How To Choose a Property Manager: 3 Research Steps

Between open homes and tenant background checks to handling maintenance and last-minute emergencies, you've realised that making 'passive income' from managing a rental property isn't very passive without some outsourcing. The next question is how to choose a property manager that will work to achieve the best possible outcomes for you financially, as well as making life easier.

If it's passive income you're after, choosing the right property manager will pay off enormously in terms of how much time and effort is required. But how do you choose a property manager when there's so many options and even new-wave alternatives on the market? It all starts with research. Here are three ways to research property management companies effectively to find the right one for your home.

Choosing a property manager step #1: Look past page 1 of Google

Like anything these days, most searches start online. Although it's important to note, the names that pop up first aren't always the best. Generally these companies will be the ones who invest the most in marketing and therefore are easier to find. So it's important to dig deeper with questions such as:

What are their reviews like?

Are customers raving about them on Google, Yelp and Zillow? Are they rated 4.5 stars or above? How many reviews do they have? Over 100 positive reviews is going to say more than a company who has 20 reviews in total. Do the negative comments seem like personal gripes or serious complaints? When you're compiling a short list, take a moment to scan through some of the reviews to look for consistent themes around helpfulness and potential deal-breakers.

Do they have a good reputation in the industry?

Every state has its own laws regarding the certification of property managers: for more information on the requirements specific to your state check the links collated here. There is a handful of national trade associations that you should consult with, too. The most prominent association by far is the National Association of Residential Property Managers. 

You don’t have to be a member of these groups to do business as a property manager, so it shouldn’t necessarily disqualify a candidate if they aren’t. But that being said, if they are completely unaffiliated, it’s something of a red flag.

There are also databases online that you can check to see how a company stands within the industry, such as the Better Business Bureau.

Do you believe in what they do? 

Take a look at the company's website and find out what they're about. What do they believe in, what is their company culture, history or presence like in your neighborhood? Is it easy to find the information you need? There are occasionally some excellent old-school property management companies who don’t have the strongest online presence, but a nicely designed site that is user-friendly is never a bad sign that they're considering the experience of their customers.

Finally, do you believe in their mission and trust the people working for them? Are they growing, with a happy customer base? For instance, Belong's mission is to connect people who own and love a house, to people who want a place they can live in and love. This ethos is why we're growing so fast and making people happy in San Francisco, Los Angeles, Seattle, San Diego, Orange County, and Miami - with many more to come. You can even take a look at the careers section of our website to give you the confidence that anyone who is involved with your home is someone that approached their job with passion and respect.

Choosing a property manager step #2: Ask around

Do you know any other landlords in the local area? Or renters, for that matter. Both will have a great perspective on the quality of service provided by the company that manages the building or home they live in. They can give you some lived experience on what to be wary of too, or what makes a positive/negative experience. With a few good recommendations in your pocket, you can add these to your online research list to start vetting.

Choosing a property manager step #3: Prepare some questions

It's all well and good to get the warm-fuzzies from a mission statement or flashy website, but how does your chosen property manager perform? Here are some questions to consider for research or to ask any property manager you decide to interview:

• How many properties does the average manager have assigned to them?
• What are the property managers average vacancy periods?
• What is the average lease term? Do many tenants stay on long-term?
• What is the fee structure? What services are included?
• How does the property manager screen for applicants?
• How does the property manager handle evictions if things don't work out?
• How many units does the company manage?
• How does the company manage and charge for maintenance requests? i.e what kind of contractor network do they have and do they mark up those services?

The fees and charges is a big one. The average rate is between 6 and 10 percent, but some property managers will charge extra for a whole range of services from marketing and staging to generating leases and evicting tenants.

Researching Belong as a property management alternative

While researching how to choose a property manager, consider an alternative to the traditional agencies: Belong. Belong manages everything about rental homes, so you won't have to lift a finger.

And to answer some of the research questions upfront, Belong homes are leased in 19 days on average, has 66% less vacancy and 71% of Belong residents renew their 1-year lease. Oh and we never upcharge for marketing and advertising (including photos and virtual tours!), call outs, moving in/out, lease renewal, evictions, or market price analysis. It's all covered by the low management rate of 6%. Plus, all maintenance expenses, management and placement fees are tax deductible.

To learn more about why Belong isn't your garden-variety property manager, check out our dedicated homeowners page or use the calculator below to do some back-of-the-napkin math.