Questions to Ask a Property Management Company Before Hiring One

Owning commercial property comes with significant responsibility. As the proprietor, your day-to-day and month-to-month obligations can range from making small repairs to managing cash flow and finances. Even if you only have one property, you may already be strained with all the tasks required to keep a property running and generating revenue. Then if you decide to scale your business with further properties, you may find that keeping everything running smoothly becomes increasingly taxing.

In this regard, it makes financial and strategic sense to turn to the services of one of the top property management companies in South Florida. This will liberate you from the everyday running of the venture while also providing you with resources that will help you maximize the business.

What is Property Management?

Property management is the process of overseeing, operating, and administering real estate properties on behalf of the owner. The property manager’s job is to make sure the property runs smoothly, keep tenants happy, and ultimately have the business perform well financially.

What is a Property Management Company?

A property management company is a professional firm or organization that provides property management services to owners who are often referred to as the landlord. These firms typically employ experienced property managers who handle various aspects of property management mentioned above. Essentially, the company acts as an intermediary between owners and tenants.

There are two main types of property management:

• Commercial property management: This type of property management deals with overseeing office buildings, retail spaces, warehouses, and other income-generating commercial properties. Here, the focus is usually on tenant relations specific to commercial needs, lease negotiations with businesses, and maintaining common areas for multiple tenants.
• Residential property management: On the other hand, residential property management focuses on managing rental homes, apartments, condos, and similar properties for tenants. The main responsibilities include tenant screening, lease agreements, rent collection, maintenance coordination, and ensuring resident satisfaction.

Commercial and residential real estate differ significantly in scale and complexity, and it is usually the case that the duties of a commercial property manager are more intricate than those of a residential property manager.

In addition to tenant relations and property maintenance, commercial property managers have to consider business-specific needs. This includes tasks like overseeing the design of office layouts to suit the needs of different types of businesses, ensuring that the technology infrastructure meets the demands of modern businesses, and providing amenities that support the operations of the companies leasing the space. They’ll also have to handle tasks like complicated lease negotiations, risk management, and regulatory compliance.

When Should I Hire a Property Manager?

Provided that your property is zoned as a commercial asset and you have complex operational needs, then there’s good reason to entrust some of the heavy lifting, management-wise, to a professional. These factors can also signal that you’re ready to hire a property management company:

1. You have limited time or expertise. If you lack the time or knowledge to effectively manage your commercial properties, then it’s a good time to leave some of the operations to a team who does know how to run your property smoothly.

2. You’re handling more than one property. Managing multiple properties can be overwhelming. This is especially true if your properties are located in different neighborhoods, or require special attention.

3. There’s a significant geographical distance. If you live far away from your properties or own several in different cities, hiring a local property manager can provide peace of mind and ensure effective management in your absence.

4. Tenant turnover rates are increasing. High tenant turnover, or difficulty in finding reliable tenants, may necessitate the help of a property manager who can take care of tasks like tenant screening and lease management. In Florida, where the economy is heavily tied to tourism, seasonality tends to lead to higher turnover rates at certain times. This can affect the retail and hospitality sectors during off-peak seasons. That said, the top property management companies in South Florida are typically prepared for this and have strategies to maximize vacancy throughout the year.

5. Maintenance and repairs have started to become overwhelming. If property maintenance and repairs are becoming burdensome, or if you lack reliable contractors and service providers, a property manager can oversee maintenance activities and coordinate timely repairs. Their connections to a network of professionals in various industries could prove invaluable.

6. Difficulty with the legal aspects of commercial real estate. For those new to commercial real estate, understanding the intricacies of state legislation and local regulations for commercial property owners can be challenging. A property manager can navigate legal complexities to so that your residential properties remain compliant with local commercial property laws.

Questions to Ask a Property Management Company

When interviewing potential property managers, knowing which questions to ask will help you narrow down your options and quickly identify the right company for you.

Experience and track record:

• What type of properties do you manage?

  Different commercial properties have different needs, so it’s best to hire a property management company that can provide someone who has in-depth knowledge and experience in handling the kind of space you own, whether it’s a warehouse or a retail space.

• How many years of experience do you have managing commercial properties?

  Experience is a critical factor in effective property management, so make sure to inquire about their background and credentials. You want someone with years of experience, not just months. A positive and successful track record is a strong indicator that they provide quality service to clients.

• Can you give me a few references?

  Don’t be afraid to ask a property management company for references. Reputable firms typically welcome such inquiries and readily provide contact information and testimonials from previous clients, since they are a valuable tool in building trust with new customers.

Services and processes:

• What type of services do you offer?

  Make sure you clarify their services upfront to avoid misunderstandings and frustration down the line. Being on the same page from the beginning will help establish the company’s role and responsibilities — and yours too. Do they handle tenant acquisition, rent collection, property maintenance, and legal compliance? Asking these questions from the beginning will save time and money.

• What parts of Florida do you cover?

  Some property managers might take on properties that aren’t necessarily the most accessible for them, and while they may still do a good job, you’ll want to hire someone who can get to your property as quickly as possible in case of an emergency.

• How often do you do inspections?

  Regular inspections are vital for identifying maintenance issues and ensuring tenant compliance. Knowing the inspection schedule will offer you peace of mind regarding your property’s condition.

• What kind of involvement do I have as an owner?

  This allows you to determine how hands-on or hands-off you want to be in the management of your property. Whether you prefer to be involved in decision-making processes or delegate tasks entirely to the property manager, clarity on your role prevents misunderstandings.

Tenant management and lease administration:

• What does your tenant screening process look like?

  One of the most frustrating landlord experiences is having difficult or outright damaging tenants. Asking this question will help you gauge a property manager’s diligence in selecting quality tenants.

  A thorough screening process typically involves background checks, credit checks, employment verification, and rental history verification. These checks usually allow property managers to assess the financial stability of prospective tenants, minimizing the risk of late payments or property damage.

• What’s your action plan for tenants who don’t pay rent on time?

  This is one of the most common issues a property manager will face. It’s crucial to know if they have set procedures for addressing late payments, issuing notices, implementing penalties, and initiating eviction proceedings if necessary.

• What happens when the tenant moves out?

  Tenants moving out is a normal part of renting out a property. But how the whole moving out process is managed can make a big difference to your business’ bottom line.

  Usually, a reputable property manager will conduct a thorough inspection after the tenant leaves to make sure everything’s in good shape. Then, they’ll sort out the return of the security deposit, handle any necessary repairs or cleaning, and get the place ready for new tenants.

  In a similar vein, you may ask questions about lease administration such as:

  • What procedures do you have in place for lease enforcement?
  • How do you handle lease documentation and record-keeping? What technology do you use?

Company specifics:

• How big is your team? How many rental properties do you manage?

  Asking about team size and the number of properties managed gives insight into the level of attention your property will receive, and whether the company has the bandwidth to manage it effectively. A good staff-to-property ratio is the balance that will provide quality service to your property’s needs.

• What type of license do you carry?

  Florida requires a real estate broker’s license for any professional who engages in real estate activities, and this extends to property management, so check that the property manager is fully licensed.

  Finally, it’s important to have a clear understanding of the payments and fees. Even though they may already be written in the contract, be sure to ask:

  • What do you charge for management and leasing, and are there other fees?
  • Are there any fees for pulling out of the contract?

  Asking verbally at the initial consultation will clarify if you are willing to progress further with the partnership or whether you’d rather look for another property manager.

What to Expect from a Reputable Property Management Company

When you hand over the reins of your commercial space to a property management company, you’re hiring a trusted partner to take care of your business’ nitty-gritty details. Here’s what you can expect from a trustworthy company, and how you know you’ve hired the right people:

• They keep tenants happy. A reliable property management company has a solid grasp on maintaining tenant satisfaction. They promptly address concerns, minimize conflict, and most of all, are proactive in identifying issues before they escalate (ie. anticipating seasonal maintenance needs, and staying ahead of minor cosmetic issues before they turn into bigger problems). For the owner, tenant satisfaction often translates into increased occupancy and reduced tenant turnover, positively impacting your bottom line.
• They’re financially responsible and transparent. This gives full access to information about what money is coming in and what expenditures are going out.
• They have an established network of sub-contractors. Whether it’s for routine maintenance tasks, repairs, or renovations, having access to a reliable network of professionals means that issues can be addressed promptly and effectively. Leveraging this network can often result in cost savings for the owner, as property management companies can negotiate favorable rates with their preferred vendors.
• They’re strategic and focus on long-term growth. Strategic planning helps maximize property value, increase rental income, and mitigate risks, ultimately enhancing the overall return on investment for property owners.
• They’re technology-forward. Property management software is an integral part of the job, both for residential and commercial spaces. Familiarity and skill in using these systems demonstrate that the company is always looking for ways to improve its service.

Why Choose DeMarco Real Estate Group

DeMarco Real Estate Group offers top property management services for all types of properties, including retail, multi-family, industrial, manufacturing, assisted living, land, development lots, and hospitality spaces.

Founded by John DeMarco, a real estate professional since 2005 and long-time resident of South Florida, the DeMarco Real Estate Group provides local expertise stemming from decades of experience. They have connections and experience within the South Florida community that you need. From 2017 through 2022, the team has ranked #1 in the United States for commercial real estate sales within RE/MAX, making them one of the top property management companies in South Florida.

The team has a comprehensive array of property management services, including:

• Lease administration
• Collections
• Maintenance
• Financial reporting and services
• Tenant retention
• Construction supervision and city services

Grow Your Commercial Property Business with the DeMarco Group

At The DeMarco Real Estate Group, we don’t just work hard; we aim for excellence. Our team is highly professional, well-versed in the intricacies of commercial real estate, and dedicated to ensuring client satisfaction. We deliver top-quality management services that maximize your income while prioritizing tenant retention.

Let us help you grow your South Florida business – entrust your property management to DeMarco Real Estate Group. Call us today at 954.453.1000 or send us an email.