Before choosing a property management service, you need to ascertain whether they're licensed by the state and certified by a professional property management organization. Nothing else about the property management group will matter if the service isn't a certified or licensed one. So looking for these credentials is your first order of business.
A Little about Licensing
Checking for licensing will require you to do a little research. Each state deals with licensing a little differently. In some parts of the country, a property management company has to have a real estate broker license.
In other parts, they may only require licensing from a state real estate board. In some other places, they don't need licensing at all. Licensing comes into play most often if the property management services are collecting rent. You will have to search for your particular area's property management licensing laws.
Education is also a major factor. Look for property managers who have the CPM designation or some other form of certification. The CPM designation will let you know the service is a member of the Institute of Real Estate Management and has the approval of the National Association of Realtors. The CPM designation tells you the property management has,
- Taken legitimate courses in property management
- Completed all the requirements set by the IREM
- Professional references
- At least three years of experience
- Met all of the points on this checklist
So even if you can't find a licensed project management service, a CPM will do just as well. Besides, with or without a license, a professional designation from a property management association should stand as a bare minimum requirement anyway.
There are other certifications as well that can tell you a lot about the property management company. The IREM also offers these designations.
- ARM – Accredited Residential Manager
- ACM or ACoM – Accredited Commercial Manager
Understand these are all individual designations. So they only apply to one person, not the entire property management group. However, if the property management group has someone with a CPM designation working in an executive position, then the company as a whole can receive the AMO, or Accredited Management Organization designation.
While these are some of the most recognizable designations, the IREM aren't the only professional group that trains and certifies property managers. They get special mention because they're the only association that specializes in all three types of properties.
One of the oldest and largest organizations is the Building Owners and Managers Association. Beyond them, there are several more organizations.
Some property managers may display several acronyms after their name. These are all certifications that show you they have the education and the backing of these professional organizations. Don't just assume any acronym is good, look them up.
Some certifications have narrow definitions and may not fit what you need. Once you understand their accreditation, you can start the process of really narrowing down your choices. Talk to places like Reedy and Company for more information.