Payment to owner
- What day of the month do they mail checks to owners?
- Will the check be for that month, or will the management company hold back a month?
- It’s better to have your rental revenue is in your bank account collecting interest as soon as possible rather than sitting your manager’s bank account.
- Do they provide direct deposit?
Taxes
- Will the management company provide you with a summary profit and loss statement for tax purposes?
- Are they able to advise you on tax deductions?
Accounting
- Do they keep detailed records and documentation?
Reporting
- How often do they send out reports? When are they sent out?
- Will you be able to view reports online?
- Request to see a sample report
Security deposits
Security deposits are an important tool for motivating tenant care and recouping losses due to tenant damage, but if they aren't handled correctly you could lose your right to keep any portion of the deposit or worse, end up owing your tenant several times the deposit amount. Ask any prospective property management company the following questions:- Are security deposits allowed to be collected in your province?
- How do they handle security deposits?
- How much is collected?
- Do they accept personal checks for the security deposit? What if the check bounces? This is not a good idea and the deposit should be cash, a money order or a cashier’s check.
- How quickly do they send out refunds?
- What is their list of conditions and deductions for refunding security deposits? How often do they go to small claims court over security deposits?
Miscellaneous
- Do they make payments for owners (mortgage, insurance, property taxes, condo fees, etc.)?
- Will the manager be authorized to sign checks on the owners account? If so, what types of controls are put in place to prevent misuse of funds or outright embezzlement?
- How quickly do they pay vendors?
- Do they prevent the co-mingling of funds among the properties they manage?
