How to Find a Good Property Manager

Where to Find Property Management Candidates

The search for a property manager should start with referrals, not Google. Ask other landlords in your area who they use and whether they are satisfied. Local real estate investor associations (REIAs), BiggerPockets forums for your metro area, and real estate agents who work with investors are all strong sources. An agent who sells investment properties will know which management companies their clients use and which ones generate complaints.

After gathering referrals, check the National Association of Residential Property Managers (NARPM) directory for your area. NARPM members must follow a code of ethics and pursue ongoing education. Membership alone does not guarantee quality, but it does indicate a baseline level of professionalism.

Aim to interview at least three companies. If you can only find one or two in your area (common in smaller markets), expand your search radius. Some management companies operate across county or even state lines.

Key Questions to Ask During Interviews

The interview process reveals more than any website or brochure. Here are the questions that separate competent managers from mediocre ones:

How many units do you manage, and how many staff members handle them? A company managing 500 units with two property managers is stretched thin. A ratio of one property manager per 100 to 150 units is typical for responsive service.

What is your average vacancy rate and time-to-fill? A good management company should maintain vacancy rates under 5% and fill units within 2 to 4 weeks in most markets. Ask them to provide actual data, not estimates.

How do you screen tenants? The answer should include credit checks, criminal background checks, income verification (requiring 2.5x to 3x monthly rent), employment verification, and landlord references. If they skip any of these steps, move on.

How do you handle maintenance? Ask whether they have in-house maintenance staff or use outside vendors. In-house teams are faster but may cost more. Ask about their markup on vendor invoices (10% to 20% is standard). Ask what dollar threshold requires owner approval before proceeding with repairs.

Can I see a sample management agreement? Read it carefully. Look for the termination clause (how much notice you must give and whether there is a cancellation fee), the fee structure, who holds the security deposit, and what happens to the management fee during vacancy.

Understanding the Fee Structure

Property management fees are more complex than a single percentage. A complete picture includes:

• Monthly management fee: 8% to 12% of collected rent for single-family homes, 5% to 8% for multifamily with 10+ units. This fee is typically charged only on rent actually collected.
• Leasing fee: 50% to 100% of one month's rent for placing a new tenant. This covers marketing, showing the property, screening applicants, and executing the lease.
• Lease renewal fee: $150 to $300 or a small percentage of monthly rent. Some companies include this in the management fee.
• Maintenance markup: 10% to 20% added to vendor invoices. Some companies charge a flat coordination fee instead.
• Vacancy fee: Some companies charge a reduced monthly fee (often $50 to $100) even when the unit is vacant.

Compare total annual cost across companies, not just the management percentage. A company charging 10% with no leasing fee may cost less overall than one charging 8% with a full month's leasing fee.

Red Flags and Due Diligence

Before signing, do your homework. Check the company's Better Business Bureau rating, read Google and Yelp reviews (particularly negative ones), and ask for three references from current landlord clients. Call those references and ask specific questions: How quickly does the company respond to your calls? Have they had any billing disputes? Would they hire this company again?

Red flags include: a management agreement that is difficult to terminate (90+ day notice or large cancellation fees), reluctance to share financial reports or give you online portal access, a single point of contact with no backup (what happens when that person goes on vacation?), and any company that commingles owner funds instead of maintaining separate trust accounts. Commingling is illegal in most states and is a serious warning sign.

For a comparison of self-managing versus hiring a property manager, see Self-Managing vs Hiring a Property Manager.