What an owner should ask a propety mgmt company

• An owner should also ask the property management company about the employees of the company.  Did the company do a background check of the leasing agents?  The leasing agent will have important information at their fingertips (social security numbers, banking information, access to the premises, etc).  What type of experience does the agent have, not only in this field but also work related history?  What type of education does the leasing agent have, any certifications for the job other then a real estate license?
• What is the procedure for collecting rent? Late notices, late fees, who receives the late fees? If this escalates what are the procedures for mediations, or evictions, what are the costs involved, do I have to appear in court or be represented by the mgmt company or their lawyer.   In this economy even the best tenants can have an issue with missed rent. 

What owners should ask a property mgmt company?

Still searching for the correct property management company? As any investor/owner know it is not easy to find a property management (PM) company that will care for your property as needed.  I have seen and heard horror stories from friends and clients about what service they actually pay for and receive.  This industry is very customer service oriented, but there is hardly any requirements in Hawaii for a company to start a PM division, except to have an active real estate license and the company must have a principle broker. Most PM's are busy taking their required courses to keep an active license and also worry more about handling a buyer or seller then your property.  I only work PM; I refer any sales transactions to my Principle Broker, including my own properties.

Some questions an owner can ask are:

·        "How many properties do you manage and how many PM's do you have?", if the response is 500 properties and 4 PMs that is to many.  The industry average is about 100 properties to 1 PM, but I think that is also too many.  That is 100 owners and 100 possible tenants. 

·        “How is your accounting department setup?” How many employees, a CPA or data entry personnel, is it sub-contracted or in house, how automated is it? Think about this, 500 properties is 500 rent checks coming in the first of every month. 

·        “What is the procedure for screening new tenants?”  There are a variety of companies that will do this from credit scores to full background checks, it is a matter of how much you want to pay, most costs are incurred by the possible tenant ($10-$25 is usual cost).

   I am going to stop here, I hope I have given some useful information, and please feel free to give any comments or suggestions that will help educate all the readers.

Mahalo