Owning and managing a rental property can be a full-time job, even if an investor only has one rental. That’s why many investors hire a property management company to take care of day-to-day issues like dealing with a tenant, making repairs, and paying bills.
But as with most things in life, not all property management companies are created equal.
In this article, we’ll discuss 20 key property manager interview questions to ask, beginning with how to ask the right questions.
Key takeaways
- Asking open-ended interview questions requires a property manager to respond with something more than just a yes or no.
- Key property manager interview questions include asking details about the company, historic portfolio performance, and whether the manager also owns rental property.
- Some investors like the idea a property manager is also a real estate investor, while others may view the management company as a competitor.
How to ask questions
Before we talk about interview questions to ask a property manager, let’s cover tips for getting people to talk. By knowing how to ask questions, a property owner is better able to get the answers needed and the right information.
Techniques for asking questions include:
- Use open-ended questions instead of Yes or No questions. An example of an open-ended question is “What types of rental property do you manage?” versus a yes-or-no question like “Do you manage rental property?”
- Ask follow up questions that require the person being interviewed to provide detailed information. Examples of open-ended follow-up questions include “Why do you say that?” or “What makes you think that?”
- Don’t interrupt when the person being interviewed is “on a roll.” Let them speak, because you never know what they might disclose or where the response might lead. Listen carefully to what they are saying, then politely bring them back to the topic at hand when the time is right.
- Silence is golden, and that’s especially true for a person doing an interview. People naturally feel that they need to speak when the other person isn’t, and waiting for a response may often elicit the critical information a landlord needs when interviewing a prospective property manager.
20 property manager interview questions
Now that we’ve covered how to ask questions, here are 20 essential interview questions to help find a property manager for your rental property.
1. What types of rental properties do you manage?
Single family rental homes, small multifamily properties, condos, and townhomes all may attract a different type of tenant and require different management routines and skill sets. Selecting a property manager who has experience with the property type an investor owns may help to increase the odds of finding the right manager for the property.
2. Do you currently manage rental properties near the one that I own?
A property manager who has homes in the same neighborhood may be able to respond quicker to tenant maintenance requests when the repair staff doesn’t have to drive across town. The manager may also be able to conduct more frequent inspections – including drive-bys – when the company has homes in the same general area.
3. What should I know about your company?
This open-ended question is designed to learn more about the property manager and company. Items to cover include how long the company has been in business, how many people work for the company, and what type of training and designations the property management team has.
4. How many properties are you managing this year?
Some investors believe that the more properties a company manages the better, because there are economies of scale such as potentially lower maintenance fees. Other owners prefer to work with a smaller property management company that knows every owner and tenant by name. A good follow-up question to this one is, “Do you plan on adding to the number of properties you have under management, and why?”
5. What is the historical performance of your property portfolio?
This question is designed to give an investor a big picture overview of how effective a property management company is with all of the properties under management. Common criteria used to measure the performance of a property portfolio include cash flow, net operating income (NOI), return on investment (ROI), capitalization rate, cash-on-cash return, appreciation, and vacancy rate percentage.
6. How long has your average client been with you?
Once an investor finds a good property manager they generally don’t leave until they sell a property – or something goes wrong. Follow up questions include, “Why did your most recent client leave?” and “How many clients on average do you add and lose each year?”
7. What is the average length of time it takes to lease a vacant property?
By comparing the answer to this question with a market’s average vacancy time, an investor can better understand how much rental revenue will be gained or lost. For example, if it takes a property manager more or less time to lease a vacant property than the market average, it could be due to charging too much rent or having rental rates that are too low.
8. Could you explain how your marketing and prospective tenant screening process works?
There’s quite a bit a property manager can do online to find the most qualified prospects for a vacant home.
Online listing service websites like Zillow and Realtor.com have millions of viewers each month, while tenant screening services like E-Renter and RentPrep simplify the process of screening for the most qualified tenants.
A property management company should also understand local and state landlord-tenant and fair housing laws to ensure that all applicants are treated equally and fairly.
9. How do you determine the fair market rent?
The best property manager will know the going rents for comparable properties in the market place. While an investor wants to maximize potential income, charging too much rent may lead to higher vacancy, while charging too little may end up leaving money on the table.
10. How often do tenants need to be evicted?
Eviction is a fact of life in the rental property business, even with thorough tenant screening and a great property management company. After finding out how many tenants are evicted each year, an investor may follow up by asking how the state eviction process works and what steps the property manager is taking to help reduce the eviction rate.
11. Could you describe a recent situation with a difficult tenant and how the matter was resolved?
Asking this question will provide better insight into the property manager’s people skills and problem solving abilities. Common tenant situations may include a tenant who constantly complains, someone with a secret roommate or pet, or a tenant who always pays the rent late.
12. How does your fee system work?
Property management fees may vary from one market to the next. In general, a property manager will charge a monthly fee equal to 8% of the rent collected, plus leasing and lease renewal fees, and sometimes a start-up or onboarding fee to set up a new account.
13. What extra charges are there in addition to the monthly management fee?
Some property managers nickel and dime with miscellaneous fees, while others provide straightforward and transparent pricing plans. Extra charges and fees some property management companies charge may include an advertising fee to market a vacant property, a mark-up on maintenance fees, and an extra charge to perform a routine property inspection.
14. Who takes care of routine maintenance requests?
A property management company may have an in-house repair staff, a network of trusted and cost-effective outside contractors, or a combination of both. Oftentimes a property manager will employ a full-time handyman to deal with minor issues like plumbing leaks, and hire an outside company for specialty work such as servicing or repairing a heating and cooling unit.
15. What is your routine for conducting periodic inspections?
Property inspections should be conducted when a tenant moves in and out, and periodically throughout the time a tenant is occupying the property.
As a rule of thumb, complete interior and exterior property inspections are conducted once or twice a year to identify and repair minor maintenance issues before they become big and expensive.
Routine inspections also help verify that a tenant is taking good care of the property, and to remind a tenant of things that they should be doing. Property drive-bys may also be conducted at different days of the week, including evenings and weekends, to view the property from the outside without disrupting a tenant.
16. Does your company require a reserve account and how is that amount determined?
A reserve account holds a specific amount of money that a property manager can access to pay for maintenance issues and emergencies without having to ask an owner for additional funds. A management company may determine the amount held in reserve based on a percentage of monthly rent, the age of the property, or a manager’s experience with similar properties in the same area.
17. When do you send owner distributions and how are the funds sent?
An owner distribution is the money left over at the end of each month after the rent has been collected and the bills have been paid. As a rule of thumb, a property manager may make owner distributions between the 15th and the end of the month, with money transferred electronically directly into an owner’s bank account.
18. What types of reports do you provide and how are they received?
Typical financial reports for a rental property include a monthly and year-end income statement, net cash flow, and capital expenses reports. Many companies use property management software that provides an owner with an online portal for monitoring property performance and downloading reports.
19. Do you, your company, or your staff own any rental properties?
Some investors like the idea of a property manager also being an investor, because the manager may have a better understanding of how the rental property business works. On the other hand, working with a management company that also invests may mean the manager is saving the best tenants for their own business. Even if a property manager promises not to compete because it would be unethical, it may be difficult for an investor to verify that the manager is acting fairly.
20. Why should I hire your company instead of someone else?
Saving this question for the end gives a property manager the opportunity to bring up reasons for doing business with the company that an investor did not ask. The manager may try to close the deal by offering an investor an incentive or signing up, or allow an investor to speak with satisfied clients the management company currently has.
