How to choose a property manager?
By Bernie Tynes
An interesting article appeared recently in a US Real Estate blog, asking “How to Choose a Property Manager”?
Although some of the article and comments pertained to the US, it’s a good question for the Australian market. Let’s look at the key factors discussed and what may have been missed.
1. Look for quality, not price
Firstly, there isn’t a direct correlation between price and quality. ‘You get what you pay for isn’t necessarily true’. When quality is the paramount issue, an extra 1% or 2% should be worth the cost. Running a property management company on pure discount is potentially costed somewhere in the equation. This is not to say that you can’t find quality and price, just be aware of balancing price with quality when it comes to property management.
We’ve heard from clients who have changed property managers because of the lack of communication, the failure to secure a decent tenant and secure a tenancy agreement throughout the tenancy, the failure to collect rent for ten weeks, failure to review the rent amongst other issues! The article stated and we 100% agree. “If you face a trade-off between price and quality, shoot for the better performer”.
2. Ensure your property manager is a licensed real estate agent
Having a manager that is required by law to protect your interests, maintain records and procedures compliant with industry standards and Fair Trading laws and government legislation. You want to choose a company that has taken the time to learn and implement the laws and legislation. Managing the property yourself or with friends or family doesn’t protect you if you fail to provide appropriate tenant protection. It may be cost effective but also a VERY dangerous position. You want to ensure that you are minimising your risk whilst maximising your returns.
3. Niche Property Management
Look for a property manager that specialises in your neighbourhood. Having a property manager that has existing properties under management in your area means they are more likely to understand the neighbourhood demographic, local building and strata managers, property histories (sales and rental) and ultimately provide the highest return on investment.
4. Inspection Reports
Asking for copies of their inspection reports, what’s included, how these are communicated (in writing, verbally, photographic reports?), how often they are reviewed and do they have a dedicated maintenance manager to preserve the condition of your property, address tenant disputes quickly and
5. What happens when things don’t work out favourably?
Choosing your property manager is not dissimilar to a hiring process that you would use for an interview. You want to ensure that you are happy with their past performance, what they offer, how they communicate, screen prospective tenants, manage issues that arise with strata, tenant complaints, managing lease renewals, bond registration, tenancy agreements, rental reviews and maintenance issues.
6. Professional Advice
An experienced property manager should also provide right arm advice on methods to increase the value of your investment, rental review estimates, tenant suitability, required maintenance and vacancy rates in you specific area.
Having read this far, lets summarise what expectations you should have in regards to your property manager. That they:
- Conduct routine and comprehensive property inspections and condition reports (Infinity Property do this every five months with a photographic report)
- Regular rental reviews (Again, Infinity Property do this every five months)
- Lease expiry – ensuring that each month, all leases up for expiry have been reviewed and action to ensure that your property remains under lease at all times along with all final inspections
- Ensure that your rent is collected on time, all accounts are provided each month in detail with all out-goings itemised and if requested all water/rates paid
- Communicate with you on a regular basis in regards to any issues or queries you may have in a timely manner including strata communication
- Maintain your property with a database of authorised, inspected and approved tradespeople
- Understand and apply the Residential Tenancies Act (recently amended 2010)
- Have a dedicated leasing team and a comprehensive database of clients seeking rental properties with weekly electronic newsletters of available properties to ensure your property is tenanted quickly
- Manage your bond in accordance with Fair Trading standards
- Are experienced at screening prospective tenants to ensure that your property is suitability occupied
- Manage legal issues and disputes on your behalf with the Consumer, Trader and Tenancy Tribunal (CTTT).
- Deal with strata corporate body issues as they arise and act on your behalf in relation to strata
To find out how Infinity Property Agents do ALL this for you along with 500+ other clients, contact Craig on (02) 9699 9179.
© November 2013
Infinity Property Agents – Sydney