Owning an investment property in Phoenix, Scottsdale, Mesa or other surrounding areas can be an excellent investment.  But if you own one or several homes or condos, managing your rental properties can be time consuming.  When this is the case it can be difficult to really enjoy the benefits of your investment.  It might be time to take your investment to the next level and hire a property manager.

Here are 10 tips to keep in mind when you hire a property manager:

1.  First and foremost,  its incredibly important to have a written contract between yourself and the property manager that includes a termination clause.  When you hire a property manager the weight on your shoulders will be lifted.  But what if they aren’t doing a great job for you or your tenants?

Make sure you have a 30 day written notice in the contract in case you need to sever the management agreement.

2.  Will your property be inspected on a regular basis?  You own a valuable asset so you want to make sure its being taken care of!  At a minimum, make sure your property is being inspected on the inside at least once per year and the outside inspected quarterly.

If you have tenant turn over, you can expect the property manager will inspect the inside and outside each time.  But for tenants that stay longer than a year or are long term tenants the property still needs an inspection.  Tenants may not report problems or haven’t noticed them.

For example, your long term tenants don’t see mold around a window because furniture is blocking it.  During a proper inspection, your property manager will see this.

3.   When you hire a property manager, hire a LICENSED one!  This means that the property manager and the company are regulated by the state of Arizona.  This ensures that they abide by regulations and procedures for handling your rental income and security deposits.

4.  Is the management fee reasonable?  There is no standard fee for property management.  But you can expect anywhere between an 8%-10% of the monthly rent charged as a management fee.    Other companies may charge a low flat rate and then you can customize your management plan.

5.  Ask for addresses of other properties they manage and take a look.  Are the properties in good shape?  Would you feel comfortable living there?  If the answer is no, then perhaps the property manager is not for you.

6.  Ensure that there is a clear timeframe and procedure for the monthly and yearly accounting and for when you receive your rental income.  For example, if your tenant pays rent in August, when will your receive the rental income?

7.  Understand how the property manager handles repairs.  Some companies keep a maintenance account to pay for repairs.  Others bill you for the repair on your monthly statement.  Either way works perfectly fine, but you want to know how this is handled.

Pro Tip:  Randall Averitte, property investor and licensed property manager, suggests that you should also evaluate the property manager’s charisma and marketing skills.  Tips 1-7 are great, but there is something to be said for personality.