Do you own a rental property and want to hire a professional property manager to make your life easier as a landlord? From collecting rent to handling unpaid rent, finding tenants and following up on repairs, property management takes time, rigor and a good understanding of the obligations that come with renting out real estate.
To avoid unpleasant surprises, it is important not to choose your property manager at random. Whether you go with a real estate agency or an independent professional, it is essential to check certain criteria before signing a management agreement. Choosing your property manager: here are the 5 key criteria to check before you sign.
Key takeaways
Before signing a property management agreement, here are the 5 essential criteria to check to choose the right property manager:
- the property manager’s professional qualifications and guarantees, in particular their professional card, insurance and experience;
- the fees and management costs, by comparing the total annual cost and any additional fees;
- the services included in the agreement, such as finding tenants, collecting rent and overseeing repairs;
- the property manager’s responsiveness and transparency, by assessing the quality of communication, response times and the regularity of reports;
- the agreement’s clauses and termination conditions, in particular the term, notice period, the manager’s powers and any additional guarantees.
1. Check the Property Manager’s Qualifications and Guarantees
To choose your property manager, the first criterion to check concerns the professional’s qualifications and guarantees. As a landlord, you entrust the manager with a significant part of the management of your property. They must therefore be able to keep rigorous administrative records, manage relationships with tenants and support you when difficulties arise.
Naturally, a property manager can offer different services, from simply finding a tenant to full management of the property. However, a name or reputation alone does not guarantee the quality of their services. To make sure of their expertise, it is essential to check their qualifications, their experience and the guarantees they hold.
In France, property management is a regulated activity. So, before signing a management agreement, make sure the manager holds the required authorizations. The main items to check are:
- the professional card for property management, generally called the “carte G” and issued by the Chamber of Commerce and Industry (CCI);
- the professional liability insurance, which covers certain consequences of mistakes or faults made in the course of business;
- the financial guarantee, where required, particularly when the professional holds funds on behalf of clients;
- the experience in property management, especially for the type of housing involved, such as an unfurnished apartment, a furnished rental, a shared rental or a rental investment.
These checks are an essential first step in choosing a property manager. However, they do not replace an assessment of the quality of the service.
To better gauge the manager’s skills, it is also recommended to take the time to read customer reviews and ask for concrete examples of situations they have handled. A property manager used to handling furnished rentals does not necessarily have the same experience as a professional who specializes in managing entire buildings.
2. Compare Property Management Fees and Costs
As with choosing any other service, fees and management costs are the second decisive criterion to check before signing with a property manager. Choosing a professional who offers cheaper rates is not always the best solution. For example, reduced fees may correspond to limited services or to additional fees billed separately.
To compare the fees and costs of a real estate agency and an independent manager, it is best to ask for a detailed fee schedule. Then check the rate applied, the basis of calculation and any additional fees.
Without going through all the [management fees and costs] in France, note that fees for day-to-day property management are freely set by managers. In addition, the costs of finding a tenant follow separate rules, particularly regarding caps and the sharing of certain services billed to the tenant.
The best way to find a manager’s fair price is therefore to compare the total annual cost of property management, and not just the advertised percentage.
3. Review the Services Provided in the Management Agreement
Not all property managers offer the same level of support. Some handle all of the steps involved in renting, while others only handle certain administrative or financial aspects.
The [property management agreement] is the central document in the relationship between landlord and property manager. It sets out the tasks entrusted to the professional, the limits of their powers and the conditions under which they may act on the landlord’s behalf.
Before signing a management agreement with a manager, it is advisable to check whether the following services are included:
- finding tenants, including writing and posting listings, scheduling showings and reviewing tenant applications;
- administrative management, specifically preparing the lease, tracking deadlines, issuing rent receipts and reconciling service charges;
- financial follow-up, such as collecting rent, sending reminders for late payments and providing account statements;
- technical management, including arranging repairs, dealing with contractors and following up on work;
- incident management, such as handling complaints, following up on certain claims and providing support in the event of unpaid rent.
It is important to understand that signing a management agreement does not automatically transfer all of the landlord’s obligations to the real estate agency or property manager. Repair and renovation costs generally remain the landlord’s responsibility, and some decisions require their prior approval.
4. Assess the Property Manager’s Responsiveness and Transparency
The success of a property management agreement generally depends on the quality of communication between the landlord and the property manager. Even when you delegate the daily tasks involved in managing your property, you must be able to follow what is happening with your home and understand the decisions made on your behalf.
Choosing a good property manager is not just about finding a professional to collect your rent. It is important to choose someone who can inform you of important events, alert you when problems arise and support you in decisions that may affect your property’s profitability.
So, in your first conversations before signing with a property manager, it is essential to see how the professional answers your questions. Are their explanations clear? Do they state their turnaround times? Are their fees and responsibilities presented without ambiguity?
In this respect, several criteria can help you evaluate the property manager. In particular, check whether:
- the manager is an identified point of contact with clear contact details and office hours;
- the professional provides regular reports showing rent collected, expenses incurred and any late payments;
- the manager meets the stated response times, particularly for routine requests and emergencies;
- the professional offers documented follow-up of repair work, including quotes, invoices and service reports.
What’s more, checking customer reviews can complement this analysis. However, do not limit yourself to the overall rating. Look at the comments about the manager’s availability, how disputes are handled and how documents are shared.
5. Check the Agreement’s Clauses and Termination Conditions
The fifth criterion to check when choosing a property manager before signing concerns the contractual terms of the management agreement. Even if the rates suit you and the services seem right, it is not advisable to sign a management agreement without carefully reviewing its clauses.
To do so, pay particular attention to the following:
- the term of the agreement, in particular the start date, the planned duration and the renewal terms;
- the termination conditions, in particular the notice period, the formalities to follow and any applicable fees;
- the manager’s powers, checking clearly which decisions they can make on their own, particularly for repairs and routine expenses;
- the accounting and reporting, checking how often statements are provided and how supporting documents are sent;
- the additional guarantees, checking whether unpaid rent insurance is offered and reviewing coverage limits, deductibles and exclusions.
What’s more, before signing a management agreement, also check how the tenant file, rent receipts, move-in inspection reports and repair documentation will be handed over. If you have any doubt about a clause, it is advisable to ask for a written explanation before signing. In France, your local housing information agency (ADIL) can also give you information on the rules that apply to your situation.
Conclusion
Choosing your property manager takes a little preparation, but it can save you many difficulties. Before signing, it is important to check 5 essential criteria: the property manager’s professional qualifications, the management fees and costs, the services included in the management agreement, the quality of follow-up and the terms of the agreement.