Local knowledge is hard to beat when it comes to choosing the right property manager to handle your rental property.
A great property manager will maximise the return on investment on your property and minimise the stress of looking after the needs of your tenants.
They will also know the pricing trends in your area, should have a list of possible tenants seeking property similar to yours and have relationships with trusted tradesmen and service providers who’ll keep your investment in tip-top shape.
While you have the ultimate say on who should rent your property, a good property manager will offer their experience and processes for selecting the best applicants.
For their single-digit commission, a property manager’s experience in dealing with tenants and handling the day-to-day management of property can be invaluable.
Here are nine guidelines for choosing the right property manager for you.
Look to local operators
A property manager must be a licensed real estate agent. They will know the local market conditions and ensure that you charge the highest rent the market will tolerate. It’s in their interests to do so because their commission level is determined by the rental income.
Research alternative agents
Word of mouth is the best recommendation, although you will find reviews of property managers online. It’s best to stay local, however, as property managers will likely already have a list of potential tenants, which will reduce your marketing costs.
Don’t be just a number
It’s reasonable to draw up a shortlist of three property managers. When interviewing each one, ask for the number of properties under management and the number of staff assigned to them and length of time they have been with the agency.
Ask lots of questions
Ask questions that will reveal their knowledge of the local market, how they set their recommended rents, their approach to marketing your property, the process for selecting a tenant and how they retain great tenants. See if they offer a service level agreement as part of their agreement with you.
Get into the nitty gritty
You should also understand how a property manager deals with problems, such late or non-payment of rent, and how they approach disputes. Find out how repairs and maintenance are handled, and whether services such as gardening are provided at an additional cost. You should be clear on the number of inspections to be undertaken each year, and how regularly you expect your property manager will communicate with you. Make sure you are consulted before any work is committed or undertaken.
Go for experience
You should be confident that your property manager will select a great quality tenant. This is perhaps the key skill they bring. They should be able to identify applicants who might be untrustworthy, have a poor record of paying rent on time or have a judgment against them for damaging property. Equally, they should have great systems for identifying and retaining good tenants.
Good communication is key
A property manager should satisfy you that they will respond quickly to issues. Failure to maintain a house or apartment can lead to bigger bills down the track. Be aware that a property manager is usually supported by a small team, so make sure you know who will actually take responsibility for your account.
If you’re still unsure . . .
Seek references from other landlords if you are unable to choose from your shortlist of preferred property managers. Also, ask property managers for their retention rates of landlords and tenants. You may see a pattern emerge.
Don’t nickel and dime
Resist the temptation to go with the property manager who offers the lowest fee. You definitely pay for what you get in the property management game. If a quality, attentive manager comes at a higher price, it may well be worth the investment. Expect to pay in the vicinity of 7-10% of the rental income. Also note that it is tax deductible.