The choice of management company to manage your real estate, can determine whether your property will be successful or not.
Many management companies will be only too pleased to offer their services to you, often their representatives will hold themselves out to be knowledgeable and experienced, and they will of course, be charming and friendly.
The more aggressive will tell you that their management company is the best around, and perhaps it is, but you need to verify what you are being told before you accept it as true.
Many management companies will respond to your questions with answers you want to hear, rather than responses which are truthful and which might influence you not to appoint them as your management company. Even if we might lose the opportunity of having you as our client, you can expect an honest answer from us.
After reading through this report, you will have a better grasp of the essential characteristics of a property management company, and more importantly, know the right questions to ask.
Here are some of the questions you should ask and information you should seek, at a minimum, before hiring a management company:
How long have you been in business?
Obviously, the longer a company has been in business the more likely it is to have experienced staff, quality management and leadership, and sound financials. It will also likely have processes in place to handle everyday challenges and emergency situations. Protea’s president has been in the property management business in Canada since 1976, and in Dallas, Texas from 1983. Many of Protea’s staff have decades of experience as well.
What type of real estate have you managed in the past?
Make sure they currently manage or have managed your type of property in the past. If they don’t have experience with it, you are taking a big gamble. Protea has experience with Multi-family properties, Shopping Centers, Office Buildings, Home Owners Associations, and Industrial Complexes.
What types of real estate do you presently manage?
Some management companies might specialize in certain types of properties. It helps to know if they specialize in your type of property. Protea currently manages Multi-family properties, Shopping Centers, Offices and Home Owner Associations.
How large or small are the properties?
Do they manage your size property? If you have a small property, will they manage it without ignoring you for the bigger properties they mange? If you have a large property, do they have experience and manpower to handle the complexities of larger properties? Protea manages apartment communities ranging from 100 apartments up, Shopping Centers ranging from 11,000 SF to 300,000 SF, Offices of 67,000 SF, and Associations ranging from 64 to 345 units. In the past, Protea has managed an apartment community of 574 units, a shopping center of 794,000 SF and an office complex of about 290,000 SF.
How old are the properties you manage?
Older properties generally have more problems while newer properties bring their own concerns. Make sure that the management company has experience with a property the same age as your property. Protea has managed properties ranging in age from about 40 years to brand new.
How would you classify or grade those properties?
Does the management company only handle top-of-the line properties or will it take on something less than an A? Do they have experience managing a property with the same qualities as your property? Protea manages properties ranging from A+ to C-.
Do you have a staff of roving maintenance employees who can take care of my property in cases of emergency?
Obviously, maintenance is an important issue with all properties. What kind of response time can you expect from your management company for routine maintenance? In an emergency? Protea has a staff of roving maintenance employees in the Dallas/Fort Worth Metropolitan area of Texas available 24 hours a day, 7 days a week.
What experience do your employees have?
If the company hasn’t been around a long time, better make sure they have experience. The level of employee experience is probably one of the most critical items when it comes to property management – a service business. Protea’s area supervisors for shopping centers, offices, industrial properties, apartment communities and associations have extensive experience in the field. Hint: Don’t get taken in by claims of “combined experience of 40 years.” What does that mean – one employee with 40 years of experience or 40 employees with 1 year of experience each? Find out how much experience the person handling your property has.
Is this experience limited in any way, depending on the size or grade of property?
Here, we want them to go into more detail about their experience and whether it is similar to the property you own. Protea’s experience is with just about every type of property.
Leases for shopping centers, office and industrial properties are often sophisticated and complicated, how do I know that your staff will be able to properly understand and interpret them?
Obviously, you don’t want a management company that can’t follow the contracts you have in place with your tenants. It is fair to say that Protea has dealt with every type of lease provision, and so this presents no problem for us.
How is your management fee calculated?
While I don’t recommend you select a management company based solely on the fee it charges, you do want to make sure the fee is competitive and in line with the way fees are calculated for your type of property. Protea charges by a percentage of the property’s revenue, and with Associations by reference to the number of its units.
Who will supervise my property on a day to day basis?
Will one person be responsible or several? Who will make the decisions on a day to day basis and in an emergency if you cannot be located? Protea Real Estate employs a number of competent supervisors and one of them will be assigned to your property for daily operations.
What sort of financial statements do you provide?
Will you receive regular, intelligible reports telling you what is going on with your property? With Protea, you will receive a monthly financial package, and this will include as much or as little back up as you want to see. Some clients prefer to just receive a Balance Sheet and Profit and Loss Statement, others require the full package, which can run to 100 pages.
What software does your Company use?
Does the management company use an industry standard accounting package or some modified general accounting package? Protea Real Estate uses Skyline as its accounting software, an industry leader in property management software. You can find out more about Skyline at http://www.ssctech.com/product.asp?P=25.
One-Site software is used for multi-family properties and Protea uses the latest state of the art software package for Associations.
What sort of accounting department do you have?
You need to know the size of the accounting department, how it is divided up, and the experience level of the accountants. Protea employs a Controller, and we have a payables department, a receivables department and a human resources department. Our employees in these departments have numerous years of experience.
Would you insure my property if I want you to?
By having the management company insure your property, you can take advantage of its ability to pool multiple units and owners together, thereby lowering your insurance rates and saving you money – in fact, the insurance savings can possibly offset a some of the management fees. Protea Real Estate has Master Policies which could include your property and possibly save you money through lower premium costs.
How would you handle the property taxes on my property if my property is assessed too high?
Can and will the property management company go to bat for you with the Tax District if you need it? This is part of Protea’s expertise and we have had extensive experience in the field. We use property tax consultants, but instruct and assist them every inch of the way. We have attorneys who will handle appeals against assessments on your property on a contingency basis (meaning you don’t pay them unless they reduce the taxes).
What do you do to keep expenses down and increase revenue?
Try to find out what measures they take to reduce property expenses and increase property revenue. Protea has a track record of trying harder, using common sense and most of all, paying close attention to all the details all the time. No wonder so many of our clients rave about our work.
Will you lease my property for me?
If you don’t want to handle the leasing aspect yourself, can your management company provide assistance with the leasing process? Protea’s management includes the leasing of apartment communities, for all other properties we will recommend the best leasing agents available for your property, and work closely with them. Leasing commercial property is a discipline separate from management, and you will be better served using agents whose sole focus is getting your property leased.
Can you give me references on your company?
Never hire any management company without checking its references.
Will you perform a due diligence on a property I am thinking of buying, and what would you charge?
If the management company does due diligence, it tells you it has experience with evaluating property values. That means they can help you buy and sell properties, know the going market rates for leases, and have more experience than simple management companies. Protea does these all the time and will be glad to assist you in this regard. Our charges are competitive.
What about renovating and rehabilitation of my property?
If your property is not new, chances are it will need renovation over time. Having a management company that can assist or supervise the renovation will save you tremendous time and effort. Protea has handled countless numbers of these over the years, and our supervisors will oversee these projects every step of the way.
What about insurance claims?
If something goes wrong, do you have to make the claim with the insurance company or will the management company handle it for you? Again, Protea has handled claims of all sorts, including hail, fire, wind, arson and accidents.
Will I be able to speak to the same person at your company?
You want one point of contact you can reach in an emergency – not a maze to navigate. Protea assigns one person to be your contact point.
Can you help me raise equity money for acquisitions and/or developments?
If you need to raise money, where can you go? Will the management company assist you or will you be on your own? In most cases, Protea can help.
Could you handle a development for me, from scratch?
A management company that can help with development will not only provide you with additional resources, but it will have a better understanding and capability to manage new properties, be up to date on the latest construction materials and building techniques, and offer more experience on the management side as well. Protea can help handle development and its principals and associates have themselves developed and are developing retail centers and apartment complexes.
How is your company different from other management companies?
We take a special interest in every aspect of your investment, and dedicate ourselves to providing the best customer service available in the industry. We are personable, and are dedicated to ensuring that your property is well managed in every aspect.
I hope this report will be a great benefit and assist you to find the right management company for you and your property.
Should you have any questions, please feel free to contact Protea Real Estate at (972) 248-6065 or email via the contact form.