Questions for Hiring a Property Manager

May 21, 2012

Hiring a San Diego commercial property management service works the same way as hiring an employee, except in this case it’s a contractor.

In this regard, you will need to probe and ask questions on topics ranging from how costs are arrived at to how the manager provides satisfactory work for landlords. 

Commissions/Costs – While you do want to find a property manager within your budget range and not overpay for it, price should not be the only deciding factor. There are plenty of low-bidders out there who can make empty promises. Most property management services average 5 to 10 percent of collected rent as their commission.

Vacancy and Leasing Fee – Consider this charge a finder’s fee for tenant ads and marketing. However, it varies so you should ask before hiring what you will be charged. Typical costs equal a half of the first month rent as a commission.  

Contact Resources – When someone acts in your proxy for your business, you want to be able to reach them 24/7. A property manager who only gives you a voice-mail to call should be avoided. You want a hotline access to a representative with full contact disclosure. 

Financial Management – Good commercial property management in San Diego will provide information on how they handle checks, deposits, rent, and related accounting, with regular reporting that is reconciled for management and tax purposes. A good manager also commits to a set schedule of collection, reporting and payment to your accounts.

Maintenance and Repairs – Who’s responsible? It seems like a simple question, but a landlord should have a clear understanding with a property manager before initiating a service agreement. Leave this undefined, and your tenants will make it clear the ball is being dropped when they have things break in the rental.  

Cash Reserve – some property managers want a cash reserve deposit in case there is an unexpected cost that needs to be handled quickly. Ask for this figure ahead of time before signing the dotted line.

Termination – a property service agreement is a contract. As such, it can be ended when no longer needed or based on poor performance. Since property managers will try to lock in a payment period before cut-off, understand what that is before signing the agreement.  

Landscaping – Some property managers include landscaping expenses in their base package while others charge extra. Whichever the case, yard and lawn service will need to be regularly treated. So be clear who will take care of the work and how it will be paid.

Property Monitoring – who will make sure the tenant is treating the property correctly and how will monitoring occur? If a service is just going to take your money and not protect the rental, what’s the point in using them? Be clear how monitoring will occur and how tenants will be notified. 

Technical Expertise – if a management service for commercial property in San Diego has never dealt with an eviction in court, don’t use them. You want a service that knows the process, the pitfalls, and can keep your rentals out of trouble. You’re not paying for someone to learn the hard way. 

Source: Property Management Direct

DISCLAIMER: This blog has been curated from an alternate source and is designed for informational purposes to highlight the commercial real estate market. It solely represents the opinion of the specific blogger and does not necessarily represent the opinion of Pacific Coast Commercial.