How to Vet a Property Management Company?
10 Essential Areas & the Questions Every Owner Should Ask
The responses to these questions will tell you a lot about the property management company you are considering doing business with, how proactive they are in the risk management of their own business, as well as the risk management of your property and their engagement and implementation of property management best practice policies and procedures.
1. Network and Electronic Security:
Questions You Should Ask:
- Do you have computer security beyond a corporate firewall?
- What wireless security do you employ to ensure resident and tenant confidential information is not compromised?
- How often are servers patched? What is your resident identity information security policy?
- May I see a copy of it? (Don’t expect the company to give you a copy of it - seeing that it exists is sufficient.)
2. Software Programs and Updates:
Questions You Should Ask:
- How often do you update your network server(s) and desktop operating system software?
- Do you always run the most current version, or do you run versions that are multiple generations old?
- For example, what version of Windows server are you currently running?
- What version of Exchange do you run?
- What version of Office?
- What accounting software do you run?
3. Accounting & Financial Policy:
Questions You Should Ask:
- Do you have separate client checking accounts for each clients’ money; or do you use a trust account for all client rent receipts and building invoice payments?
- Do you follow GAAP?
- Do you run a double entry accounting system with a secure audit-trail?
- Is the software specifically designed and built for property management?
- What is your protocol for the processing and documentation of a late rent payment or a returned check?
- Is it written down?
- May I see it?
4. Application Policies & Procedures:
Questions You Should Ask:
- What are your resident application and qualification procedures and policies?
- May I see a copy of them?
- Is Fair Housing signage posted at each of the properties you manage?
5. Transparency and Information Access:
Questions You Should Ask:
- Will I have secure and private access to my building’s financial reports and other building information 7/24 from anywhere in the world?
- Will the records be maintained for me from year to year so I don’t have to store the records in another location?
6. Employee Training:
Questions You Should Ask:
- What annual training do you provide to or require for your staff?
- What is their minimum training?
7. Building Access and Security:
Question You Should Ask:
- Will a prospective tenant ever be given the keys to my property and allowed to visit my property alone, without the supervision of a licensed rental agent?
8. Resident Policies:
Questions You Should Ask:
- Do you conduct a Move-In walk-through inspection of the unit with the tenant, or do you let the tenant conduct the inspection alone?
- How do you confirm reported damage was not done by the tenant?
9. Advertising and Marketing:
Questions You Should Ask:
- What marketing (vs. advertising) do you engage in for vacant units?
- Do you have active social media identities on Facebook, LinkedIn, YouTube, Twitter and GetSatisfaction?
- Are your staff members involved in social media to the benefit of the company?
- What and when was your last company Tweet?
- What are you doing to proactively connect with the 21st Century prospective tenant?
10. Expense Controls:
Questions You Should Ask:
- What are your current clients’ average cost per unit for legal expenses at the end of a year?
- What risk management controls do you have in place?
- What cost controls do you have in place?
Review the Lightner Property Group responses
10 Essential Areas and Key Questions to Ask
to Vet any Property Management Company!