How to Hire the Best Property Management Company
When hiring a property management company, thinking through the process will make your task more effective. There are many property management companies to assess, each with their own operating style, so you will want to be clear about what you need to fit your board and community’s needs. There’s also the question of what to expect from a property manager.
Where do you start? “Figure out exactly what you need,” advises Trevor Salway, regional vice president of business development at FirstService Residential. “The number one reason boards are unhappy with their property management companies is a misalignment of their needs,” he explains. “So, before you begin the selection process, have all of your board members assess to determine the needs of your property and community. Start with any big projects on the horizon and focus on the residents – why they chose to live there, what they’re proud of and what they’d change.”
Build a Request for ProposalOnce you’ve identified what you need from a property management company, build a proposal request with questions you would like to ask each company. When you go from company to company, don’t fall into the trap of asking different questions each time. Based on the needs you have identified, develop a proper list of substantial interview questions for every firm to answer. In this step, you want to get the basics down, such as the essential questions of whether a firm is local or national, how long they have been in business, and whether the firm is licensed and certified. If you have specific issues in your current management company, make sure you identify questions that will help you rule out other companies with similar problems.
Here are a few other questions to help fuel your decision-making:
- Do you provide full-service management?
- What operations and maintenance services do you provide?
- How many properties do you manage?
- What are your staff and client turnover rates?
- What do you think is the optimal solution to our needs?
- What other communities do you serve in this area?
- May I have three reference names and contact numbers from current clients?
You should also ask the potential management companies about any value-added services and capabilities they offer. This includes budgeting, banking, insurance, state and local compliance, advanced technology, vendor relationships, combined buying power, 24/7 customer service, energy-saving programs, training programs and more. The more services they provide, the better, but if you only need about half of these services, you should ensure you are not going overboard in costs.
Salway warns Boards to be careful of companies that take a “one-size-fits-all” approach to management. You’ll be in for a surprise if you choose a property management company that applies the same process as they would any other property. “Allow each management company to tour the community and ask questions themselves,” he counsels. The better a property management company understands your unique needs, the more they can provide you with their vision as to how they plan to take care of your community. They can also customize recommendations that accomplish your goals, he explains. You can have a back-and-forth conversation that digs into the specifics of what your property needs. This even begins the professional relationship you will need to make the partnership work.
Check ReferencesOnce you have reached the final stages of choosing a property management company and have gotten references, take your time with each one. Ask the references how satisfied with the company you are considering, and for how long they have been working with them. The longer, the better, since this means they have had a productive working relationship with the company. You can do this process using a phone call, or you can go a step further and visit the community in person. This gives you a first-hand view of the services each candidate firm provides and the resident’s quality of life.
Review the Management ProposalReading through a contract or proposal is not the most exciting thing, but you must carefully read every word. This way, you can get a clear idea of what the company is proposing as its scope of responsibility - and what they expect of you in return. During this time, it is not rare to ask each company about their fee structure and a sample management contract.
This is a process to find a property management company that will help take care of your property and bring out the best in your resident’s quality of life. It is not in your best interest to look for the lowest price possible, as you won’t be getting a full scope of excellent services. However, this doesn’t mean you need to find a highly priced company to work with either. This is where value outweighs the price. In this case, value is being given the right number and type of capabilities at a reasonable price. A good property management company will understand this and should be able to have proper benchmarks in place to help you find areas of cost reduction.
Look for Value, not Price
A good property management company will make your role as a Board Member rewarding – and it will make your community more inviting, attractive and desirable for your current and prospective residents. You should also be looking for a well-trained property manager. For more help in choosing the right company to meet the needs of your board and community, contact FirstService Residential.