While many investors spend a large amount of time and effort carefully researching the property markets and securing a top investment, they spend very little time finding a professional property management agency that can preserve their property’s capital value and maximise their income.
Too many landlords choose their agency on fees alone. Others think they don’t need a Property Manager and can do it themselves. This is possibly because they don’t understand that property management is much more than just collecting rents.
An effective and professional property management agency minimises vacancy, maximises your return, and all while preserving your property’s value. It requires:-
- Industry specific skills and knowledge such as knowing how to market your property effectively to get it in front of the largest number of ready tenants.
- Setting the rent at an appropriate market level to ensure timely leasing from the choice of a variety of good quality tenants.
- Checking potential tenants’ references to ensure they are reliable and are unlikely to cause issues.
- Drawing a fair and comprehensive lease to protect your interests as a landlord.
- Lodging the bond with the relevant authority.
- Handling repairs and maintenance with skilled, licensed tradespeople.
- Paying insurances and outgoings on behalf of the landlords.
- Keeping up-to-date with complex ever changing tenancy legislation.
In choosing a property management agency, you want it to be a long and successful association. To help in this decision, here are a few important questions to ask or consider while choosing the solution for your property management needs:
Does the agency have a dedicated property management department and how many staff will be looking after your property?
Many agencies see property management as a “poor sister” to the more glamorous sales department, and some even leave the management of clients’ assets to the front desk staff. Ensure that your chosen agency has a dedicated property management department.
Is the director/owner of the agency involved in the day-to-day management of the property management department?
Most agencies have a sales department and a property management department. In most agencies, the business owner has a sales background and not a property management background, and looks after the sales department more closely, leaving the management of their property management department to a Property Manager.
You will find that an agency where the director has an active involvement in the property management business will gain you a better-run investment with superior results.
How many years has the Property Manager looking after your property been working in real estate?
This relates to the Property Manager and not the agency.
A Property Manager who has been in the industry for a while and has a proven record in looking after investment properties is ideal. You want to have a Property Manager who is good with people, however will need to be tough from time to time. A Property Manager who is enthusiastic about their work, with great attention to detail and top problem solving skills should be attributes at the top of your list.
How many years has the Property Manager been with the agency?
You should look for stability in your Property Manager. You want someone who will learn your property inside and out and able to make better judgements and recommendations due to this knowledge.
Does the property management agency give you a written proposal?
Look for an agency who has put in the time and effort to present a professional image to you and gives you a written proposal.
If they make the effort to present their services professionally to you, it is likely they will look after your property professionally as well.
What geographic area does the property management service cover?
You should be looking for an agency and Property Manager with expert local knowledge, who can advise you based on what happening first-hand in the local market. Being local also means your Property Manager should can keep an eye on your property by driving past from time to time, in addition to regular property inspections.
Does the Property Manager hand out keys or do they attend property inspections with prospective tenants?
If the agency hands out the keys to let prospective tenants inspect the property on their own, move on to another agency. Too many things can go wrong with this approach and the security of your property is compromised.
Inspecting your property with a prospective tenant means that the agent has a better opportunity to promote the property, as well a chance to get to know the tenant a little better.
How many properties does the Property Manager look after?
A Property Manager who looks after too many properties will not be able to give your property its due attention. An appropriate number for a Property Manager to manage is around 100-150 properties for the job to be done well. Any more than this and your property will suffer from lack of attention.
Agencies who control the amount of properties per Property Manager may charge a little more for their services, however landlords find this extra expense translates to a trouble-free investment that often produces a higher return. Also consider that property management fees are tax deductible.
Is there enough staff available to show your property to prospective tenants?
A good property management agency must be able to show prospective tenants through your property on a regular basis. Inspections form the basis of a good pool of tenants for you to select the best option.
Does the agency have a system for checking prospective tenants with regard to credit worthiness, past rental history and their current employment?
Ensure that your chosen agency subscribes to a major tenancy database, and checks all prospective tenants carefully.
Will the agency go to court for you if necessary, and what is their success rate for previous appearances?
Unfortunately, sometimes you may have to go to tenancy tribunal to protect your rights as a landlord. If this happens you will need an experienced Property Manager to represent you as tenancy laws have become quite complex. Ask how the agency will help you in this regard.
After you have chosen your Property Manager, you should establish a collaborative relationship and agree on your working parameters. Explain to them how involved you want to be in the ongoing management of your property. Make it clear what they are allowed to do without referring back to you, and when you do require them to contact you. This will avoid many of the misunderstandings that arise between Property Managers and landlords.
As a property investor you do have the choice of managing your investment property yourself, or delegating the day-to-day management to a property management agency and Property Manager. Engaging with the professionals is a wise choice in today’s more complex property market.
However, it is critical that you choose carefully, as smart and proactive property management can considerably increase the return from your investment property.
For more information on our professional property management service, call the experts on 4628 7444.