Operating an apartment building is no mean feat – it’s a 24-hour job that forces you to deal with maintenance, repairs, tenant screening, and more. If you don’t have the time, energy, or experience needed to run a rental, it’s best to entrust operations with a California property management company.
Working with a property manager not only gives you peace of mind, it can also make your investment property more lucrative, not to mention free up your time for other investments and wealth building ventures.
But with so many property management companies California, how do you choose the right one?
These strategies will help you find a property manager for your apartment building.
You can start the search online. A quick Google search should turn up a list of property management companies serving your area. From there, you can do more research on the company by visiting their website, checking their social media accounts, and reading online reviews and client testimonials.
Ask for referrals
Reach out to your professional network and business contacts for recommendations. Speak with a colleague who has successfully worked with a property manager in the past and ask for referrals. The ones who are likely to have more experience with property managers tend to be property investors, contractors, and even brokers.
The R&Z Group of Marcus & Millichap has worked with many property managers indirectly and has great insight through the numerous clients we work with on a daily basis. We are always happy to help.
If they do make a recommendation, ask them what they think of the property manager’s strengths, weaknesses, communication style, and availability. If they terminated their contract, ask them why.
Schedule a site visit
Once you’ve narrowed it down to just a handful of companies, pay their properties a visit to find out how well they run things. The state and condition of the property will say a lot about their competence – if there’s trash littered all over the property, and if there are obvious repairs, you should take it as a red flag.
Feel free to speak with the tenants. Find out if their concerns are addressed in a timely manner and whether they have ever had issues with other tenants in the building. This will help you gauge their level of satisfaction with the rental.
Inquire with several companies
Keep your options open – speak with several property managers to determine which one should be handling your property. Organize the interview around these themes or categories:
- Education and expertise – How well do they know local and federal landlord and tenant laws?
- Services – How do they maintain properties, handle tenant disputes, and collect rent?
- Time and availability – How many properties do they manage and how many hours a day can they devote to yours?
- Fees and pricing model – How much do they charge and what is the method of payment?
Check their qualifications
In California, property management companies are required to have a valid real estate broker’s license.
However, there are exceptions – for instance, an employee of a property management company in charge of managing an apartment building may perform certain functions without a broker’s license if they act under the supervision of a licensed broker working in the same firm.
Visit the California Department of Real Estate (CDRE) to see the full list of requirements for property management companies operating in the state.
A property manager may also hold certifications and designations with the following trade organizations:
- The Community Associations Institute (CAI)
- The Institute of Real Estate Management (IREM)
- The National Apartment Association (NAA)
- The National Association of Residential Property Managers (NARPM)
These trade organizations award certifications to individuals who have completed rigorous training and continuing learning courses.
Know the terms of the agreement
The management agreement is a vital document that legally binds you and the property management company of your choice. Even if you are a seasoned investor, it is important to go through the terms of the agreement before signing on the dotted line. To protect your interests, have a real estate attorney go over the contract and make sure that there are no loopholes.
Make sure that the contract reflects what you discussed with the company during the interview and that their responsibilities are clearly delineated. The property manager’s role can either be comprehensive or specific depending on your arrangement.
Moreover, scrutinize the contract for compliance with California’s fair housing policies, cancellation clauses, and hold harmless provisions.
- California’s fair housing law forbids discrimination based on race, nationality, gender, religion, disability, and familial status.
- Cancellation or termination clauses cover the grounds and manner in which you may lawfully end your partnership with the property manager.
- Hold harmless provisions absolve one or both parties of legal liability for any damage or injuries you might incur.
You can also ask for a sample of a monthly report you can expect to receive from the company.
Lastly, make sure that all parties have comprehensive insurance that covers property casualty, general liability, and errors and omissions, at the very least.
Ready to look for a property management company in California? The R&Z Group of Marcus & Millichap would be happy to assist you. You can reach our professionals here. You can also reach us at 650.391.1758 and 650.391.1781.