The Toronto real estate market is hot. More often than not, investors are scooping up residential properties with the promise of a great ROI. However, being a landlord requires hard work and dedication. That's where property management companies come into play.
A rental management company can be a great benefit to you, the property owner, provided you choose the right one. How do you do that? Great question! Trusting someone else to manage your property can be challenging. Before you start your search for the right property management company, it is important it have a clear understanding of how it works. As a landlord, you are responsible for paying the mortgage, insurance and property tax as well as providing funds that will go toward maintenance and needed repair. Everything else that pertains to the renting of your property will be overseen by the property management company.
A few months ago, we published a blog post, Five Things to Consider when Choosing a Property Management Company, in which we shared a few guiding principles on what to look for in a property management company. We decided to make this process even easier by developing a check list that you can actually print out and take with you when you are interviewing rental management companies.
Do Your Homework
- Check References
You will want to ask them for references from other landlords who are currently using their services as well as former clients. Call these references.
- Check Reviews
You can learn a lot about a property management company's priorities by reading their online reviews. It is inevitable to find a few negative reviews, however, you will certainly get a good feel for what type of business they are running.
- Check Public Records
A great place to start is with the Better Business Bureau, Canadian Consumer Handbook. A quick look on their site will allow you to navigate to the specific market you would like to focus your research. Click the link provided and then search for the property management company you are researching. If they are registered with the BBB, you should be able to find a lot of information regarding their business practices as well as consumer satisfaction.
You will want to know their fees for managing your property and what is included in those fees such as arranging for repairs and checking tenant references or if these are additional expenses. A good rental management company will make it easy for you to understand their fee structure, what is included and what may be extra costs.
- Liability Insurance
Ask if he or she at least has liability insurance. Some municipalities and provinces require this, but this should be confirmed.
- Cancellation Clause
You will want to look for a cancellation clause provided by the rental management company. If they do not provide one, ask for it. This clause will outline circumstances that will allow either of you to end the contract early. This will also detail costs involved should that happen.
- Property Inspections
Find out how often they conduct a formal inspection of the property. A full inspection of the inside should be done with each new tenant, while the outside should be inspected quarterly.
- Account Processes
You will want to find out how frequent they provide statements and reports. Asking questions about their accounting systems will be beneficial as well. Here at Real Property Management, we provide an online portal offering a full suite of accounting services including a trust, rent collection and bank receipts.
- Screening of Tenants
Ask how they screen tenants. Do they do a criminal background check, a credit check and call references? At Real Property Management, we do each of these as well as conduct a personality test. Our method of screening consistently proves to be effective in placing the right tenants in the right property.
You will want to know how quickly the property management company will respond to your phone calls. Do they make every effort to return your calls as soon as possible? How quickly do they respond to tenant calls or requests? Do they have a plan in place for dealing with emergencies after hours? Along these lines, do they contract out for repairs and maintenance or do they handle these issues themselves?
How will they advertise your property? Do they use local rental listings? Do they put up signs on the property? Do they list local schools and other amenities that are within walking distance of the property
- Number of Properties
Find out how many properties they currently manage. This will be an indication of how well they are at maintaining business relationships and expose their level of experience and knowledge.
Landlord's Self-Help Centre
A non-profit community legal clinic offering support to Ontario's small-scale landlord community exclusively.
Federation of Rental-housing Providers of Ontario
The largest association in Ontario representing those who own, manage, build and finance, service and supply residential rental homes. Their primary objective is to promote a balanced and healthy housing market with a vital rental-housing industry.
We hope you find great use from this guide. If you are ready to begin interviewing, let's get started. Real Property Management manages dozens of properties in the Greater Toronto Area providing full service, worry free solutions for property management. Our goal is to protect your investment saving you time, effort and money. This way you maximize your cash flow, minimize your tenant vacancy period and have a well-maintained property. Schedule a meeting today and you're one step closer to getting a return on your investment.