A property manager can be fundamental for maintaining and maximizing the value and profit of a rental property while minimizing the stress and effort required from property owners. However, many property management company options are available, and not every company fits every type of property or the landlord’s needs. If you’re an owner in the market for a property manager to handle your property’s day-to-day operations, these are the questions we recommend you ask before hiring a property manager to ensure you find a good match for your property.
Questions to Ask to Find a Good Property Manager Company
1 – Are You Licensed, Bonded and Insured?
In Alberta, any person wanting to manage a property on behalf of the owner needs to get a license from the Real Estate Council of Alberta (RECA) after completing the pre-licensing courses offered by the RECA’s recognized course providers and passing the respective exams. The courses and licenses vary depending on the type of property to be managed. So, for example, if you own a residential condo unit and a commercial property, the property management company you choose must be licensed to operate residential condominiums and commercial facilities.
While not mandatory, if a property manager company holds certifications from other institutions like the Real Estate Institute of Canada (REIC) and the Institute of Real Estate Management (IREM), it’s a nice plus as it can give you a better idea of a company’s expertise in real estate management.
As for insurance, property management companies typically require several types of insurance coverage to protect themselves, property owners, and the tenants. The specific insurance needs may vary based on factors such as the company’s size, the types of properties managed, and local regulations. Here are some common types of insurance that property management companies often have in Alberta:
- General Liability Insurance: This insurance covers bodily injury, property damage, and personal injury claims that may occur on the property. It protects the property management company from lawsuits filed by tenants, visitors, or contractors who suffer injuries or property damage due to negligence.
- Professional Liability Insurance (Errors & Omissions Insurance): This coverage protects property managers from claims of professional errors, negligence, or omissions. It covers legal fees, settlements, or judgments resulting from claims of mismanagement, failure to perform duties, or other professional mistakes.
- Workers’ Compensation Insurance: This policy covers medical bills, lost wages, and rehabilitation expenses for employees who are injured or become ill on the job.
- Tenant Discrimination Insurance: This insurance provides coverage for claims of discrimination based on disability, race or gender. It protects property managers from lawsuits alleging discriminatory practices in tenant selection, lease terms, or property maintenance.
2 – What Type Of Properties Do You Manage?
It’s not a coincidence that the Province asks for different licensing and certifications depending on the property managed: every property has unique management requirements. Managing single-family homes requires different skills than managing multi-unit apartment buildings or commercial properties, and by knowing which types of properties the companies specialize in, you can assess whether their staff has the expertise and resources necessary to promote and manage your specific property type effectively.
3 – How Many Properties Do You Currently Manage?
If you are going to put in money to have someone take care of your investment, you need to know if the property management company can invest enough time and effort to make sure your property and tenants are getting the attention they deserve. Knowing how many properties a manager handles gives you insights into the manager’s workload and capacity. A manager overseeing too many properties could lead to oversight, delays responding to tenant needs, or neglect maintenance issues.
4 – What Are Your Management Fees?
This may seem small, but having a clear idea of the company’s fee structure is essential for landlords to make an informed decision. Here’s a break down on the impact of understanding management fees has on your property management company choice:
- Inquiring about management fees allows landlords to understand the fee structure, including whether it’s a flat fee, a percentage of rent collected, or a combination of both. This helps landlords assess how fees vary based on rental income and adjust their financial planning accordingly.
- Understanding the fees allows landlords to assess what services are included and whether they align with their needs and expectations.
- Management fees directly affect the profitability of your investment. Knowing the fees will help you as a landlord evaluate whether hiring a property management company over another is financially viable and whether the expected returns justify the costs.
- You can evaluate the value offered by each company relative to their fees and choose which best fits your needs and budget.
- Knowing the standard management fees in the market gives you leverage in negotiations with property management companies. You can negotiate fees based on the services provided, the number of properties you have, or other factors to ensure a fair deal.
5 – How Do You Handle Tenant Inquiries and Complaints?
A property manager who delays communicating with tenants can cause you more than a headache, from conflict with tenants and high vacancy rates to significant property damage. Understanding the property manager’s approach to tenant and complaint management will help ensure that tenants receive prompt and satisfactory responses and that your property receives the needed maintenance and repairs on time.
Your Property In Good Hands
The property management company you choose will be in charge of protecting your property and your interests and will become a fundamental part of your success as a landlord; that’s why we recommend that you take to pre-screen different companies asking these and other questions you may have to find the one that most suits your goals with your investment property. If you’re looking for a property manager in the Calgary area, we’d love to hear from you.
