing — single family, multi-family, commercial?
• What areas do you cover? How many properties are currently under management?
• How long have you been a manager in this market?
• Can I see other properties you manage? (You may also wish to ask those tenants about their experience.)
• Will the tenant and landlord have a single point of contact?
• What insurance coverage do you carry?
• How will you improve the profit margin on my properties — rent growth, late-fee sharing, etc.?
• Why should I hire you?

Communication with Tenants

• How do tenants contact you?
• How fast do you respond to tenants?

Fees

• How much do you charge, and what services are included?
• Are there extra services for an additional charge?
• What do you charge for recruiting new tenants?
• Do you charge for monitoring and maintaining vacant units?
• Be specific about: late fees (and what percentage the owner receives), lease-renewal fees, maintenance fees, eviction fees, inspection fees, and bill-processing fees.

Marketing

• Where and how will you advertise my rental?
• How do you prove the property is being advertised?
• Do you recommend tenant incentives?
• If I want additional marketing for vacant units, how is that arranged?
• What information do you provide to justify your suggested rent?
• Do I get input on the rent amount or the ad?
• How often do you provide updates — views, inquiries, showings, applications?
• What happens if my property doesn't rent quickly?

Tenant Screening

• How do you screen prospects?
• What do you require applicants to submit?
• How do you evaluate employment and income stability?
• Do you use a standard “income equals 3x rent” rule, or something more rigorous?
• How do you verify rental history?
• How do you guard against fraudulent applicant information?

Communication with Landlord

• What processes do you have for consistent communication with both tenant and landlord?
• How do you store and organize documents for my property and lease?
• How often and where can I access monthly reports, rent ledgers, proof of payments, and invoices for repairs?
• What documents do you routinely provide?
• How are documents delivered — mail, email, fax, online portal?
• What is automatic versus on request?

Maintenance

• Do you have a vetted list of contractors, handymen, and cleaners ready to deploy?
• Do your contractors carry liability and workers' comp insurance?
• What is handled in-house versus outsourced?
• What are the tenant's responsibilities in the lease (cleaning, furnace filters, yard maintenance), and what happens when they don't follow through?
• When is my approval required before maintenance work begins?
• How will you document that maintenance was actually needed and performed?
• When do you discuss options with me — e.g., a $40 plastic faucet versus a $120 metal one that lasts longer?
• When are you required to get multiple bids?
• How do you document whether damage was caused by a tenant?
• Do you send pictures or videos from inspections?
• Do you record contractor bids and send supporting documentation with the bills?
• How are costs broken down on your invoices?

Vacancies

• How many vacancies do you have right now? Out of how many total units?
• What is the average time it takes to fill a vacancy?

Late Payments and Evictions

• Where can I see any past-due balance?
• Do you have a formal process for payment plans, or is it ad-hoc?
• If a tenant moves and leaves a balance, how is it handled?
• What is your late-rent policy?
• What percentage of tenants do you have to evict?
• How does the eviction process work, when is the first notice sent, and how do you keep me updated?

Hypotheticals Are Useful

Asking “what would you do if…” questions is a good way to vet professionalism and judgment. Examples:

• What would you do if a tenant claims an unsubstantiated maintenance issue and threatens to withhold rent?
• What would you do if you received a report of a pet at a property where pets are prohibited?

Big Company vs. Independent

There's no universal answer. Larger firms have systems and capacity but may treat your property as one of many. Independent managers can be more attentive but must demonstrate the systems and processes to deliver consistently. Test for both.

Communication Is the Real Differentiator

Communication is the most common friction point between property managers and the landlords and tenants they serve. The way a prospective manager answers your questions tells you what to expect in the relationship. Are responses prompt? Are they thorough? Do any answers raise red flags?

Finally, always check the public domain for negative feedback before signing.