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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 questions to discover whether the manager offers the services you need and has the right experience.
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 Do They Handle Communication?
- 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 is 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.
If the number they manage 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?
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 property damage. 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 from 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 (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 professional liability insurance.
- Workers’ compensation insurance for property managers – Any property management company needs this type of insurance if they have one employee aside from the owner. Otherwise, they could be operating illegally and be fined.
Only hire managers or management companies that have adequate insurance; otherwise, the costs for any mistakes they make could come out of your 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. If they do require it, 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. Ask about their experience with:
- Managing specific types of properties, like single-family homes or apartment complexes
- 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.
A property manager who already knows how to handle the eviction process is an invaluable partner.
8. What Are Their 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 and are willing to speak on their behalf, that’s a good sign they are a worthwhile hire.
Questions to Ask References
Ask quality questions to help ensure the property manager is a good fit, such as:
- How they found the property management company
- Whether they’ve ever had problems with a property manager
- If the property manager is responsive
- If the property manager is prompt with collecting rent
The answers to these questions should point to a legit reference who verifies that the property manager is a good communicator, responsible, and works to find a solution to any issue.
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 to choose someone else.
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 including the National Association of Residential Property Managers and more.
Professional organization affiliation is always a good thing. It indicates their interest in this position as a career rather than just another job. It also points to a significant amount of time in the industry to iron out the kinks of the operation and determine the best practices for their clients.
11. What Do They Know About Federal Fair Housing Rules?
The Federal Fair Housing protects tenants from discrimination and malfeasance.
Without a general knowledge of the rules and how to avoid a lawsuit, you can open yourself up to some major legal problems.
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
Come up with ballpark rental amounts for your properties and 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.
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?
Property management fees affect how much of your monthly rental income comes out of your bank account. Obviously, this can significantly affect your bottom line.
Get a clear number before signing . 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 who 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.
If you live in an area where squatting is common, it is likely worth it to pay a small vacancy fee if the property manager provides extra services during the vacancy period to avoid property damage or squatters.
16. Do They Charge New Tenant Fees?
Some property managers 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.
Typical fees for finding new tenants range from one month’s rent to a flat fee.
17. How Long Are Property Units Usually Vacant?
A good property manager should fill vacant units for between 2 to 4 weeks on average.
A shorter time isn’t always a good thing as the property manager might ask for too-low rental amounts or have lax tenant screening policies. On the other hand, if a property manager takes too long to fill vacant units, they may have inefficient marketing strategies.
18. How Long Are Units Usually Filled?
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 helps ensure you’ll get consistent rental payments every month and indicates the property manager knows what they’re doing.
20. What’s the Eviction Rate?
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 cash
- Through online direct deposits
Ask for their typical procedures for when they collect the rent, record who has paid, when it is deposited, and when their landlords typically receive the funds. It’s also important to ask how they handle non-payment.
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 are used
- How the manager advertises properties
- If the manager has experience marketing similar properties to yours
24. How Do They Handle Repairs?
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.
You should also inquire about a general timeline for repairs. If tenants are waiting several days or a vacant property cannot be filled until repairs are made, that can cost you.
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 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 who 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. 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 Do They Handle Communication?
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 and offers a typical timeline for a response.
28. How Often Do They Provide Updates?
You might feel more comfortable with managers who provide constant updates or those who only communicate if there is an issue. Understanding how often your manager provides updates can help you determine if their communication style is a good fit.
29. Does the Property Manager Oversee Competing Properties?
Most successful property management companies will oversee similar properties. Ask them how they handle competing properties and allow their responses to dictate whether you can trust them to do the best job for your investments.
