Posted by sptk on August 22, 2004 at 10:16:15:
I’ve never used a contract for a property manager. I’ve done property management as a landlord. Your biggest challenge is filling rental vacancies. What I call rental turns. You have to document damage from the previous tenant, get any money not covered by the security deposit or sue them in small claims court. Fix up the property. Don’t kid yourself that the security deposit will cover this. The tenants will scream that all their damage is “normal wear and tear”. Normal wear and tear for pet owners is quite a bit. Of course, the new tenant wants everything to look like a suite at the Hilton. So you are going to be having repair and advertising expenses when no money is coming in. How is the mortgage (and other bills) going to be paid when their is no rent? This is your credit rating at risk. A rental may be profitable if tenants stay for 2 years and it only takes a week to turn the rental. A rental may be a disaster if it only stays rented for 6 months and is empty for 6 weeks every turn. Does the property manager take the first warm body with a checkbook or wait for a really good tenant? A tough decision. Any idiot can deposit rent checks for 10% of the rents. The test comes at rental turns. I would go over this very carefully with your property manager so there are no surprises at vacancy time.