The questions to ask a property manager before you sign

There is no shortage of question lists for interviewing a property manager, and almost all of them were written for the American market, where licensing, trust accounting and eviction timelines are settled and the answers are largely predictable. In Nairobi the answers are not predictable, which is what makes asking worthwhile. These are the twelve questions where the answers actually diverge, and we have put ours next to them.

A note on what this is not. If you already have a manager and are wondering whether to leave, the questions are different and they are in should I fire my Nairobi property manager. This piece is for interviewing someone you have not appointed yet.

On money

1. Is your fee charged on rent collected or rent due?

The most useful question on the list, and the one most likely to produce a pause. A fee on rent due is payable whether or not the tenant paid, which means a month where you receive nothing still costs you. It also removes the manager’s financial reason to chase arrears. A fee on rent collected means they do not get paid until you do.

What good sounds like: "Collected." One word, no qualification.

2. What else is charged, over a full year?

Ask for the total, not the percentage. The four additions that turn a low headline into a high cost are a setup or onboarding fee, a markup on maintenance, a letting fee charged again when the sitting tenant renews, and a fee to leave. A 10 percent quote carrying all four is more expensive than a 13 percent quote carrying none.

What good sounds like: a specific answer to each of the four, and a willingness to put the answer in the agreement.

3. Where does my rent sit between the tenant paying and me receiving?

The clause that decides what happens if the firm fails while holding two months of your money. Rent held in a designated client account, separate from the company’s trading account, is identifiably yours. Rent paid into the operating account is a debt owed by a company that may not have it.

4. When am I paid, and what happens if you are late?

Every manager has a date. Far fewer have a consequence. The presence of an agreed consequence is the difference between a term and an intention, and it is the cheapest possible test of whether the firm expects to be held to anything.

Ask what happens when they get it wrong. Every firm can describe what happens when things go right.

On tax, and on getting out

5. Who calculates and files the MRI, and do I get the receipt?

Kenyan residential rental income attracts Monthly Rental Income tax at 7.5 percent. Somebody has to withhold it and file it, and if that somebody is nominally you while the manager holds the money, you are carrying a KRA obligation on funds you never touched. The receipt reference is the part to insist on: withholding it and filing it are different acts, and only one of them leaves a trace.

6. What is the notice period, and is anything payable if I leave?

Ask before you sign, not when you want out. You are looking for notice that runs both ways, no minimum term you have to serve before you may give notice at all, and nothing payable on exit. A firm with an exit fee has a financial interest in making leaving unpleasant, and you will only discover how much of one at the worst possible moment.

What good sounds like: a short, mutual notice period and a flat no to the exit fee. What that process looks like in practice is in how to terminate a management agreement.

On how the work actually gets done

7. How much can you spend on a repair without asking me?

There should be a number, in shillings, per incident. Without one you are choosing between a manager who cannot act on a burst pipe until you wake up, and one who has replaced the water heater and sent the invoice. Both are bad, and the second is expensive.

8. Who physically visits the property, and how often?

Ask for a name and a frequency, then ask what the last visit found. This is where remote landlords are most often quietly failed: the rent arrives, the statements arrive, and nobody has been inside the flat for a year. A manager who inspects quarterly and writes it up can tell you what condition your asset is in. One who does not is administering a payment, not managing a property.

9. What is your response time, and what if you miss it?

Again, the consequence is the substance. A published response time with nothing attached is a marketing claim.

10. How many properties does one manager carry?

Rarely asked and highly predictive. There is no correct number, but there is a number beyond which the inspection in question eight cannot physically happen, and a firm that has never counted is telling you that nobody is accountable for a specific list of homes.

On tenants

11. Walk me through how you vetted your last tenant.

Phrased as a specific past event rather than a policy, because policies are easy and recall is not. You are listening for employer verification, bank statements or pay slips actually seen, a previous landlord actually telephoned, and identity documents checked against the person who turned up. "We are very thorough" is not an answer to this question.

12. What happens if the tenant you place defaults?

The honest range runs from "we will help you pursue it" through to replacing the tenant at the manager’s own cost. What matters is that the answer is specific and in the agreement, because default is the scenario where a landlord abroad is least able to act and most dependent on someone else caring.

Our answers, on the record

Publishing these is the point of the article. If we are going to suggest you interrogate a manager, it would be poor form to leave our own answers to a sales call.

• Fee basis. Collected. 10 percent of collected rent for long-term management, 20 percent of revenue for Airbnb and short-stay, one month’s rent one-off if you only want a tenant found.
• Everything else. No setup fee, no commission taken from contractors, no letting fee at renewal, nothing payable to leave. All four, in writing.
• Payout. Net rent clears to your overseas account on the fifth, and we cover the delay charges if a bank holiday pushes the wire.
• Response time. 48 hours on any request. Miss it and we waive that property’s management fee for that month.
• Tax. The 7.5 percent MRI is calculated, withheld and remitted to KRA by the twentieth, with the receipt reference on your statement.
• Default. A long-term tenant we placed who defaults inside six months is replaced at our cost.

On the headline percentage we are unremarkable and would rather say so: Nairobi long-term management generally runs 8 to 15 percent and short-stay 15 to 25 percent, and we sit inside both bands. The full breakdown is on the pricing page, and what management actually covers is in what you actually get.

Related reading: the agreement clause by clause, whether you need a manager at all and what management costs in Kenya. If you have not assembled a shortlist yet, start with how to find a property manager in Nairobi and how to read the top ten lists.