A good property management company can easily become one of your greatest assets.

But deciding on a company to protect your investment can feel like rocket science. Gain the knowledge you need to confidently evaluate and hire a property management company.

Setting and Collecting Rent

Rental income is the lifeblood of a landlord’s business. If the mechanisms aren’t put in place to bring in the right amount at the right time each month, the business will eventually wither and die. When properly performed, this is what allows top real estate investors to achieve a higher- than-average return on investment. Here’s a list of issues to review and questions to ask any property management firms that you interview:

Setting the Rental Rate

How do you determine your rental rates?

There’s a science behind maximizing rents. For a property manager to achieve this requires them to have knowledge of the local market and perform solid research on the last 10-20+ most recently rented comparables. Rules of thumb like the 1% rule (charging 1% of the property’s value as the monthly rent) are handy for reference, but cannot replace thorough research using current market data. Aside from affecting rental income, your rental rate can also impact the property’s value. The goal should be to get the unit rented within a month.

How often do you raise rents?

Rental rate surveys should be performed at least annually, and more frequently if there are vacancies or lease renewals.

Do you put contractual escalators in the lease?

Contractual rent escalators allow the rents to be raised without the need to negotiate, offer an explanation or give notice. Tenants know that they’ve already agreed to it, so it doesn’t feel arbitrary. And tenants are actually grateful if the firm decides to not enforce the full rate hike.

Collecting Rent

How is rent collected?

It’s a plus if the management company offers direct debit for tenants. Processing fewer checks improves cash flow and saves time and money. This lets you know as soon as possible if funds aren’t there and eliminates excuses about checks “lost in the mail.”

How do you deal with bounced checks?

This is usually a warning sign of trouble ahead. After the first bounced check, tenants should be prohibited from writing personal checks until at least 6 months of good payment history has been established. Additionally, the rental agreement should have a provision stating that tenants agree to pay the maximum the law allows for all returned checks.

How do you deal with delinquent payments?

Find a property management company with a process that’s firm but reasonable. Tenants will start paying later and later if the management company lets them, so it’s imperative that they enforce ALL aspects of the lease. Once they identify a tenant with a trend of delinquencies, they should keep a close eye, making sure they either get back on track or deal with the consequences. Remember that a strict collections process is only balanced out by the property manager quickly responding to tenants’ needs with quality service.

What is you current rate of delinquency?

Find out if they run a tight ship or allow things to get out of hand.

When is rent due? Is there a grace period, and if so, how long?

The standard is that rent should be due on the first day of the month (in hand, not postmarked), and late on the second day of the month. A grace period that extends to either the 3rd or the 5th is also standard. Keeping it shorter prevents it from getting significantly delayed in the event of a holiday or long weekend.

How much is the late fee?

While late fees can generate revenue, their primary function is to get tenants back on track to timely payments as quickly as possible. This property management fee is typically 5-10% of rent. Sometimes a small daily fee is added as an incentive to catch up ASAP. In theory, late fees are supposed to reflect the penalty the owner would experience in the event of a late mortgage payment.

How do you handle evictions?

Their process should be well documented, and although the best course of action will vary based on the circumstances, they should be able to explain to you the basic checklist they go through each time. You want to deal with a company that acts quickly, documents their actions and understands your area’s unique laws for this process.

In the last year, roughly how many evictions did you experience, out of how many properties being managed?

The higher the number, the less confidence you should have in their screening process.

How quickly do you usually get repossession of the property when an eviction takes place?

Time is money, and a smart tenant with bad intentions can drag this process out for a very long time. Find a manager who excels at containing and eliminating the problem as quickly as possible.

Do you provide eviction insurance?

This is basically a small monthly fee that insures that the management company will pay for all attorney and court costs associated with evicting a tenant they placed. It’s not a widely offered service, but it’s a valuable one that speaks to the property management company’s confidence in its screening process.

Next up: Your cash flow may be strong now, but rent will inevitably decrease over time if your property isn’t well maintained. In our next post, we’ll talk about how to determine if a management company has a strong preventative maintenance and repair program in place.

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The Realty Medics are the nation’s leaders in “Rocket Science Renting”: Rocket Science Renting is about keeping your life simple by letting someone else handle the complex work of property management for you. It’s knowing that your property is running smoothly, with no hiccups or glitches. It’s hyper-responsive customer service that gives you property management peace of mind. It’s advanced technology that could only be designed by a former NASA engineer like our owner, Ben Sencenbaugh. And it’s knowing that you’re always getting maximum value and ROI for your investment.

Orlando Property Management Hiring Guide

Let us handle the rocket science of renting for you!

CONTACT US

The Realty Medics
10027 University Blvd
Orlando, FL 32817

Phone: (321) 947-7653
FAX: (407) 965-3312

The Realty Medics are the nation’s leaders in “Rocket Science Renting”: Rocket Science Renting is about keeping your life simple by letting someone else handle the complex work of property management for you. It’s knowing that your property is running smoothly, with no hiccups or glitches. It’s hyper-responsive customer service that gives you property management peace of mind. It’s advanced technology that could only be designed by a former NASA engineer like our owner, Ben Sencenbaugh. And it’s knowing that you’re always getting maximum value and ROI for your investment.

11 Questions for Determining if You Need a Property Management Firm

While every investor’s situation is different, certain factors typically predispose owners one way or another.

The following questions will help you determine whether or not to hire a property manager.

1. How far do you live from your rental property, and how frequently can you visit the property on a regular basis?

If you’re close, you might be able to make the regular visits required for maintenance, inspections, collections, etc. Otherwise, the farther you live, the higher your travel time and expenses will be. The longer the distance, the more temptation there will be to NOT keep a close eye on things, and that can be a recipe for disaster. You should plan on making frequent visits, as well as for those middle-of-the-night emergency calls that require your immediate attention. In the long run, is this feasible for you?

2. How do you deal with stress? Do you consider yourself to be a tolerant person?

This is a tough one. We all like to think of ourselves as level-headed and even-keeled, but at the end of the day, it takes a special kind of person to deal with the ups and downs of property management.

Behind the seemingly simple task of collecting rent every month is a litany of unpredictable problems that can push people to their limits. Ask yourself how you would react in the unfortunate event that your tenants:

  • fight with other tenants or neighbors;
  • have domestic disputes;
  • conduct illegal business in the dwelling;
  • throw late-night parties or violate noise ordinances;
  • try to sneak extra people or animals into your home;
  • decide to sue you;
  • trash your property;
  • incite the wrath of your HOA because of repeated deed restriction violations; or
  • refuse to pay the rent because they are a “professional tenant” and know how to work the legal system for the maximum amount of free housing at your expense.

3. Are you currently overwhelmed with your property(ies)?

Managing rental properties can become quickly overwhelming, even for experienced investors. Something always requires attention, and things can quickly get out of hand. Hiring a property manager can help you regain control and restore stability to your properties and your life.

4. How many rental properties or units do you have?

As your portfolio grows, so do your management challenges. It becomes easier for things to fall through the cracks. Investors with large portfolios stand to reap significant benefits by leveraging the efficiencies a property manager can provide. Portfolio size can also constrain investors’ ability to consider purchasing new properties if they’re already maxed out managing their current holdings.

5. How much experience do you have with maintenance and repairs?

If you can’t do it yourself, do you know who to call? Finding reliable handymen and contractors can take a while. In the meantime, you may unknowingly hire people who are unethical, uninsured, do poor quality work, overcharge, etc. Maintenance and repairs are significant components of landlording, and if you question your ability to ensure that the work is done quickly and well, you might want to consider hiring a property management company.

6. How quickly are you able to get your unit rented?

Advertising, fielding calls and showing the unit can quickly eat up your time. But because vacancies can quickly eat into your profit margins, they’re critical tasks. If you question whether you have the skills or time to make this happen, OR if you have historically had an unacceptably high vacancy rate, you may want to consider hiring a property management company.

7. Are you capable of handling the accounting and record-keeping for your property?

From profit and loss statements to tax deductions, this area needs special attention and becomes increasingly burdensome for owners of larger portfolios. Some owners (especially those with a background in finance) will do just fine. Others may opt to hire an accountant to help with the bookkeeping. If you feel like this might be a weak point for you, you might want to consider hiring a property management company.

8. Are you willing to be on call 24/7/365?

It’s important to answer this question honestly, because ignoring emergencies at your property is NOT an option. Your special event, important meeting, vacation or personal crisis doesn’t relieve you of your obligations to your tenants. These emergencies don’t happen all the time, but when they do, you’re obligated to handle them immediately. Can you handle being called at 2 a.m. to fix someone’s overflowing toilet?

9. Are you willing to confront tenants about late payments, and evict them from the property if necessary?

Many new owners dislike feeling like the “bad guy” in a landlord-tenant relationship, so they go out of their way to make exceptions to the rules. The problem: This only invites additional abuses and excuses by tenants. Late payments must be dealt with immediately, and while sometimes a friendly reminder is all that’s needed, other times it can be a very confrontational process that needs to end in eviction. Unlike running a charity, running a successful rental business means enforcing the rules—even if it means evicting a single mother who lost her job and won’t be able to pay the rent anytime soon.

10. How well do you understand the laws governing landlording?

Ensuring that the property is run in accordance with the law is critical in preventing lawsuits and shielding yourself from liability if you’re sued. Familiarity with contracts is also very important, as your rental agreement is the only binding agreement between you and the tenant.

11. From a financial standpoint, is managing your property the best use of your time?

Ultimately, your decision to hire a property management company should hinge on whether or not it fits your lifestyle and makes good financial sense. Individual investors will have to assess the opportunity cost of both options based on their unique circumstances.

Property Management Hiring Guide

Let us handle the rocket science of renting for you!

CONTACT US

The Realty Medics
10027 University Blvd
Orlando, FL 32817
Phone: (321) 947-7653
FAX: (407) 965-3312

The Realty Medics are the nation’s leaders in “Rocket Science Renting”: Rocket Science Renting is about keeping your life simple by letting someone else handle the complex work of property management for you. It’s knowing that your property is running smoothly, with no hiccups or glitches. It’s hyper-responsive customer service that gives you property management peace of mind. It’s advanced technology that could only be designed by a former NASA engineer like our owner, Ben Sencenbaugh. And it’s knowing that you’re always getting maximum value and ROI for your investment.

Areas We Serve in Florida

We’re happy to serve many of the surrounding areas here in Central Florida. Below are the current cities and locations that we operate in. If you don’t see your area listed, don’t hesitate to reach out to us and we’ll see if we can work together.

The Realty Medics Guarantees

We are very proud to be the highest rated and most reviewed Property Management company in Central Florida. We guarantee results and have the lowest rates to support our results-driven philosophy.

14 Day Rental Guarantee

If we don’t rent your home in 14 days you get one month FREE management.

90 Day Money Back Guarantee

If you, the Owner, is unhappy for any reason, we will refund your management fees

6 Month Tenant Guarantee

If a tenant is removed in first 6 months, We find you a new tenant free of charge.

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CONTACT US

Phone: (321) 947-7653
FAX: (407) 965-3312

LOCATION

The Realty Medics
10027 University Blvd
Orlando, FL 32817

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