There are many kinds of real estate investments: homes, apartments, office buildings, retail buildings, mobile home parks, and marinas, to name a few. Each one of these properties needs care and attention. Either you take care of it yourself, or you hire a property manager to take care of it for you. If you have ever managed a property yourself, you probably have had enough of the tenants calling you in the middle of the night (or just badgering you about property issues), and you may want a buffer between yourself and the tenants. Or you may find as you get busier and busier and the laws regulating property get more and more complicated on the federal, state and local level, you probably run out of time to take care of the investments yourself and have to consider hiring a property management company.

But how do you hire a management company and still make a profit? The first thing you probably do is talk to your friends, your attorney or your CPA to see who they know and would recommend. You might even grab the yellow pages and see who is advertising.

Once you have assembled a list of companies and before you call them, you need to decide what your goals are for your property and your expectations for the property management company.

Your goals might sound something like this:

• Keep property rented
• Manage roof install project
• Prepare an annual budget
• Annually inspect the property and send you a report.
• Send you a monthly financial report
• Help you lease up property

Before you dial the phone and the friendly owner of the management company answers your call, you need to consider what questions you are going to ask her. It’s a good idea to have a property description and income and expense information available for them to be able to give you a detailed response to your questions.

• How long have you been in business? (You are looking for long-term stability.)
• How much insurance do you carry?
• Do you have experience in the kind of property I want you to manage? How much experience?
• Is your staff bonded?
• What does the bonding and your insurance cover?
• Are you accredited by a national organization?
• How do you collect the rents?
• If a tenant does not pay what do you do?
• How do you select tenants for my property?
• How will you staff my investment?
• Can I meet the property manager who will be directly managing my property?
• How much do you charge monthly? Are there additional charges?
• What service do I get from you?
• Do you send me monthly reports?
• What is included in my monthly reports?
• How do you handle property maintenance?
• How much could the maintenance cost?
• How do you advertise vacancies?
• Can I visit your office?
• How do you handle property emergencies?
• Can you give me some example of your attention to detail?
• What sets you apart from your competition?
• Tell me about some of your success stories?
• Tell me specifically how you will take care of my investment?
• Do you have references I can call?

Once you have answers to the questions you probably will have a good idea of how the company is run and how well your property will be taken care of. You might ask or try to get a feel for the company’s key operating philosophies and focus on tenant and customer service.

Clearly the questions you ask will also depend on the size of the property you are planning to have managed and the results you expect. For example to successfully manage a house, tenant selection, screening, as well as rent collections and property maintenance are key issues. To manage an office high rise with multiple tenants, accounting systems, experienced maintenance engineers, security, insurance, the ability to keep the tenants happy over a longer term and the experience of the onsite management staff makes a major difference.

Once you have selected your property management company, have confidence in your selection. If you have done your homework, you should have a team of qualified professionals caring for your property. You can be confident they will follow the law and abide by a code of ethics. Our company has many clients that have been with us for over 25 years. They trust us to take care of their investments as if they were our own.

In the end after you have evaluated price, experience, and accounting reports, the key decision factor will be the level of trust you have in the management team of the company that will be taking care of your property.

Published: June 12, 2003

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Clifford A. Hockley is the President of Bluestone & Hockley Real Estate Services, one of the larger brokerage and property management companies in Portland, Oregon. Mr. Hockley holds an MBA Willamette University and a B.S. in Political Science from Claremont McKenna College. He is a Certified Property Manager and Bluestone & Hockley Real Estate Services is an Accredited Management Organization (AMO) by the Institute of Real Estate Management (IREM). Mr.Hockley serves as member at large on the Portland IREM board. He has twice been named Certified Property Manager of the Year (2001 and 2003) by the Institute of Real Estate Management and is a frequent contributor to industry newsletters.