So, you’ve decided to hire a property manager…
That’s a VERY smart decision!
Whether you’re a busy professional who owns retail properties as an investment, a seasoned investor looking to scale back your involvement, or a beneficiary who has recently inherited a shopping center, the benefits of professional property management are many.
From specialized accounting to maintenance and property vendor oversight, to tenant relations management – hiring a property management firm takes a tremendous burden off your shoulders.
But before you make your selection, it’s important to carefully vet potential service providers. After all, you’re placing your faith in this third party, trusting they will take good care of your very valuable asset.
As such, it’s a good idea to meet, ideally, a face-to-face sit down, with prospective management firms and ask pointed questions to ensure you understand the breadth and depth of the services.
This exercise will educate you on how the firm operates. It also gives you an understanding why the firm has established its current methodologies. And it provides you with a clearer picture of exactly what you’re paying for.
Toward that end, here are 20 questions to ask when interviewing a prospective retail property management firm:
1. How long has your firm been in business?
This will give you a sense of the company’s stability. The longer a firm has been in business, the more consistent they’re likely to be in the long term. And given the effort involved in establishing management, it’s in your best interest to cultivate a long-running relationship.
2. How many properties do you manage?
This will demonstrate the size of the company. The more accounts the firm manages, the better established they’re likely to be.
3. How many property managers do you employ?
This figure, combined the number of accounts under management, answers several questions. First, a firm that’s handling many accounts, but only employs a few managers likely indicates your property will receive less attention.
Additionally, it’s important to confirm that if your property manager goes on vacation or otherwise takes leave, another manager will be available to step in and oversee your property during your manager’s absence.
4. Do you have a dedicated accounting department?
Thorough financial oversight is critical to effective property management. And a dedicated accounting department ensures close attention to detail, giving you the confidence your property’s financials are handled in a professional and timely manner.
5. What financial reports do you provide?
Monthly reporting lets you know what to expect in terms of month-to-month financials. It also helps keep abreast of your property’s financial position. And when it comes to year-end accounting, your CPA will need these reports to prepare your taxes.
6. When can I expect monthly financial reports?
This gives you an idea of the management company’s monthly cycle and lets you know when to expect updates.
7. Do you prepare an annual budget?
An annual budget serves a guidebook for your property. Planning things out in advance gives you a clearer picture of what to expect in the coming year. And enables you to budget according. It also helps establish CAM rates for the property.
8. Do monthly reports include a narrative review and photos of the property?
While tracking property financials is critical, keeping tabs on your property’s condition and tenant relations is equally as important. A narrative report with photos that documents potential maintenance issues and repair needs, in addition, logging tenant concerns ensures you’re up-to-date on all facets of your property.
9. How often do managers visit each property?
Site visitation a very important aspect of property management. When onsite, managers take note of maintenance and overall property condition, verifying vendors are fulfilling their duties and identifying any potential physical hazards. Visitation also impacts tenant relations, enabling the manager and tenants to develop a rapport.
10. Are properties under management divided up by area and size?
A management company may cover a wide geographical area. And some properties are bound to be larger than others. Ideally, you would prefer a manager who already handles other properties close to your location. And isn’t already overburdened overseeing too many other large properties.
11. How are after hours + weekend emergencies handled?
Many retail properties operate 7-days a week. And often clock 12+ hour days, if not even longer. If there’s an issue at your property that falls outside the Monday-thru-Friday, 9-5 workday, who is responsible? You want to be assured someone is “on-call” in case of an emergency.
12. Do managers review vendor contracts to ensure services are competitively priced?
Property vendor services can vary wildly in terms of price and quality. Your property manager should periodically bid vendor contracts to ensure both competitive pricing and quality service.
13. Can tenants pay rent + CAMs online?
With the growing popularity of ACH payments and the proliferation of online bill pay services, the demand election payment options for is rising. Not only is this approach more convenient and efficient, but rent + CAMs are also received in a timelier manner. Additionally, employing this technology indicates the management company is forward-thinking and striving to take advantage of the latest technology to streamline its business processes.
14. Can vendors submit invoices and be paid online?
Like online bill pay tools for rent and CAM, there are also services that automate vendor invoicing and payment dispersal. Typically, vendors submit paper invoices, the management company inputs those invoices into their property management software system, and then prepares and mails checks.
With an automated bill pay service, vendors electronically submit invoices that are automatically recorded into the management company’s financial database. Electronic payments are then sent directly vendors bank accounts, like ACH payments.
This eliminates postage costs, payments being lost in the mail, and avoids bank fees for lost check cancellations.
15. What services do you provide in addition to basic property management?
Retail properties have a variety of needs beyond just financial tracking, maintenance oversight, and tenant relations.
As a shopping center landlord, you may need assistance overseeing property upgrades, remodels, and tenant improvement projects; handling lease renewals; and lowering property tax assessments, among other things.
But not every firm offers these services. And some that do charge additional fees. It’s important to clarify the breadth of a management company’s services and the “added costs” costs (if any) involved. This knowledge gives you a basis to compare different management companies based on pricing and options.
16. Can you refer additional services, like property vendors, contractors, attorneys, etc?
Replacing under-performing or overpriced vendors, bringing in contractors to handle repairs or remodels, and hiring attorneys to defend lawsuits are all potential concerns for shopping center landlords. A management company that can not only refer these sort services but maintains strong relationships with such vendors is a boon to retail property landlords.
17. How do you charge for property management services?
Are fees based on a flat charge or a percentage of monthly gross rents? It’s important to understand how fees are calculated because vacancy may impact your monthly costs. If your tenants are on triple net leases, and you’re billing back tenants for management fees, will you be expected to make up the difference for a vacant unit?
18. How would you rate your level of customer service?
Whether dealing with tenants or vendors, respectful and attentive customer service is critical to fostering productive relationships. Tenants want to know their concerns are being heard and acknowledging their voice is crucial to keeping them happy and hopefully in place for long into the future. Treating vendors with respect is paramount to ensure they consistently deliver quality service.
19. How do you handle tenant disputes?
Tenants often complain about property conditions, the actions of other tenants, and CAM fees. Additionally, tenants frequently claim they can’t afford to pay their rent. In some cases, they’re facing a legitimate hardship. In others, their “financial hardship” claims are a ploy to secure a rent reduction. While it’s important to acknowledge tenant concerns, it’s also the management company’s duty to serve the landlord’s interests. Ultimately, you want a management company that exercises a firm, but fair hand.
20. Can I keep my current bank account?
For a variety of reasons, it may be advantageous for you to continue to use the bank through which your property financials are currently being processed. In some cases, the lender financing your property loan may require you to use their bank. Conversely, some management process property financials exclusively through their own preferred bank. If your property needs to remain with a specific bank, this important information to clarify upfront.
Interested in Meeting With CBM to Discuss Property Management For Your Retail Shopping Center?
Get in touch with Rick Rivera, CBM President, to schedule a meeting: 310.575.1517 Ext. 201 | email@example.com