How to Choose the Right Property Management Company: Essential Tips and Red Flags

How to Choose the Right Property Management Company: Essential Tips and Red Flags

Choosing the right property management company is a crucial decision for any property owner. 

Whether you’re a first-time landlord or a seasoned investor, finding a reliable partner to handle the day-to-day operations of your rental property can make a world of difference. 

This guide will walk you through the essential tips and red flags to watch out for when selecting a property management company.

Essential Tips for Choosing a Property Management Company

Understand Their Services

A good property management company will offer a comprehensive range of services. 

Look for companies that provide:

  • Tenant Screening and Selection: This involves advertising the property, conducting showings, screening applicants, and signing lease agreements.
  • Rent Collection: Ensuring timely rent payments, managing late fees, and providing financial reporting.
  • Property Maintenance and Repairs: Routine maintenance, emergency repairs, and regular inspections.
  • Handling Tenant Complaints and Emergencies: 24/7 availability to handle tenant issues.
  • Regular Property Inspections: Ensuring the property is well-maintained and tenants are complying with lease terms.
  • Financial Reporting: Monthly and yearly financial statements, handling tax documents, and ensuring transparency in finances.

Tip: Ask for a detailed list of services during your initial meeting to ensure they cover everything you need.

Check Their Reputation

Reputation matters. Do some research to find out what other property owners think of the company. 

Here are a few ways to check their reputation:

  • Online Reviews: Look at reviews on Google, Yelp, and other review sites. Pay attention to both the number of reviews and the overall rating.
  • References: Ask the company for references and speak directly to current or past clients. Inquire about their experiences and satisfaction with the company’s services.
  • Industry Certifications: Check if they are members of professional organisations like the National Association of Residential Property Managers (NARPM). Membership in such organisations often requires adherence to professional standards and ongoing education.

Example: Jane, a property owner, chose ABC Property Management because of their excellent online reviews and a strong recommendation from a fellow landlord. 

She appreciated their transparency and the thorough tenant screening process they described during the initial meeting.

Ask About Fees

Property management fees can vary widely. 

Ensure you understand the fee structure:

  • Management Fees: Typically a percentage of the monthly rent, ranging from 8% to 12%.
  • Leasing Fees: Charged for finding and placing a new tenant, usually one month’s rent or a portion of it.
  • Maintenance Fees: Fees for handling repairs and maintenance. Some companies charge a markup on repair costs.
  • Miscellaneous Fees: Ask about any additional charges that might come up, such as fees for advertising, eviction processes, or inspection reports.

Tip: Be wary of companies that are not transparent about their fees or that have a lot of hidden charges. Always ask for a detailed breakdown of all potential costs.

Example: John was surprised by hidden fees from a previous property management company. Now, he makes sure to get a clear understanding of all potential charges upfront to avoid any unpleasant surprises.

Evaluate Their Tenant Screening Process

A thorough tenant screening process is essential to ensure reliable and responsible tenants. Ask about their screening criteria, which should include:

  • Credit Checks: Assessing the financial responsibility of applicants.
  • Employment and Income Verification: Ensuring tenants have a stable income to cover rent.
  • Rental History: Checking references from previous landlords.
  • Background Checks: Looking into criminal history and past evictions.

Tip: A detailed screening process reduces the risk of problematic tenants and helps ensure a smooth rental experience.

Example: Susan appreciated that XYZ Property Management conducted comprehensive background checks, which gave her peace of mind knowing that her tenants were thoroughly vetted.

5. Understand Their Communication Style

Effective communication is key to a successful partnership. Ensure the property management company is responsive and easy to reach. Ask about their preferred methods of communication and how they handle emergencies.

  • Availability: Are they available 24/7 for emergencies?
  • Response Time: How quickly do they respond to emails, calls, or messages?
  • Communication Methods: Do they prefer phone calls, emails, or a property management portal?

Tip: Choose a company that offers a 24/7 emergency hotline for tenant issues.

Example: Mark chose a property management company that provided a dedicated property manager for his account. This ensured consistent communication and quick resolution of any issues.

6. Visit Their Office

A visit to the property management company’s office can provide insight into their professionalism and organization. Look for:

  • Office Cleanliness and Organization: A well-maintained office can indicate a well-run business.
  • Staff Professionalism: How the staff interacts with clients and each other.
  • Technology and Systems: Modern property management software can enhance efficiency and transparency.

Example: During her office visit, Lisa noticed that the property management company used advanced software for tracking maintenance requests and tenant communications, which reassured her about their organisational capabilities.

7. Ask About Their Marketing Strategy

Effective marketing is crucial for minimising vacancy periods. Ask how the company advertises properties and fills vacancies. This should include:

  • Online Listings: Use of popular rental websites and social media.
  • Photography and Descriptions: High-quality photos and detailed property descriptions.
  • Signage: Placing signs in front of the property.

Tip: A proactive marketing strategy can significantly reduce the time your property sits vacant.

Example: Emma was impressed by the professional photos and virtual tours that ABC Property Management included in their marketing strategy, which helped attract quality tenants quickly.

Understand Their Maintenance and Repair Process

Regular maintenance and timely repairs are essential for tenant satisfaction and property preservation. 

Ask about:

  • Maintenance Request Procedures: How tenants submit requests and how quickly they are addressed.
  • Preferred Vendors: Whether they have a network of trusted contractors and vendors.
  • Cost Management: How they control repair costs and avoid unnecessary expenses.

Tip: Ensure the company has a reliable system for handling maintenance requests efficiently.

Example: David appreciated that his property management company had a dedicated maintenance team and an online portal where tenants could easily submit requests.

Review Their Lease Agreement

The lease agreement is a critical document that outlines the terms of the rental. 

Review their standard lease agreement to ensure it includes:

  • Clear Terms and Conditions: Regarding rent payments, late fees, and lease duration.
  • Tenant Responsibilities: For maintaining the property and reporting issues.
  • Landlord Rights: Regarding property access, inspections, and lease enforcement.

Tip: A well-drafted lease agreement helps prevent disputes and ensures both parties understand their responsibilities.

Example: Sarah’s property management company had a comprehensive lease agreement that covered all potential issues, providing her with confidence and security.

Check Their Track Record with Tenant Retention

High tenant turnover can be costly and time-consuming. Ask about their strategies for retaining tenants, which might include:

  • Responsive Maintenance: Quickly addressing maintenance issues.
  • Tenant Relations: Building positive relationships with tenants.
  • Lease Renewal Incentives: Offering incentives for lease renewals, such as minor upgrades or rent discounts.

Tip: A company with a good tenant retention rate likely has satisfied tenants and well-maintained properties.

Example: Michael chose a property management company known for its excellent tenant retention rate, which saved him the hassle and cost of frequently finding new tenants.

Red Flags to Watch Out For

How to Choose the Right Property Management Company

While looking for the right property management company, be on the lookout for these red flags:

Lack of Transparency

If a company is vague about their fees, services, or tenant screening process, this is a major red flag. 

Transparency is crucial for trust and effective management.

Example: Jennifer encountered a property management company that was unwilling to provide detailed information about their fees and services, raising concerns about their honesty and reliability.

Poor Communication

If a company is slow to respond to your inquiries or seems disorganised, consider it a warning sign. 

Good communication is essential in property management.

Example: Tom struggled with a property management company that frequently missed calls and took days to respond to emails, leading to unresolved tenant issues and frustration.

High Tenant Turnover

A high turnover rate can indicate poor property management. Ask about their tenant retention rate and what steps they take to keep tenants happy.

Example: Rachel discovered that a potential property management company had a high turnover rate, which was a red flag that they might not be effectively managing tenant relationships.

Negative Reviews and Poor References

While a few negative reviews are normal, consistently poor feedback is a red flag. 

Pay attention to common themes in reviews and ask for references to speak directly with their clients.

Example: Daniel noticed several reviews mentioning the same issues, such as poor communication and unresolved maintenance problems, which made him reconsider hiring that company.

Lack of Professionalism

Unprofessional behaviour, such as missed appointments, lack of follow-through, or unkempt office spaces, can be indicative of how they will manage your property.

Example: Maria was put off by a property management company’s disorganised office and staff who seemed uninterested in her questions, leading her to seek a more professional alternative.

Additional Tips for Success

Get Everything in Writing

Ensure all agreements and expectations are documented in writing. 

This includes service agreements, fee structures, and any specific terms you negotiate.

Tip: Written agreements provide a clear reference and help prevent misunderstandings.

Schedule Regular Check-Ins

Set up regular meetings or calls with your property management company to review performance, address any concerns, and discuss potential improvements.

Tip: Regular check-ins foster a proactive approach to property management and keep lines of communication open.

Stay Informed About Local Laws

Property management involves complying with local, state, and federal laws. 

Ensure your property management company is knowledgeable about relevant regulations and stays up-to-date with any changes.

Tip: Staying informed about legal requirements helps prevent potential legal issues and ensures your property is managed within the law.

Example: Alex’s property management company provided regular updates on changes in local rental laws, ensuring his property remained compliant.

Utilise Technology

Modern property management companies often use technology to enhance their services. This can include online portals for tenants and owners, digital payment systems, and automated reporting.

Tip: Technology can streamline processes and improve transparency and efficiency.

Example: Emily’s property management company used an online portal that allowed her to track rental payments, maintenance requests, and financial reports in real-time.

Foster a Good Relationship with Your Property Manager

Building a positive relationship with your property manager can lead to better communication and a more effective partnership. 

Treat your property manager with respect and appreciation for their work.

Tip: A good working relationship can lead to more personalised and attentive service.

Example: Paul made an effort to establish a friendly and respectful relationship with his property manager, which resulted in excellent service and quick resolution of any issues.


Choosing the right property management company is a critical decision that can significantly impact your experience as a property owner. 

By understanding their services, checking their reputation, asking about fees, evaluating their tenant screening process, and assessing their communication style, you can make an informed decision that aligns with your needs and expectations.

Remember to watch for red flags such as lack of transparency, poor communication, high tenant turnover, negative reviews, and lack of professionalism. 

Taking these precautions can help you avoid potential pitfalls and ensure a positive and productive partnership with your property management company.

By following these tips and maintaining a proactive approach, you can find a property management company that will effectively manage your property, keep tenants satisfied, and ultimately contribute to the success of your investment. 

Your due diligence and careful selection will pay off in the long run, providing you with peace of mind and a well-maintained property.

Have you had any experiences with property management companies? What tips would you add to this list? Share your thoughts in the comments below and feel free to share this guide with fellow property owners!


How do I find a reputable local property management company?

Look for companies with deep roots and experience in your local market. They should have extensive knowledge of relevant landlord-tenant laws and connections with trusted vendors. 

Check online reviews, ask for referrals from other landlords, and verify they are licensed and have no complaints with the Better Business Bureau.

Red flag: A company without strong local expertise may struggle to effectively market your property, screen tenants, or handle legal issues.

What services should a good property manager provide?

A full-service property manager should handle marketing vacant units, thorough tenant screening, rent collection, routine inspections, coordinating maintenance/repairs, pursuing evictions if needed, and providing financial reporting. Aim for a tech-savvy company with online portals for owners and tenants.

Red flag: A la carte pricing for basic services like marketing, inspections, or eviction support can add up quickly.

How do I assess a company’s tenant screening process?

Ask about their criteria for credit scores, income requirements, criminal/eviction checks, and pet policies. 

A good screening process is crucial for finding qualified long-term tenants. 

You can request examples of their marketing materials and judge if they put effort into attracting quality applicants.

Red flag: Lax screening that approves tenants with poor credit/rental histories can lead to frequent turnover and unpaid rent.

What questions should I ask about fees and finances?

Inquire about the monthly fee structure (percent of rent or flat fee), if it’s based on rent collected or rent due, and any extra charges for maintenance coordination, yearly inspections, or lease renewals. 

Request to see their management agreement detailing all fees. Ask how quickly you’ll receive rental proceeds after deducting their fee.

Red flag: Excessive or hidden fees can eat into your profits, and delayed disbursements of rental income are a red flag.

How can I gauge their responsiveness and professionalism?

Note their promptness in responding to your inquiries as a prospective client – this foreshadows their future communication. 

Meet them in person, ask for references from other clients, and evaluate if they seem organised and present themselves professionally.

Red flag: A company that is difficult to reach, seems disorganised, or cannot provide solid references may struggle to properly manage your property.

By thoroughly vetting property managers on local expertise, service offerings, screening processes, financials, and professionalism, you can find the right partner to safeguard your investment.