Have you made the big financial commitment of buying an investment property in Melbourne? As exciting as it is, now that you’ve made the leap you are going to want to protect your investment and ensure you get a solid ROI. Managing your investment property can quickly become overwhelming. That’s why many savvy investors are […]
A property manager should look after your investment property as diligently as you would. That’s what you’re paying them for. Some property managers will promise you everything, but drop the ball after you’ve agreed to let them manage your property. How can you avoid this? What should you look for in a property manager?
Don’t be wooed by big brand agency names
Bigger is not always better. One agency may do a great job for their clients while another with the same big brand name may be less effective as a property manager. You need to dig deeper to find property management companies you can rely on.
Your search will start with an interview. Some questions you should ask include:
- What is the cost of your service? You want a complete answer to this question. The costs should include a breakdown of all their services and include GST.
- How do you screen potential tenants? You want tenants with a history of paying rent on time and maintaining their rental property.
- What rent can I reasonably expect to receive? An experienced property manager will know the rental rates for all kinds of properties in their area.
- How often will you inspect the property? Find out how often routine inspections will be conducted – yearly, bi-annually or quarterly.
- If an emergency arises, will you pay the cost? In an emergency, repairs will be needed fast. There may not be time for you to immediately transfer funds. You can reimburse the property management after they have handled the emergency.
Find out if they charge a fair property management fee
Property management companies are competitive. Some will charge more for full service and some will charge less. You want to know if your property manager is charging a fair fee.
Full service includes interviewing tenants, running background checks, collecting rents and handling maintenance issues as they arise. Some property managers also offer hybrid services. You can choose your tenants or take care of maintenance issues as they arise.
A fair fee is not always the lowest fee, nor can you expect better service when you pay a higher fee. What is ‘fair’ should be based more on how much your property manager will actually do for you.
You should get a detailed list of the services property management companies provide. The lists should be itemised, giving you a clear idea of what you can expect for the money you are paying the service. Get “apples for apples” quotes and then do more research to select a company that will deliver as promised.
Do your research
Today, doing research can be easier than it was in the past. You can often look online and find positive and negative reviews about a property manager. Of course, the positive ones will be on their website, but if clients have not been satisfied with their service, they will find a way to express their feelings online. Forums, independent sites and other online services can have invaluable information about property management companies.
- How quickly does the property manager handle maintenance issues?
- How happy are you with the tenants they have chosen?
- Do they go out of their way to handle emergencies quickly?
- Are you happy with their network of trades?
- Do they conduct regular inspections?
You will be renting your property for many years. It’s worth taking the time to do all the research you need to do to select a property manager you can count on to manage your property as diligently as you would.
Find out how often they intend to keep you updated
It is your property and you want to keep abreast of it. You shouldn’t have to contact them when you want an update on your property. Even if things are going smoothly, a property manager should contact you regularly with an update. You are the landlord. You are hiring them to manage your property, but you have the right to be updated and the right to make decisions regarding your property.
If an emergency arises or a tenant is not paying the rent on time or is neglecting the property, you should expect your property manager to notify you immediately. You want reliable long-term tenants. In some cases, even tenants with a good track record can run into problems and not be able to pay the rent on time. If it’s a one-time event, it may not be a big issue, but if it happens repeatedly, you will need to decide what to do.
How do they handle rental arrears?
If a tenant is repeatedly late in paying, a property manager may have to take firm measures. You don’t want to hire a property manager who lets rent slide on a regular basis. Each state has specific laws regarding tenants in arrears. In most states, you or a property manager can provide the tenant with a notice when they are in arrears.
If a tenant is a few days behind in their rent, they should contact them and ask them why they haven’t paid their rent. A good tenant may have a legitimate reason for paying a few days late. A pay cheque may be late or they may have had an unexpected expense. You don’t want to lose a good tenant. A property manager will take a sensitive approach with the tenant and will work with you to work out a payment date.
If a tenant is repeatedly in arrears, the property manager can issue a notice to vacate. In Victoria, a notice to vacate can be issued 14 days after rent is due. In Queensland, a notice to remedy breach can be issued after 7 days. Laws vary in different states. Your property manager should know the laws; know how to issue a legal notice; and not hesitate to issue the notice.
Finding the best service for you from the many property management services that are available will take time and research. It will be worth it, though. You will own your property for years. Knowing you have a property manager you can count on will make being a landlord easier and increase the value of your investment.