10 Questions to Ask a Property Manager Before You Sign a Management Agreement

A management agreement sets your fees, your control, and your exit for a year or more. Sign the wrong one and you pay for a year. Ask these ten questions before you sign. Strong answers protect your cash flow. Weak answers tell you to keep looking. Bring this list to every interview, ask the same questions of each manager, and write down what you hear. The comparison alone will narrow your choice.

1. What are all your fees, and what triggers each one?

One number never tells the whole story. Most managers charge 5 to 8 separate fees. The monthly management fee runs 8% to 12% of collected rent, or a flat $100 to $150. The leasing fee, charged when they place a new tenant, often equals 50% to 100% of one month's rent, or a flat $500 to $1,500. Renewals run $100 to $350 each time a tenant stays. Then come the smaller charges: setup, marketing, inspection, reserve, and a markup on every repair. Stack them together and your true first-year cost often reaches 18% to 20% of gross rent, not the headline percentage on the brochure.

Ask for a full fee schedule in writing before any meeting ends. A strong answer lists each fee, the exact amount, and the event behind each charge. The best managers walk you through a sample month and a sample year, so you see the real total. Ask one more question: which services carry no extra fee. A clear line between included and billed tells you how the company thinks.

Red flag: vague "admin" or "technology" fees with no definition, a low headline rate propped up by charges buried deeper in the contract, and any manager who will not put the schedule in writing.

Green light: a manager who hands you a full fee schedule before you ask, names every charge and the event behind each one, and walks you through a sample month and a sample year, so the total holds no surprises. Remember, you don't want cheap. You want effective movement toward your long-term goals.

2. How do you screen tenants, and what are your exact criteria?

Your return depends on the tenant more than any fee. One eviction erases a year of savings from a cheaper manager, plus lost rent, legal costs, and turn expenses. Ask for their written screening standards: minimum credit score, income multiple (often 3x rent), verified employment, rental history, and background and eviction checks. Ask how they treat income gaps, co-signers, and pets.

A strong answer names hard numbers and shows one consistent process applied to every applicant, in full compliance with fair housing law. Consistency protects you twice. Good screening fills units with people who pay, and clears you of discrimination claims. Ask how many applicants they reject in a normal month. A manager who never says no is not screening.

Red flag: a manager who fills units fast but skips verification, or keeps criteria loose to cut vacancy days. Speed means nothing when the tenant stops paying in month three.

Green light: a manager who pairs strong screening technology with seasoned judgment, verifies income and history on every applicant, and holds an iron-clad commitment to fair housing and FCRA compliance.

3. What is your repair approval limit, and do you mark up repairs?

Maintenance is where trust holds or breaks. Ask two things: the dollar amount they spend without your sign-off, and how they price the work. Common markups add 10% to 15% to a contractor invoice. Others bill an hourly coordination fee of $20 to $45. Some fold coordination into the monthly fee and add nothing.

A strong answer gives you a clear approval threshold, often $300 to $500, itemized invoices with the vendor named, and the freedom to use your own contractors. Ask how they handle a true emergency at 2 a.m., a burst pipe or no heat in winter. You want a defined path, a trusted vendor list, and a call to you as soon as the tenant is safe.

Red flag: an in-house maintenance arm with hidden markups, no invoices, and no spending cap. Those turn a $90 faucet into a $250 line item you never approved, month after month.

Green light: a manager who sets a clear spending limit with you, has itemized invoices with the vendor named available for your review, welcomes your own contractors (when they meet the management company's requirements), and calls you the moment a real emergency starts, right after the tenant is safe.

4. How do you set and review rent?

Price wrong and you lose either way. Too high and the unit sits empty. Too low and you give up income every month for a year or more. Ask what data drives their pricing: comparable rents, current days on market, and seasonal demand in your neighborhood. Ask how often they revisit rent at renewal.

A strong answer points to a real market analysis, a specific target range, and a rent review every year before the lease renews. The best managers show you the comparable rents they used. Pricing built on evidence beats a number pulled from memory.

Red flag: a manager who sets rent from a guess, copies last year's figure without checking the market, or pushes a high number to win your listing, then drops the price two weeks later when nobody applies.

Green light: a manager who prices from live market data, shows you the rationale behind the number, and reviews the rent every year before renewal, so your unit stays competitive and full.

5. What are your vacancy and days-on-market numbers?

Every empty week costs you close to a full month of income over the year. Ask for two numbers in writing: average days on market and current portfolio vacancy rate. Ask where they list units, how many photos they shoot, and how fast they show a vacant home.

A strong answer shares real figures, wide listing syndication across the major rental sites, and same-week showings with a fast application turnaround. Numbers under 30 days on market signal a team marketing hard and pricing right.

Red flag: a manager who dodges the numbers or blames the market for long vacancies. A good operator tracks days on market and shares the figure without flinching, because the number reflects their work.

Green light: a manager who shares real days-on-market and vacancy figures without prompting, lists across every major rental site with sharp photos, and shows homes the same week they open.

6. How and when do I get paid, and what do statements look like?

You hired a manager for income, so learn how the money reaches you. Ask the owner payment date each month, the statement format, and whether you see every charge in an online portal. Ask about trust accounting, security deposit handling, and year-end tax documents.

A strong answer gives a fixed payout date, clear monthly statements with income and expenses itemized, on-demand portal access, and a 1099 at year end. The best managers keep owner funds in a separate trust account and reconcile every month.

Red flag: pooled owner funds, late or irregular payments, statements you have to chase, and a manager who will not explain where your deposit money sits.

Green light: a manager who pays you predictably, itemizes income and expenses on a clean statement, keeps owner funds in a separate trust account, and gives you portal access and a 1099 at year end.

7. Who is my point of contact, and how fast do you respond?

Communication predicts your whole experience. Ask who you talk to, the response time you should expect, and how tenants reach the office after hours. Ask whether you get a direct line or a shared inbox.

A strong answer names a single point of contact, a set response window measured in hours, and a 24-hour line for emergencies. The best managers put response times in the agreement, so the promise survives a busy week.

Red flag: a rotating cast with no clear owner of your account, slow replies during the sales pitch, and no after-hours coverage. Response time rarely improves after you sign, so treat the first week as the sample.

Green light: a manager who gives you named points of contact, answers within a set window measured in hours, runs a 24-hour emergency line, and writes those response times into the agreement.

8. Are you licensed and insured, and what coverage do you carry?

Licensing and insurance protect you when something goes wrong. Most states require a real estate broker license to manage property for a fee. Ask for the license number and verify the number with your state board. Ask about their coverage: errors and omissions, general liability, and whether they require landlord insurance from you.

A strong answer produces the license on request, names each policy, and treats the question as normal due diligence. Professionals expect owners to verify.

Red flag: a manager who will not show a license, carries no errors and omissions policy, or handles security deposits outside a proper trust account. Any of the three puts your money and your legal exposure at risk.

Green light: a manager who shows the broker license on request, carries errors and omissions and general liability coverage, holds deposits in a proper trust account, and treats your verification as normal due diligence.

9. How do you handle late rent, evictions, and legal issues?

Nonpayment tests your manager. Ask their process for late rent, the day they file, who pays legal costs, and whether they offer an eviction protection plan. Ask how many evictions they filed last year and how long each took.

A strong answer walks you through each step with dates: notice, filing, hearing, and a clear split of costs. The best managers act fast and by the book, because a slow start adds weeks of lost rent.

Red flag: no written delinquency process, a manager who passes every legal bill to you with no guidance, or a team letting late rent slide for months before acting. You want a firm, lawful process, not a scramble.

Green light: a manager who follows a written delinquency process, files on a clear timeline, explains the cost split up front, has an attorney on stand-by or retainer, and acts fast and lawfully, so a missed payment never drifts into months of lost rent.

10. What is the contract term, and how do I cancel?

Read this clause first. The term, the renewal, and the exit decide how trapped you feel later. Ask the length of the agreement, whether the agreement renews automatically, the notice you must give to cancel, and any termination fee. Ask what happens to your tenant, your deposits, and your records the day you leave.

A strong answer offers a fair term, a 30-day out for cause, no penalty for poor performance, and a clean handoff of every document, key, and dollar you own. The best agreements read the same whether the relationship ends well or badly.

Red flag: automatic renewal paired with a long notice window, steep cancellation fees, and language holding your tenant or deposits hostage until you pay to leave.

Green light: a manager who offers a fair term, a 30-day out with no penalty for poor performance, and a clean handoff of every key, document, and dollar you own the day you leave.

Use the answers, not the pitch

Good managers welcome these questions. They answer with numbers, documents, and a straight process. Score each interview on the real answers, not the charm. The manager who shows you a full fee schedule, a written screening standard, real vacancy numbers, and a clean exit will run your property the same way. Ask all ten before you sign, and keep your notes. The agreement lasts at least a year. The right questions take an afternoon.