How to choose a good property manager and avoid a bad one
When it comes to buying an investment property, the purchase is only the beginning. A good property manager can help you get the most out of your asset over the long term. But how can you choose a good one – and what are the signs of a dud?
SELECTION CRITERIA
Spending six figures or more on an investment property can be a lot to get your head around, so when it comes to choosing a property manager, you really want to be sure your property you're getting your money's worth.
'It's really easy for landlords to fall into the trap of fee shopping because they think all property managers are the same,' says The Rental Specialists principal Jo Natoli. 'This isn't true.'
She says when interviewing different prospects, landlords should have a clear idea of what is important to them in the management of their property as well as what they'd like to achieve and what their expectations are of their property manager.
Ray White's head of Property Management for Australia and New Zealand Zac Snelling says it's a good idea to ask for references and check online reviews (with a grain of salt) but also investigate tribunal records if available.
'Don't just take their word for it – ask questions. How do they handle disputes? What systems do they use? What support structure do they have around them?' He says.
He also suggests checking the size of their portfolio.
'Size really does matter when it comes to the sustainable level of portfolio size for service to remain high for both the landlord and the tenant,' he says. A manageable portfolio size depends on a few factors – team support, admin help, systems and tech, and if your property manager is juggling too many properties on their own, service levels can slip.'
SIGNS OF AN EXCEPTIONAL PM
A standout property manager stays ahead of the game when it comes to legislation, has great systems and procedures, get routine inspections done and maintain excellent relationships with landlords, tenants and the tradies that maintain the properties, Natoli says. They also stay on top of rental arrears and are proactive instead of reactive when it comes to maintenance and repairs.
'For me, though, a great property manager is someone who also has a knowledge and understanding of the business of investing – the dollars and cents of it; understanding, for example, the effect of an interest rate rise or cut or how serviceability for a new loan is assessed,' she says. 'This is what I believe a landlord should be looking for. More than someone just 'doing the tasks of property management'.'
MAKING SURE YOU'RE IN GOOD HANDS
Once you have a property manager on board, you can make sure your property is being looked after by going over routine inspection reports thoroughly, says Snelling.
'Are they detailed enough? Are the photos current and clear? Are the comments changing with each report, or does it feel like a copy-paste job?' he says, adding that you should check inspections are being done at the right intervals otherwise it might void your insurance policy.
He also suggests arranging an onsite visit with your property manager every 12-18 months as it can help you pick up issues before they become bigger problems while setting a strong expectation with both tenants and the property manager.
He says being proactive with maintenance helps to reduce issues over time while adequate landlord insurance is essential to cover you when the unexpected happens.
SIGNS OF A DUD
Ray White's head of Property Management for Australia and New Zealand Zac Snelling says to watch out for the following red flags when looking for a property manager.
1. Portfolio size – if they have so many properties they can't stay on top of things, service could suffer, including tenant relationships, missed maintenance and improper or infrequent rent reviews
2. Poor communication – while PMs are often very busy, you shouldn't need to chase them up repeatedly over simple issues
3. Lack of transparency – being cagey about discussing the way they operate or their rental arrears should be a warning to the landlord
4. Poor advertising – if the photos and advertising text don't present the property on offer in the best possible way how can you be sure to attract tenants?
5. Lack of training – with legislation always changing across the states, it's essential that property managers receive regular, ongoing education and training
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