Hiring a property manager is one of the most important things you’ll do as a landlord, and before you sign the property management agreement, you need to read it carefully. Understand what’s in the contract and how it affects the services you receive and the amount of money you pay.
Property Management Outline of Services
One of the first things to look for is an outline of the property manager’s general responsibilities. This will include duties such as collecting rent, hiring vendors to make repairs, scheduling inspections, overseeing the move in process and the move out process, conducting a tenant screening process and effectively placing a highly qualified tenant. There will also be some other responsibilities listed depending on the management company’s scope of work and the things you have agreed upon.
Property Management Fee ScheduleNext, you want to check the management agreement for the property manager’s fee schedule. This should be clear, transparent, and easy to understand. Most property managers charge a one-time fee for tenant placement and then a monthly fee after that for the ongoing care of the property. Ask any questions because you don’t want to be surprised by extra charges or sudden costs later. Find out if the fee is all-inclusive or if extra fees are charged above and beyond what you’re already paying.
Property Management Out Clause
Finally, you want to look for an out clause. During the term of your property management agreement, you may need to end the contract early for any number of reasons. Make sure your agreement states what you need todo. There might be a requirement that you send a letter 30 days or 60 days before you want the contract to end, notifying the property manager that you’re terminating your property management agreement.