Here are a few questions to ask when choosing a property management company:
What fees are charged?
Most property management companies charge a monthly management fee. The average fee on the island of Oahu is 10%. There are a couple of the larger companies that charge 12% per month. There are also a few discount companies or real estate agents that do property management as a side business that may charge 8%. However, most professional property management companies charge 10% of the monthly rent.
Are there any hidden fees?
Some companies may charge a discounted monthly management fee below 10%, then include additional ala carte fees for additional services such as advertising fees, set up fees, minimum management fees when the property is vacant, and a host of other types of fees. Make sure you fully understand that fees are being charged for all of the services that you will need in the management of your property.
How many homes, and what types do they manage?
Many companies and individuals offering property management services today specialize the buying and selling of real estate and offer property management as an additional service to the real estate brokerage. Some may manage just a handful of properties. You may want to make sure that your property management company specializes in offering property management services. Professional property management companies will often specialize solely in property management services.
How many homes do they lease per month?
Companies and individuals that offer property management services as a side business may lease out just a few properties per month. Some may rely on the same advertising and marketing strategies used when marketing a property for sale. Professional property management companies will utilize unique and specialized marketing and advertising strategies to market a property for rent which are different tools and strategies than listings of properties for sale. Make sure the company you are working with knows the difference.
What are their average days on market?
How much will an additional 30 days on the market cost you? The average days on the market for the average rental property in Honolulu is approximately 56 days. A professional property management company can likely rent your property in 30 days or less. How much would an additional 26 days cost you when renting out your property?
How quickly do they get your monthly rental proceeds to you?
While professional property managers will often have proprietary software to collect rental payments online and accept ACH payments and credit cards, others may still be waiting for the rent to arrive in the mail each month. Then send the owners their checks through the mail at the end of the month. Make sure your property manager is using the latest tools and technology to collect rent and to get your payments to you each month.
These are just a few of the questions you may want to consider when choosing a property management company. Click here for a summary of the common services provided by property management companies.