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The Basics of Property Management We know that owning a home comes with a laundry list of responsibilities, but if you’ve purchased it as an investment property, you’ll have a new layer of responsibilities. While some homeowners often choose to manage their rental properties, it can be much easier to hire a property manager to handle rental duties. Role of Property Manager • Collect rent each month • Communicate with tenant • Find and screen tenants • Manage maintenance and repairs • Handle any notices to the tenant, including eviction. • Provide financial reports • Set and adjust rent yearly

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How Much Does It Cost? In addition to the responsibilities covered by most property managers, your management levels are typically dictated by a contract. Additional services, like preparing a lease or inspecting the property, may cost extra. However, property management is often surprisingly affordable for many homeowners. Typically, property management costs about 6-8% of gross rent, and may increase to 10% in some cases. Upfront Costs Many companies may also charge up to 100% of the first month’s rent. Much of this initial fee covers the cost of screening tenants and for any advertising of an empty home that may have been required.

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What To Look For In addition to the responsibilities covered by most property managers, your management levels are typically dictated by a contract. Additional services, like preparing a lease or inspecting the property, may cost extra. However, property management is often surprisingly affordable for many homeowners. Since most of a management agreement is contractual, it’s important to check for potential trouble spots before you sign with a management company. • Does the manager get paid when the house is vacant? Rushing to fill a vacancy

can result in bad tenants. • Will the manager help you advertise your vacant listing? • How are repairs handled? • Does the manager provide liability insurance for the tenants they find?

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Get Referrals Your real estate agent will be one of the best sources of potential property managers, so they should be one of your first calls once you’ve decided to hire a manager. Other property owners will also be able to provide referrals. Once you’ve identified a potential management partner, ask for references and make sure to follow up with them. Do Your Own Homework Similar to real estate agents, property managers are licensed and regulated. In addition to your state’s Real Estate Commission, there are plenty of trade organizations for property managers. Don’t hesitate to check credentials.

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Interview Potential Managers Just like your real estate agent was an ally when choosing your home, your property manager should be an trustworthy partner. Once you have a handful of referrals, take the time to interview several candidates. A good property manager will have a plan to find and screen potential tenants, how to advertise an empty rental property and more. Ask your potential manager plenty of questions, including their record of placing tenants in properties.

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Interview Potential Managers Here are some of the most important topics to cover with a prospective manager. • How long have you been managing property, and how many properties do you

currently manage? • How do you find and select good tenants? • How will you show the property to tenants? • What additional fees and management costs will I pay, including marketing? • How do you manage vacant properties? • How and when are expenses passed along to me? • How are repairs managed to remain competitively priced? • Will you inspect the property regularly? • How do you report monthly finances? A good manager will be happy to answer your questions and share their vision for managing your rental. So don’t take the first manager recommended – always do your homework!

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Choosing a Property Manager for an Investment Property

Learn more about financing investment properties at

www.NewAmericanFunding.com

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