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As a real estate investor, you should never hire a property manager without first holding an in-depth interview. You should ask whether the manager offers services you need, whether they have the right experience, and whether they’re worth your time overall.
29 Most Important Property Manager Interview Questions
Here’s the list of what every rental owner should ask:
- What Services Do They Offer?
- How Many Rental Properties Do They Currently Manage?
- How Many Employees Do They Oversee?
- What Insurance Do They Carry?
- Do They Require Renter’s Insurance?
- What Experience Do They Have?
- What is Their Eviction Experience?
- What Are Their References?
- Are They Licensed?
- Are They Members of Any Professional Organizations?
- What Do They Know About Federal Fair Housing Rules?
- How Do They Determine Rent?
- What is Their Termination Policy?
- What Are Their Management Fees?
- Do They Charge Vacancy Fees?
- Do They Charge New Tenant Fees?
- How Long Are Property Units Usually Vacant?
- How Long Are Units Usually Filled?
- How Many Properties Are Typically Vacant?
- What’s the Eviction Rate?
- What is Their Lease Renewal Rate?
- How Do They Collect Rent?
- What is Their Marketing Policy/Procedure?
- How Do They Handle Repairs?
- Who Pays for Repairs?
- Do They Have a Maintenance Reserve Requirement?
- How Will They Contact You or Vice Versa?
- How Often Do They Provide Updates?
- Does the Property Manager Oversee Competing Properties?
1. What Services Do They Offer?
Property managers typically offer services such as collecting rent, taking care of maintenance tasks, and handling evictions. Some of the most common services property managers perform include:
- Tenant interviewing and screening
- Rent collection
- Maintenance tasks (such as mowing the lawn, fixing broken appliances, etc.)
- Contracting experts to handle more advanced maintenance tasks
- Eviction proceedings
- Complaint resolution
However, some property managers or management companies only offer some of the above services. Others may specialize in a few services. Be clear about what you’re looking for before hiring one to ensure they include the services you need.
2. How Many Rental Properties Do They Currently Manage?
Some larger property management companies oversee many different properties, such as multiple apartment complexes. Others only consist of a single property manager who oversees one or two properties and are best for investors who also have small portfolios. The number of rental properties a management company oversees can affect its resources, time spent handling complaints, and more.
To that end, ask how many rental properties a manager oversees or manages before hiring them. If the number seems too high, it is likely a sign that you should look for a different manager. No one wants their properties to be the least important on a manager’s daily agenda.
3. How Many Employees Do They Oversee?
The more work you need to have done, the more employees you need working for your property manager. Larger property management companies cost more, but have more employees to go around – this allows them to tackle larger jobs or oversee more apartment buildings at once.
By asking how many employees a company oversees, you can learn more about:
- Whether a given property manager has enough manpower to oversee all of your properties
- How expensive the company or manager is likely to be
Generally, you don’t need a massive property management company if you only have one or two properties. But as your portfolio grows, you may wish to contract with a large property management company with dozens of employees to handle the increased workload.
4. What Insurance Do They Carry?
All good property managers should have insurance coverage. Quality insurance coverage tells you the management company has been in the business for a while, has adequate experience, and takes the industry seriously. It also protects the company (and you) from lawsuits.
Many states require property managers to have real estate licenses or other forms of insurance to protect them from lawsuits or damage to property. A legal and trustworthy property manager needs to have the following kinds of insurance:
- General liability insurance for property managers – This protects the property manager for claims against the business if someone is injured or if property is damaged and it’s their fault.
- Business personal property insurance for property managers – Also called BPP, this protects the assets of a property management company.
- Professional liability insurance for property managers – If your property management company makes an error and it costs you money, you won’t sue them – instead, you’ll get paid via the professional liability insurance.
- Workers’ compensation insurance for property managers – Note that a management company needs this if even one extra employee aside from the owner works for it. Otherwise, they could be operating illegally and be fined.
Ask potential managers what type of insurance they carry and whether that will impact your overall cost/bottom line. Only ever hire managers or management companies that have adequate insurance; otherwise, the costs for any mistakes they make could come out of your own funds.
5. Do They Require Renters Insurance?
Not all property managers require renters insurance, but many of the best do. Renters insurance protects tenants and your property against fire, theft, vandalism, and other perils. See whether a prospective management company requires future tenants to have renters insurance when they move in. If the answer is “yes”, and they have a high occupancy rate, it means they do a fantastic job at marketing and filling vacant properties even with this extra cost.
6. What Experience Do They Have?
In general, the more experience a property manager has, the better suited they are for your needs. It’s a good idea to ask property managers how much experience they have:
- Managing specific types of properties, like single-family homes or apartment complexes
- In the property management industry overall
- Handling specific situations, like evicting tenants or collecting rent
Long-term property management arrangements are best served by experienced personnel on both sides. Try not to hire new property managers without a lot of experience.
7. What is Their Eviction Experience?
It may be worthwhile to specifically ask about a manager’s eviction experience. Evicting problematic tenants can be stressful and difficult for everyone involved.
But a property manager that already knows how to serve eviction papers, where to take the papers, how to contact a local sheriff’s office, and how to handle other steps is an invaluable partner.
8. What Are Their References?
For even more peace of mind, ask an interviewing property manager if they have any professional references. Good professional references serve as further resources to determine a manager’s trustworthiness, work ethic, and other factors.
Professional references should come from other real estate investors or property owners, not other property managers or their friends.
If other property owners in the area use the same property management company, that’s a good sign they are a worthwhile hire for your own business as well.
Questions to Ask References
Getting references is one thing. Making sure those references are worth your time is another. If you get a reference from another property owner or investor, or if you call up a property manager’s references, ask them some questions about their property manager to vet them early, such as:
- How they found the property management company – Ideally, a reference should state that they found a property management company after doing their own in-depth investigation.
- Whether they’ve ever had problems with a property manager – If your reference seems cagey or dismissive of issues, particularly regarding difficult tenants, move on. A good property manager reference should clearly state whether they have had issues and, if so, what the context was for those problems.
- If the property manager is responsive – Again, your reference should be straightforward and upfront in their answers. If they don’t know, move on.
- If the property manager is prompt with collecting rent – If your reference doesn’t know for sure or if they give a generic answer like they “haven’t had any problems”, continue your own investigation.
Lastly, double check any specific stories or claims the property manager makes regarding fees, special services, and so on. If their current clients can’t reaffirm what they promise, it’s a good bet that the manager is trying to pull the proverbial wool over your eyes in the interview.
9. Are They Licensed?
During an interview with a property manager, ask whether they are licensed to legally operate as a management company – if that’s required in your state. For example, North Carolina requires property managers to have real estate licenses to legally operate in this industry.
If it’s needed, make sure to get the license numbers from your prospective hire. Then you can verify the license number and ensure that the property manager’s license claims are legitimate.
10. Are They Members of Any Professional Organizations?
Long-standing and experienced property management companies are oftentimes part of professional organizations. These include the National Association of Residential Property Managers and more.
More professional organization affiliation is always a good thing. It indicates professionalism, responsibility, and plenty of time in the industry to iron out the kinks of their operation and determine the best practices for their clients. On top of that, it means that other property managers haven’t had major issues with them in the past!
11. What Do They Know About Federal Fair Housing Rules?
The Federal Fair Housing Rules protect tenants from landlord discrimination and malfeasance. They’re incredibly important to ensure sound legal relations between investors and their tenants, so any worthwhile property manager needs to know them.
Therefore, ask aspiring property managers whether they know what the rules are and how to implement them properly. For example, landlords are not allowed to discriminate against a tenant or renter because of protected attributes like sex, skin color, disability status, and so on.
12. How Do They Determine Rent?
The best property managers can figure out the highest possible rent to fairly charge for your properties while remaining competitive relative to the local real estate market. To do this, they need to have experience:
- Comparing rental listings
- Valuing local amenities or valuable perks to a building
- Demonstrating a property’s value through online listings and advertisements
So, come up with ballpark rental amounts for their properties, then compare them against what a prospective property manager suggests. If the numbers are close, they may be a good property manager to choose.
13. What is Their Termination Policy?
You may need to eventually terminate your contract with a property management company. If and when this occurs, you need to know that it won’t take you too long to do so or that you won’t be subject to high fees.
When you ask this question, you should ensure that:
- A property manager has a straightforward termination policy if needed
- The termination policy is not riddled with extra fees or steps
While most property managers will answer honestly, it may be a good idea to have an attorney look over a management contract before signing on the dotted line. Specifically, you should make sure the termination policy:
- Doesn’t require cause – This allows you to cancel your contract with a property manager at any time and for any reason
- Doesn’t have an exorbitant notice requirement – Generally, most management companies require you to give them between 30 and 90 days’ notice before terminating a contract
- Doesn’t require exit fees – If a property manager does have such a policy, ask them to leave the interview and look for a different company!
14. What Are Their Management Fees?
Ask about the management fees and overall prices for a property manager’s services. The management fees affect how much of your monthly rental income comes out of your bank account. It also determines whether a given management company is worthwhile based on the percentage they take.
Get a clear number before signing with them. Most property managers charge either flat fees or charge percentages of the monthly rent collected from tenants.
15. Do They Charge Vacancy Fees?
Vacancy fees are exactly what they sound like: extra costs you’re saddled with if your properties remain vacant for a certain amount of time. You should never hire a property manager that charges you money when you aren’t making money to pay them, especially since the property manager is usually responsible for filling rental properties with paying tenants!
16. Do They Charge New Tenant Fees?
On the flipside, some property managers don’t charge vacancy fees, but they do charge fees to find new tenants since this costs time and money. It’s up to you and your budget as to whether this is a dealbreaker for your plans. Those property managers that do charge fees for finding new tenants may charge one month’s rent or some other rate.
17. How Long Are Property Units Usually Vacant?
You should know how competent a future property manager is before hiring them. A good property manager should have vacant units for between 2 to 4 weeks on average – if it’s shorter, however, this could be a red flag since the property manager might ask for too-low rental amounts. The reverse is also true; if a property manager takes too long to fill vacant units, it may mean they aren’t good at marketing vacant properties or have other problems.
18. How Long Are Units Usually Filled?
It can’t hurt to ask the reverse question. If a property manager boasts a long average unit occupancy rate, such as more than two years, it’s a great sign that your property will bring in regular income.
19. How Many Properties Are Typically Vacant?
Naturally, a lower answer to this question is always better. Ideally, you want a property management company with an average vacancy rate of 5% or less. This ensures you’ll get the lion’s share of your rental payments every month and indicates the property manager knows exactly what they’re doing.
20. What’s the Eviction Rate?
While on the topic of average rates and similar subjects in your interview, ask a property manager what their usual eviction rate is. If the eviction rate is abnormally high (such as over 10%), it likely means the property manager doesn’t choose tenants very wisely, which will cost you both in terms of time and lost money if you hire them.
21. What is Their Lease Renewal Rate?
A good lease renewal rate is above 80%. This essentially shows you a property management company keeps tenants happy and does a good job managing rent prices relative to the wider market.
22. How Do They Collect Rent?
Property managers may collect rent in person, via check, or through online direct deposits. You need to know how a property manager collects your rent so you can assist/intervene if necessary.
If a property manager collects rent in person, note that the money may not show up in your business bank account for one to two business days. You’ll also need to work out an agreement with your property manager so you know both when they will deposit the money and you know how much money should have been collected/what ends up in your account.
If a property manager collects rent through checks, money may take even longer to get into your bank account. You’ll also need to trust the property manager explicitly.
If a property manager collects rent through online direct deposits, the money will reach you, the property owner, more quickly. Property management companies that offer this service are oftentimes ideal since it minimizes the time your rent is “out there” and not in someone’s account.
Similarly, you should ask when a property manager collects rent. Timely rent collection is one of your rights as a landlord, so you need to know when you can expect to receive your rental payments.
23. What is Their Marketing Policy/Procedure?
Good property managers know how to market properties they oversee effectively and persuasively. Therefore, you should ask:
- What types of marketing materials a manager uses
- How the manager markets properties
- Whether the manager knows what people to target for the property in question
24. How Do They Handle Repairs?
From time to time, property managers will be called upon to repair broken appliances or perform other repairs for property tenants. A good property manager should be able to handle those maintenance tasks capably.
Ask whether the property manager repairs such things themselves or if they hire outside contractors. If it’s the latter, ask further about their hiring policy and what contractors they rely on to do this important work.
25. Who Pays for Repairs?
Some property managers cover basic repairs while others charge all repair costs to their clients. Generally, you want a property manager that pays for repairs upfront from an escrow reserve account (more on that below) or that doesn’t charge for basic repairs, such as repair costs below $1,000.
Repairing tenant appliances and other things is a part of the job, and it should theoretically be covered by what you pay the property management company. Don’t hire a property manager that requires you to foot the bill for every minor repair job that crosses their desk.
26. Do They Have a Maintenance Reserve Requirement?
Many property managers require you to keep a reserve of cash called the maintenance reserve or escrow reserve. This is a pool of money they can dip into to cover expensive repairs, such as those well over $1,000.
If the company has a maintenance reserve requirement, look at your budget and determine whether it’s financially feasible. This can be an important aspect of your partnership if your property manager oversees many real estate properties. However, if they have a maintenance reserve requirement, double-check how much that requirement is. It should be enough to cover major repairs but not enough that the management company can take advantage of those excess funds for any reason.
27. How Will They Contact You or Vice Versa?
As a landlord, you should be able to reach your property manager quickly and easily. Make sure that a potential property manager has multiple communication channels, such as email and a phone number.
28. How Often Do They Provide Updates?
You might feel more comfortable with managers that provide constant updates or that are easy to reach via phone or email. Understanding how often your manager provides updates can give you peace of mind and provide some insight into whether the business relationship will be a profitable one.
For example, if a property manager rarely contacts their clients, they may not be a good fit if you want a daily update on all of the properties in your portfolio.
29. Does the Property Manager Oversee Competing Properties?
If you’re considering hiring a property manager that oversees many real estate investments in the same area, they could work for one of your direct competitors. Ask them up front whether this is the case – if they do, then ask how they will manage your property to avoid treating one investment better over another. Their responses may dictate whether you can trust them to do the best job for your investments or if you should find another unbiased management company.
