The Top Questions You Should Ask a 360 Property Manager
One of the most important things you can do to locate a great property manager is to know which questions you should ask. The following list of questions will help you find a great property manager of 360 property management. These questions will cover the services offered, the fees charged, how the property will be maintained and how your money will be managed.
Questions Concerning the Fees for Services Provided by a Property Manager
Determine the fees that are associated with property management. 360 property managers will charge either a set fee or a percentage of the rental price. Typically, this will be between four and ten percent of the monthly rent. When talking about fees, ensure that the fee is based on the rent that is collected rather than the rent that is due. This will prevent you from paying a property rental fee should the property become vacant. Be careful if the property manager quotes a low management fee. Some property management services only collect rent while other provide a full range of services, including handling maintenance requests, finding and vetting tenants as well as even helping with taxes. If you need services such as tenant maintenance, assistance with your taxes or the handling of maintenance requests, a low maintenance quote may not be a bargain when you either have to handle these issues yourself or you have to pay extra for these services.
Find out if there are additional fees for advertising, handling evictions, placing tenants, providing maintenance, etc.
Some property management companies charge an additional fee for filling a vacancy. The typical fee for this service is half of the first month’s rent. There should be stipulations in your contract that states that the fee will be refunded to you if a tenant breaks the lease, the tenant is evicted or if it takes longer than an agreed upon amount of time to find a tenant. If the property manager is unable to find a tenant, the leasing fee will be waived. Find out where the funds will be held. Will they immediately be sent to you? Will they be placed into an account for any necessary repairs? Who will have access to the monies in this account?
You will need to determine how the property manager will be paid, when you will receive your money and whether it will be paid using direct deposit or if a check will be mailed to you. You should also find out if the property manager will provide you an income and expense report.
What Essential Facts Should You Know about the Property Management Agreement?
When you find a 360 property manager, they will ask you to sign a property management agreement. Before you sign anything, carefully read the contract so you know what you are agreeing to. Continue reading to learn the six parts of a property management contract that should be examined carefully.
Associated Fees and Services Provided
This part of the property management contract is essential. It will provide you with information on the service that the property manager will perform and the fees associated with these services. Are the fees included in the management fees or will there be an additional charge for these services? Finally, are there any services that the property manager will not perform?
The Responsibilities of a Property Owner
This part of the management agreement will explain what your obligations as a property owner are. This may include things that you are not allowed to do, such as entering the property when it is rented, collecting rent, etc. These things should only be done by the property manager.
Equal Opportunity Housing Policies
All rental policies should include the Equal Opportunity Housing seal. The contract must state that the property management company will abide by federal and state fair housing laws.
Liability and Insurance Policies
This part of the contract is essential. It limits the property management company’s liability. This clause states that the property manager will not be held liable for damages unless they have been negligent. The property manager will not be held liable for any negligence of a third party that is hired. For example, if the property manager hires a contractor to perform maintenance and the contractor damages the property, the property management company will not be liable. In this case, the contractor will be held responsible for any damage they do to the property.
The Duration of the Property Management Contract
When you sign a property management contract, it should include the duration of the agreement. Try to avoid signing a contract with a long management agreement until you are sure the management company will perform their duties properly. Most management companies will require you to sign at least a year long agreement. If this is the case, review the termination clause carefully and determine if you are able to terminate the agreement if you are unhappy with the service that the management company provides.
The Termination Clause in the Property Contract
The contract should include a cancellation or termination clause. This clause should explicitly state the reasons that a property management can terminate the contract as well as the reasons that the property owner can terminate the contract.
Are There Fees If You Terminate a Property Management Contract Early?
Typically, if you decide to terminate the property management agreement early, there will be a fee. This fee can be as little as a few hundred dollars to the fees the property management would have collected over the term of the contract.
Reasons for Terminating a Property Management Contract
Determine if the agreement has a provision that allows you to terminate the property management contract. Oftentimes it will include a provision that states if the property management company does not find a tenant within an agreed upon amount of time the contract can be terminated. As you can see, there are many things to look for when signing a property management agreement. Fully read the agreement and ask questions if you are unsure of something. Finally, it is always a good idea to have an attorney read over a contract before signing it. This will ensure that the agreement is valid and you are protected.