How to Create Your Request For Proposal for Property Management Services
- September 6, 2019
- Posted by: @dmin
- Category: Uncategorized
Hiring a property management company to administer your building or complex is a major decision. With over 26,000 property management firms across the country to choose from, people you select will ultimately be responsible to ensure that your property is looked after on a day-to-day basis and that your valuable real estate investment is protected.
Whether you are a condo board, a rental building or townhouse complex, or want to rent out scattered properties as an investment income, knowing how to solicit and evaluate property management services is essential. Issuing a Request for Proposal (RFP) is the first step in the process, but do you know how to create one that ensures you receive proposal submissions that suit your needs?
Let’s examine the essential elements of an RFP for property management services. We’ll break down the different sections that it should contain, and discuss what type of information you should include.
How to Create Your RFP for Property Management Services
The purpose of a good RFP is much more than to simply get a quote for services. It’s an opportunity for you or your Board to take a close look at the prospective property management company and evaluate whether they’ll be a good fit. You’ll be able to understand their vision, learn about their processes and approach to providing services, and get a feel for whether or not they’ll be good ambassadors between yourself and your community of residents.
The goal will be to:
- Introduce yourself and provide background information about your property
- Outline the scope of services you need
- State your budget range
- State the required information that proposals must contain
- List the criteria upon which proposals will be evaluated
- Lay out the estimated timeline for the RFP process
1. Provide Background Information
Start your RFP by introducing your organization and providing background information about the property for which you’re soliciting proposals. Doing so serves two purposes: it outlines the parameters for the required services while allowing the bidding company to decide whether you fit their client profile.
What you write here is completely up to you. At a minimum, you should outline basic details such as:
- Number of buildings
- Building types
- Number of residents
- Maintenance/construction issues
- Building age
- Current or former management structure
Also, this part is a great opportunity to discuss the flavour of your community, allowing responding companies to ensure that they are in alignment with this vision.
2. Outline the Scope
After your introduction, you’ll need to clearly state the scope of services: what you’re looking for and how it’s to be delivered. This is the core of your RFP.
Again, what you choose to include in this section depends on your needs. However, most property owners will have similar requirements when soliciting submissions for management services. Do you need basic maintenance and/or administrative services? Or do you need a larger scope of services such as tenant screening and selection? You’ll want to state the exact range of services the submission must address so that the responding property management company will be able to craft a suitable response.
As well, you’ll need to outline how these services are to be done. If this is for a condo development, there may be explicit expectations from the Board relating to reporting and frequency of services. But in any case, clarity about expectations is critical to receiving a suitable bid.
3. Budget Considerations
Not all property owners will state their budget range, preferring instead to see which fee structures are offered so they can respond to the lower bids. Others may want to clearly state their budgets to avoid a misalignment down the road in the RFP process. Whichever option you choose, if you do list your budget, ensure that you are clear on what your financial expectations are, as well as proposed contractual terms.
4. Submission Requirements
This part of your RFP is where you state how the proposal is to be presented, and what information it needs to contain. It has to be a clear and unequivocal set of rules, letting the responding property management company know that their proposal will be disqualified if it fails to comply.
Typical submission requirements may include:
- RFP format and delivery/transmission method
- Summary of proposed services
- Qualifications to deliver services
- Submitting company information
- List of clients and/or testimonials
- Awards and certifications
- Fee structure
At the end of the day, the submission requirements you provide will depend entirely on your RFP goals.
5. Evaluation Criteria
Let the RFP recipient know how the winning proposal will be selected. Will you be going with the lowest bidder for the services you need? Or are you looking at other criteria such as experience, length of time in business, number of employees, approach to providing services, their corporate vision, etc. Clearly communicating this will helps to ensure that a responding property management company won’t be wasting your time, and it gives each bidder a chance to know if they have a realistic chance of being awarded the contract.
6. RFP Timeline
Lastly, break down the RFP process into a list of key events and assign estimated dates to them. Otherwise, you risk accepting proposals from companies who may not actually be able to start when needed.
Follow These RFP Best Practices When Choosing a Property Management Company
Your RFP doesn’t have to be excessively complicated. As long as you clearly state the essentials – your background, services needed, how they’re to be delivered, and how you’ll be choosing the successful bidder – you’ll be well on your way to ensuring that your next property manager is the right one for your needs.
ICC Property Management is the award-winning property-management company of choice for condo owners throughout the Greater Toronto Area. Our licensed and certified management team has extensive experience with all aspects of condo management in Ontario, and they’re ready to help you get the most out of your property. Request a free management proposal and get started today!