18 Questions to Ask a Property Manager and Increase ROI

Analysts forecast the property management industry to grow at a compound annual rate of 9.7% from 2024 to 2032. Why such a boom? Sure, population growth is a factor, but more and more investors are looking for hands-off, passive ways to own rental properties. And who can blame them? The idea of kicking back and watching rent checks roll in sounds pretty amazing.

If you're thinking about joining this camp and hiring a property manager, you're in the right place. This article gives you a list of questions to ask before you sign any contracts. Like anything in business, the right partner can make or break your investment. Since you'll commit to an agreement with the property management company you choose, you don't want to end up counting down the days or paying hefty break fees to get rid of them.

So, let's get into the details of what you need to ask. These questions will help you spot the difference between great managers and those who might fall short. After reading this article, you'll have the information on how to make a smart choice and set yourself up for success as a property owner.

Understanding the role of a property manager

Property management companies handle the day-to-day operations of your rental investment. They turn your real estate into a more passive investment by taking care of key responsibilities such as:

• Finding and screening tenants: Advertising vacancies, handling property showings, and applying screening criteria to choose reliable and financially stable tenants.
• Lease agreements: Managing all lease agreements and making sure these contracts are clear and legally sound.
• Collecting rent: Collecting monthly rent from tenants and addressing any late or missed payment issues.
• Managing maintenance: Keeping your property in top condition through routine upkeep and emergency repairs. This includes regular inspections, coordinating with contractors, and quickly responding to tenants' maintenance requests.
• Evicting tenants: When necessary, a property management company handles the entire eviction process. This involves following legal procedures, filing paperwork, and potentially representing the property owner in court.
• Financial management: Most property managers also take care of budgeting for maintenance and providing financial reports to property owners.

Questions to ask a property manager

When you decide to hire a property management company, you're handing over control of your investment. How well they handle their tasks can affect your bottom line, so to help you find a good match, here are pivotal questions to ask:

1. What services do you provide?

There are basic tasks that property management companies provide as described above. However, it's always a good idea to confirm how much say you have in the management with the company. This isn't just about control — it's about protecting your bottom line.

Some property managers are fine with you using your own vendors or taking care of certain tasks, which might save you some cash. Others prefer to handle everything themselves, which could cost more but might be easier for you. Knowing which approach will be taken helps you figure out if their way of doing things fits your budget and management expectations.

Ask them:

• Can I use my own people for maintenance?
• For other jobs like locksmiths or painters, can I pick who does the work?
• Can I handle the accounting myself?
• Does doing some of these things on my own change what you charge?

2. What licenses do you have?

Laws around licenses for property management firms vary by state, so you'll want to understand the regulations for your area. Even if licensing isn't required, it's still a good idea to vet potential property managers to see if they've taken steps to enhance their qualifications. Current state rules are as follows:

• No license required: Idaho, Kansas (residential), Maine, Maryland, Massachusetts, Vermont
• Licensed property manager: Five states only require a property management license: Montana, Oregon (or real estate broker license), South Carolina, South Dakota and the District of Columbia.
• Real estate license required: All other states require property management companies to have licensed real estate agents.

3. What qualifications do you have in property management?

Asking about qualifications helps you understand how prepared the property manager is for the job. A license shows they meet basic state requirements, but certifications indicate additional training. Common certifications include:

• Certified Property Manager (CPM)
• Residential Management Professional (RMP)
• Certified Apartment Manager (CAM)

To get these certifications, the property manager has to have in-depth knowledge of rental laws, experience with tenant and rental property issues, and a commitment to ongoing education.

4. What's your current portfolio of managed properties?

Asking about how many properties they currently manage helps you get a feel for their experience and how busy they are. You'll also uncover if they handle places similar to yours or if they manage different types of rentals. It's good to know if they're juggling too many properties or if they have room to give yours the attention it needs.

This question also clues you in on whether they're a small operation or a bigger company. Basically, you're trying to figure out if they're a good match for what you need.

5. How long have you been managing properties?

You're hiring a property manager to make your life easier and help your investment succeed. Their expertise, systems, and knowledge are key to achieving this. While the company doesn't need decades of business under their belt, you do want staff members with solid experience and background.

Ask about:

• The company's history.
• Individual team members' experiences.
• Their track record with properties like yours.

6. How do you structure your fees and charges?

Ask this to avoid any surprises down the road. Some managers charge a flat rate, while others take a percentage of the rent. They might also tack on fees for finding new tenants or dealing with maintenance.

Getting the full picture of costs helps you decide if their services fit your budget. It's also a chance to see how upfront they are about their pricing. A manager who's clear about their fees is usually easier to work with in the long run.

Typical fees might include:

• Management fee.
• Leasing or tenant placement fee.
• Vacancy fee.
• Maintenance markup.
• Lease renewal fee.
• Eviction fee.
• Early termination fee.

7. What are the details of your property management contract?

Understand what you're getting into before you sign on the dotted line. This question helps you understand the duration of your commitment, the process for termination if necessary, and any other key details.

Contract logistics to ask about include:

• How long the contract runs.
• What it costs to end it early.
• How much notice you need to give to make changes.
• Any other rules that might make it hard to switch managers.

8. What's your method for communicating and reporting to property owners?

What should you expect for updates on your property? How often will they keep you in the loop, and what kind of information do they share? Do they send monthly statements? Can you check things online whenever you want? Basically, you're making sure you're not in the dark about what's happening with your property.

9. How do you find prospective tenants?

This question gives you insight into their marketing and advertising process for filling vacancies. While most managers list properties on online platforms, you want to know what else they do to attract good tenants.

Ask about their methods, such as:

• Social media advertising.
• Local print ads.
• Signage on the property.
• Referral programs.
• Partnerships with local businesses or universities.
• Open house events.

10. How do you set rental rates?

Find out how the property management company decides on rental prices. What research do they do on your local rental market? How do they keep tabs on changes over time? Ask about their strategy for checking market rents when it's time for lease renewals.

A good manager should have a solid grip on local rental trends and be able to explain how they use that info to set a competitive rental price for your property.

11. Can you tell me about your screening process?

Learning about their screening process helps you understand their procedures for choosing the best tenants. Do they just collect applications and pick whoever looks okay, or do they dig deeper? It's also important to make sure they're following fair housing laws throughout the process.

A solid tenant screening process includes:

• Running credit checks.
• Verifying income and employment.
• Calling previous landlords.
• Doing background checks.

12. What is your rental criteria?

Knowing their rental criteria helps you understand what they look for and how they approve tenants. This goes hand in hand with their screening process.

Property management companies should have a documented list of pre-defined requirements for new tenant placement. Typical criteria often include factors like minimum income requirements and a certain credit score.

13. What's in your standard lease agreement?

A property manager's lease agreement sets the rules for renting your property. Checking what's in it allows you to see whether they cover all the bases.

A typical lease should include:

• Rent amount and due dates.
• Security deposit details.
• Length of the lease.
• Rules about pets, smoking, or subletting.
• Maintenance responsibilities.
• Conditions for ending the lease prematurely.
• Requirements for renter's insurance.

14. How do you collect rent?

Asking about rent collection gives you an idea of how frictionless your income generation will be. Property managers use various methods to collect rent: some still rely on mailed checks, while others use online portals for electronic payments. Some might even set up direct deposits.

You want to know:

• When can I expect to receive all the rental income?
• How do you handle late payments?
• Do you charge late fees?
• What's your process for dealing with bounced checks?

15. Do you handle maintenance in-house or hire third party companies?

Some property managers have their own maintenance team, while others hire outside contractors. If they handle things in-house, that might equate to faster response times and more control over quality. If they use third-party companies, they might have access to a wider range of specialists.

You want to know:

• How quickly can they respond to issues?
• Do they have a 24/7 emergency line?
• How do they decide what needs fixing?
• Do they get multiple quotes for big jobs?

16. What is your lease renewal rate?

Asking about the lease renewal rate lets you know how successfully the property manager keeps tenants happy. A high renewal rate usually means tenants are satisfied and want to stick around. This is great for you because it means less turnover, which saves you money on finding new tenants and prepping the property between renters.

Some things to consider:

• What's their average renewal rate, and how does it compare to the local market average?
• What do you do to encourage renewals?
• How do you handle rent increases during renewals?

17. How do you stay updated on changes in regulations?

You want to know if they're proactive about staying up-to-date on new laws that could affect your property. To find out, ask them the following:

• Do you attend industry workshops or seminars?
• Do you belong to professional associations?
• Do you have a lawyer you consult regularly?

18. Can you provide customer references?

Asking for references is a great way to get more information on how a property manager operates. It's one thing to hear their sales pitch, but it's another to talk to folks who've actually worked with them.

When you get these references, ask them:

• How responsive was your property manager to issues?
• How well did they handle maintenance?
• Did you have any problems with the property manager? If so, how did they resolve them?

Questions to ask a short-term rental property management company

If you're in the short-term rental business, hiring a property manager comes with its own set of questions. While you'll still want to cover basics like fees, services, and contracts, there are some specific areas you'll need to explore in more depth.

Here are the key questions to ask in this investing niche:

How will you market my short-term rental?

Marketing can make or break a short-term rental's success. Successful marketing requires much more than just listing your place online. It's about making it stand out in a crowded market. You'll want to know if the property manager has a solid game plan to get your rental noticed and booked.

Ask about:

• Professional photography services.
• How they write and optimize listings.
• Strategies for getting positive reviews.
• Use of social media or a dedicated website.
• Any special promotions or seasonal marketing tactics.

What is your average occupancy and daily rate?

This question helps you see how successful the property manager is at keeping short-term rentals booked. A high occupancy rate usually means they're doing a good job with marketing and pricing. However, it's important to note that a super high occupancy rate isn't always best if it means they're underpricing your property and the average daily rates are lower.

You're looking for a balance between a booked vacation rental and the best nightly rate. A good property manager should be able to explain how they determine the middle-ground.

Things to consider:

• What's your average occupancy rate?
• How does this rate compare to local market averages?
• Does the occupancy rate vary by season?
• What strategies do you use to boost occupancy during slow periods?
• Do you use dynamic pricing tools to adjust rates on demand?

How do you handle maintenance and cleaning?

Short-term rentals require a different approach to cleaning and maintenance than long-term properties. Guests expect hotel-like cleanliness and for everything to be in top shape. You want to know how the property manager keeps your place spotless and well-maintained between bookings.

Make sure that you ask:

• What's your cleaning process?
• How quickly do you turn the property around between guests?
• Who handles the cleaning, is it in-house staff or contractors?
• How do you handle emergency repairs during a guest's stay?

Property management tools

Handing over your rental property to someone else can be tempting, but it also means less control over the business, which can impact your profits. If you've decided that you'd rather stay hands-on with your investment, self-managing might be the way to go.

Sure, there's extra effort involved in this approach, but using property management software like Azibo can make many key tasks easier. Here's what Azibo offers:

• Rental applications: Easily direct potential tenants to an online application that gathers all the information you need to start the selection process.
• Tenant screening: Applicants pay for their application screening, which includes credit and background checks as well as rental history.
• Rent collection: You can use Azibo's online system for easy rent collection, with options for automatic payments, late fees, and reminders.
• Accounting: Track your rental property's profit and loss with built-in accounting tools at no extra cost.
• Financial management: Get a clear picture of your overall performance with financial reports and analysis.
• Maintenance and messaging: Make it easy for tenants to submit maintenance requests and for you to track status.

What questions to ask a property manager

Choosing a property manager isn't a decision to take lightly. After all, you're handing the keys to your investment over to somebody else. By asking these questions, you'll get a good feel for how each company operates and whether they're a good fit for your needs.

The right property manager can make your life easier and potentially boost your profits. The wrong one? Let's just say it could lead to challenges you didn't sign up for.

So take your time, do due diligence, and don't be afraid to ask tough questions. Your future self and your bank account will thank you for it.

Questions to ask a property manager FAQs

What should I say in a property management interview?

Highlight your experience, skills, and understanding of property management. Discuss your approach to tenant relations and conflict resolution. Emphasize your organizational skills, knowledge of local laws, and ability to handle financial responsibilities.

What is a property manager's greatest responsibility?

Making sure the property is well-maintained and meets all legal and financial obligations and that tenants are satisfied with their experience.