Hiring a property management company can ensure every aspect of your investment operates smoothly and can enhance the value of the property. One essential part of the hiring process for a property manager is to review the contract. The contract can seem complicated and lengthy if you’re hiring a property manager for the first time. So to cut through the legal jargon and fine print, below are five things to ask about to help you get a clearer picture of what the management company is offering and what to expect for service.

The commercial real estate team at NAI FMA Realty offers these basic things to consider and understand on a contract before signing.

Tips on what to look for in your property management contract

1. Dealing with Fees

Be sure you know exactly how the fees are calculated and understand how it compares within the market. Typically a contract’s fees are charged on a monthly rate based on gross income collected.  Maintenance tech fees are typically separate from management fees.

2. Term of Contract

The term of contract should clearly define specific dates for the management services, including the start and end date. Most often the term is for one to two years but it can be advantageous to consider a longer term.

3. Is it Clear What is Included?

What fees are included as part of the property management contract? Is your property manager in charge of finding vendors or contractors or is that your responsibility? Will services such as construction coordination be included? Be sure to ask questions such as these and get in writing what specific tasks or projects are considered part of the contract. This is one of the most significant and costly errors a commercial landlord can make when hiring a property manager. You do not want to be surprised by a contract that makes you responsible for paying things that you thought were included as part of the management services. 

4. Know Your Financial Status

Every month, you should receive a detailed financial report of your income and expenses related to your property. The contract should specify who is to receive the report, as well as how disbursements are handled and by what date.

5. Establish Communication

Setting ground rules for regular discussions/meetings is important. Find out how your property manager will communicate with you and/or the ownership group and establish a strategy that works for both parties. Agree on times and frequency of calls and how often to send emails to ensure you are getting the information that is important to you.

Extra Tip: What Type of Organizations Are They Involved in?

Do they belong to professional organizations like the Institute of Real Estate Managers (IREM) or the local realtors association?  The answer will provide a good indicator of their professionalism, ethics and efforts to stay current on the latest industry trends and best practices.

Although this process may seem daunting, with proper thought and planning, it can be quite straightforward. If you are looking for a reliable property management company in Lincoln to work with, NAI FMA Realty has been providing professional service for over 50 years. Visit their website to view their services, and call them at (402) 441-5800 to speak with a member of their team today.