Finding the right person to manage your investment is a big decision, so it is important to do your research before settling on a Property Manager. We’ve put together our top 10 tips on how to find a Property Manager who will suit your requirements. Don’t forget to download the Property Manager checklist available in our Members area and at the bottom of this article.
Why is a good property manager important?
Choosing a good Property Manager will do more than give you someone who can collect your rent. They will help you maximise your investment. They will provide their knowledge on the laws and legislation of Real Estate, find and screen suitable tenants, conduct inspections and organise maintenance work, when required.
Owning an investment property is important in building your financial future and therefore you want a Property Manager who is able to help you minimise your risk and maximise your return.
The top 10 tips for choosing your Property Manager
1. Leverage referral sources
Word of mouth is a powerful tool, so if you have friends, family or colleagues who have rental properties, the best place to start is with the Property Managers they recommend. Create a list of suggested Property Managers or Real estate companies that are referred to you from different sources. Note the names that are mentioned multiple times from various sources.
It is just as important that you ask those who are referring to you whether they are happy with the company or person they are using and what problems they have had. Even though referral sources can be biased, it does help give you a start on who may or may not fit your needs.
2. Focus on agencies experienced in rental listings
While it might seem that all real estate agencies are experienced in managing rental properties, this is not necessarily the case. It is not uncommon for real estate agencies to focus the majority of time on property sales and leave the property management tasks up to junior of administration staff.
In order to provide the best support to your investment, you need to engage an agency or Property Manager who is passionate, qualified and experienced in managing rental properties. After all you want someone who is trained in sales and negotiation to ensure you get the highest possible rental return on your property.
3. Do your research
One of the best ways to shortlist property management companies is to search current rentals in and around the suburb of your investment property. You want to know where they advertise, the quality of the listings on their books and the average time taken to fill their listings.
Online reviews from tenants are also important, after all property management is all about keeping your tenants happy so you can retain a guaranteed rental return, reduce vacancy and get the price you want for your property. Pay attention to tenant complaints and how they are addressed to gauge the customer service quality of the Property Manager.
4. Interview prospective Property Managers
Before you settle on ‘the one’ make sure you have properly considered your options. Like interviewing an employee, you need to consider your options with your Property Manager. This will be a business relationship you are entering into, and like an employee, you need to make sure you get the best fit for your needs and goals.
Ensure you ask them questions about their experience particularly in listings like yours, their services, fees and understanding of the laws surround the leasing processes.
5. Test their communication
When it comes to managing an investment property there are situations where a quick response is integral. Whether it is a maintenance issue or a tenant complaint, the sooner the problem is dealt with the happier all parties will be with the situation. You don’t want to lose a good tenant due to poor communication from your Property Manager.
Your Property Manager needs to deliver tenant satisfaction, collect rent on time, deal with any issues and keep you informed. Quite often your investment property may not be anywhere near your primary residence, so it is important that you can trust your Property Manager’s communication on important items such as property damage, maintenance issues, rent reviews, lease renewals and vacating tenants.
The best way to gauge a Property Managers level of communication and service is to analyse how they respond to your initial enquiries. If you send an enquiry email and you are not responded to for days, or every time you call the person you need to speak to is unavailable, this could be an indication that this company is not suitable to manage your property.
6. Make sure you understand their management agreement and fee structure
When interviewing your prospective property management agencies make sure you thoroughly understand their management agreement and fee structures before you enter into an agreement with them. In particular if an agency is offering you a base rate that is considerably lower than others agencies, make sure you find out why. Are there extra fees that are not included or are there responsibilities that they are not offering to carry out?
In short your Property Management agreement should cover:
- Setting, collecting and adjusting rent.
- Finding and screening potential tenants.
- Inspection processes and documentation of property condition report.
- Handling leasing documentation and security deposits.
- Handling complaints/ emergencies, lease breaks, moving out and evictions of tenants.
- Managing maintenance and repairs.
- Management of payments for water services and council rates.
- Fees associated with marketing the property.
- Terms for breaking contract.
- Compliance with fair housing laws.
Make sure you are aware of any additional incidental costs that may occur on top of the agreement to gauge the true value of your chosen Property Manager.
7. Understand their tenant selection processes
It is important for the value of your investment property that the tenants that are selected to occupy your property are going to look after it. For this reason it is a good idea to have an understanding of the tenant selection process that your new Property Manager will take, to ensure they don’t settle for an unsuitable tenant.
Obtaining a copy of the agents application form is a good way to understand the types of information and processes the Property Management agency will take with each applicant. Make sure they ask for references from their employer and current Property Managers.
Good Property Managers will also have subscriptions to major tenancy databases that can further screen prospective tenants carefully, to ensure you get the most suitable candidate.
8. Check their liability insurance
Making sure you have an experienced Property Manager who understands the changing tenancy laws and holds the suitable liability insurances to protect you from lawsuits is a very important consideration when choosing your Property Management partner.
Tenancy laws have become quite complex so it is important that your Property Manager is able to assist and protect you from potential legal implications that can sometimes arise from renting out your property in the form of breaches of the tenancy agreement.
9. Learn how they will market your property
Like everything, good marketing will get you the best applicants. So it is important that your Property Manager both understands good marketing and has the resources to implement their marketing strategies.
The best way to understand the level of their marketing is to look at how they market their current listings. Are they prominent? Does the property look appealing? Is there enough information? Do they make it easy for the prospective tenants to view and apply for the property?
Some key areas to look out for with the marketing of the agencies properties are:
- Listings on WA’s prominent real estate websites, Realestate.com.au, Domain and REIWA
- Do they have an email marketing campaign to provide prospective tenants with new property listings in their area and home open times?
- Do they work with re-location agencies?
- Do they have a prominent shop front that displays listings?
- Do they use non-traditional means such as social media to further extend the reach of their listings?
- Do they take professional photos that positively represent your property?
- Do they provide additional resources such as videos or walk-throughs on their property listings?
- Do they use property and directional signage to make it easier for potential tenants to locate your property?
10. Understand their maintenance processes
Keeping your investment property in good condition is important for your long term returns. Not just for resale value, but also to allow you to get better rent and a higher quality of tenant.
In order to make sure your property is maintained it is important to understand the inspection and maintenance processes that will be carried out by your Property Manager. With regular inspections small repairs can be conducted to avoid potentially larger and more expensive repairs in the future.
The sorts of things you need to know are:
- How many routine inspections do they conduct?
- Do you receive a report and photos of your properties condition?
- What kind of recommendations do they make?
- What happens if there is an issue?
- Who undertakes the inspections? Do they have the experience to thoroughly conduct these inspections?
Ventura iD and Multi Living Developments offer a free consultation service so you can see if developing is an option for you. Call (08) 9241 1600.