Key Points:
Metrics like lease renewal rates, termination terms, and online reviews can be indicative of the quality of service you should expect
Establish clear expectations regarding roles, responsibilities, and communication
Don’t rely solely on the property management agreement – ask more questions to discern how the company operates
This post concludes the three-part series exploring a common real estate dilemma: Should I sell or rent out my property? For those who have opted to rent and are now evaluating professional property management, this guide provides a framework for making a wise choice.
If the first two posts were missed, catch up here:
• Should I Sell or Rent Out My House?
• Should I Self Manage My Rental Property?
Choosing to rent instead of sell is a significant decision. For many owners, the next question is whether to manage the property personally or partner with a professional property management company. If the latter seems like the right path, it’s important to choose carefully.
Turning over the keys to a rental property means trusting someone else to care for a valuable real estate investment. It’s critical to ensure the company is competent, reputable, and aligned with ownership goals. While it’s standard to ask about pricing or request a copy of the property management agreement, those questions alone won’t reveal everything necessary to make an informed decision.
Before making contact, conduct preliminary research:
Better Business Bureau (BBB): Review for complaints. While some ex-tenant complaints may be expected regarding security deposit withholdings—look for any recurring areas of dissatisfaction or complaints filed by property owners. View the A+ Grace Management BBB rating here.
Department of Regulatory Agencies (DORA): Check for any disciplinary actions on file. Though uncommon, such records are publicly available and can offer valuable insight. A clean record is a positive indicator. View the clean Grace Management DORA information here.
Once basic due diligence is complete, here are four essential questions to ask before hiring a property manager:
1. Who Will Be the Primary Point of Contact?
Ask the company:
Will communication be directly with the individual managing the property or do I have to call into a particular company department with questions?
Is my property manager contact person a licensed real estate professional?
Understanding who will be overseeing day-to-day management of the property is crucial. Some companies use salespeople for the initial contact but hand off ongoing responsibilities to someone else entirely. At Grace Property Management, owner-clients work directly with a fully licensed Executive Property Manager—no bouncing between departments.
2. What Is the Lease Renewal Rate?
Tenant retention matters. A high lease renewal rate indicates that tenants are satisfied—something that reflects positively on the management company. Turnover, on the other hand, is expensive and disruptive.
The 2024 lease renewal rate at Grace Management was 78%, meaning that nearly 8 out of 10 tenants chose to stay. That kind of consistency points to our strong, tenant-focused service.
3. Is the Company Full-Service?
Not all property management companies offer full-service management. Some may operate on a partial-service model, leaving some responsibilities to the owner, such as:
Handling evictions
Transferring or paying utilities during vacancies
Large maintenance projects
To clarify, ask:
Who handles evictions?
Who manages utilities?
Grace Property Management provides full-service management, from leasing and maintenance to legal matters. Service levels vary across companies, so it’s important to confirm that responsibilities align with the owner-client expectations.
4. What’s the Length of the Term of the Property Management Agreement?
Many management agreement contracts are for 12 months or more and may include early termination fees. A more flexible agreement may better reflect the company’s confidence in its service quality. Be cautious if the property management company is trying to lock you into doing business with them.
Ask the following:
What is the term of the management agreement?
Are there fees for terminating early?
Grace Property Management offers a month-to-month management agreement, with no penalties for cancellation. We are committed to earning trust by providing high-quality ongoing service, not contractual obligations.
Key Takeaways Before Signing On
Yes, the management agreement is important—but it’s just one piece of the puzzle. Most contracts are written by attorneys and include similar language. What they fail to reflect is:
The business's responsiveness to owner inquiries
The company's professionalism, knowledge, and integrity
Attitude toward tenant relationships
Commitment to protecting and enhancing property value
Take time to assess how the company actually operates—not just what’s written on paper.
Learn more about what a management agreement can’t tell you about working with a property manager in this article.
At Grace Property Management, we believe that when property management is performed with integrity and transparency, both tenants and landlords benefit. Property management is not just our business - it is a relationship between us, our owner-clients, and our tenant-residents.
If these are important to you, we may be a good fit to provide you, your property, and your tenant-resident with our full-service property management services.
Feel free to reach out to us for assistance.
Grace Property Management & Real Estate
Serving real estate investors and residents since 1978.
303-255-1990
