You interviewed several property managers and found one you felt would do a good job at a fair price. It worked for a while, but you’re getting the niggling feeling your property manager is letting you down.
So how do you know if your property manager isn’t doing a great job? Just a few of these 10 signs below should be enough for you to start looking for a new one. Any of these signs is enough to hurt your investment property or make you do the work your property manager is supposed to be doing for you.
1. Lack of communication
When you hire a property manager, you expect them to take a proactive approach and communicate with you regularly. If you have to contact them to find out about your property, they may have put your property on the back burner to concentrate on something else. If they don’t communicate with you regularly, it could be a sign they are neglecting other responsibilities, too.
2. Expensive repairs
You want your property to be in good condition. It’s a property manager’s job to handle repairs as they’re needed. If time passes and no repairs are done, it may be a good sign. If expensive repairs are needed, it may be a bad sign.
There can be two reasons for expensive repairs. Good property managers look for trades who work for a fair price. Another property manager may pay higher “mates rates” to their friends or not take the time to find tradespersons who charge fair rates.
Another reason why repairs may be expensive is because a property manager doesn’t make minor repairs as they are needed. When a plumbing, electrical or other problem gets serious, it costs more to repair.
3. Frequent repairs
When you buy an investment property, you should know the condition of the property. If you are being charged for frequent repairs in a property that is in good condition, it should ring alarm bells. Ask for receipts and an explanation of why the repairs were needed. There may be justifiable reasons for the repairs, but you also want to know if a repair was a tenant’s fault.
4. Few inspection reports
An important part of a property manager’s job is to inspect your property. They may do annual, semi-annual or quarterly inspections. After each inspection, you should receive an inspection report so that you get an update on the condition of your property. If you receive inspection reports infrequently or at random intervals throughout the year, this is a sign that your property manager may not be attending inspections as often as they should.
Whether a report is positive or negative, you have a right to know that your property manager is doing their job.
5. A series of bad tenants
A property manager is supposed to interview potential tenants and run background checks on them. A tenant may run into hard times and be unable to pay the rent. If you get a series of bad tenants, it’s a sign your property manager isn’t doing their job. The last thing you want is a property manager who rents out your property to the first person who walks in the door. They should do their job and find reliable tenants for you.
6. Lack of a support network
This sign can be a little harder to spot than others. A property manager needs a solid support network to do their job properly. If they are part of a property management company, they should have other colleagues and a list of preferred tradesmen they can call on if they need support. For example, if your property needs an emergency repair and their plumber is tied up, they should be able to find a backup plumber quickly.
You may notice your property manager lacks a support network if they are slow to handle repairs or emergency repairs. If they are slow to handle any other part of their job, it may be because they are overworked or don’t have the necessary support. While you may not be their only client, they should always have time to do their job for you.
7. Disputes go bad
Property management doesn’t always go smoothly. Sometimes a tenant is in arrears and a property manager has to talk with a tenant and find out why they didn’t pay their rent on time. Sometimes tenants are so far in arrears, the property manager has to take firmer measures and issue them with a notice to pay or a notice to vacate.
A property manager should know how to handle minor disputes sensitively. You don’t want to lose a good tenant because of one oversight or a problem that makes them late with a single payment. If a dispute goes bad and a good tenant complains to you, your property manager may not be handling the situation as sensitively as they should. If a problem with a bad tenant drags on for months, they may not be taking the firmer measures they should be taking.
8. Rental rates remain stagnant
Ideally, you should have a long term relationship with your property manager. Over the years, rental rates should rise. If rental rates remain the same for too long, you may be missing out on the income you deserve. There may be a reason why your property manager doesn’t raise the rental rate when a lease expires or a new tenant moves into your property. If there is, your property manager should be able to tell you why and back up their argument with facts.
If your rental rates remain stagnant, have a look at what others in your area are charging. If they are getting higher rents, it may be time to look for a new property manager.
9. Excessive fees
You need to read the fine print before you choose your property manager. One may charge a lower rate, but charge higher fees or fees for things that may be included in another property manager’s monthly fees.
Depending on what you pay, it may or may not cover administrative fees, advertising and fees for jobs that are outside the scope of a property manager’s usual responsibilities. Maybe sure you read the fine print, if you start getting charged for things that you thought were covered in your agreed rate, it may be time to look for another property manager. Excessive fees will eat into your profits.
10. You don’t receive a monthly statement
Property managers collect rent and deduct their commission from the rent. You may also authorise them to pay electric and water bills on your behalf. You should expect to receive a monthly statement that includes rent received minus the commission and payments made.
A monthly statement should reflect any other arrangements you’ve made with your property manager. For example, you may have included a clause that allows a property manager to pay for emergency repairs to a set limit. They can legitimately deduct the amount they pay from the rent they collect.
If you don’t receive a monthly report, your property manager isn’t doing their job. You have a right to know exactly what you’re paying for.