Successful property investors treat their portfolios like a business and, like any great business, a good property portfolio has a good manager.
The quality of your manager could easily make your investment successful or end up costing you.
Not all property managers are born equal and, we hate to tell you, the great ones are hard to come by. Here’s how to tell if you need a new (better) one.
If you’re using an inexperienced property manager, you’re likely missing out on a bunch of the benefits they can provide and probably make property investment stressful rather than stress-free. If you’re paying someone to take care of a valuable investment, you should expect the person doing that job knows what they’re doing.
Senior staff should be involved in the day-to-day operation of the property management business, and it won’t take you long to figure out if your property manager isn’t cutting it. Of course, every property manager must start somewhere, but just make sure anyone new or in training is working directly with a senior staff member.
Another sure-fire way to know your property manager will have your best interests at heart is to ask whether they own any investment properties themselves. If they do, you know they will be well-aligned. It’s almost impossible to understand what it’s like owning a rental property and how vital it is to have a good property manager unless you’re an investor yourself.
Dishonesty and poor communication
As the owner of a property, you should expect to be kept in the loop with all key information such as market fluctuations, maintenance, repairs and the tenancy in general.
Obviously, no one wants to pick up a call with bad news but it’s important that you, as a landlord, are well informed at all times. If your property manager is vague on details or isn’t getting your property rented and won’t tell you why, it’s definitely time to reconsider your manager.
Another red flag is if your property manager only works 9-5 and turns off their phone outside of those hours. Tenants can have issues arise at any time of day so it’s important they have someone to contact at all times. Additionally, when performing open for inspections, many prospective tenants work and cannot attend inspections during the day, so working after hours and on Saturdays is critical for getting the best tenants and best weekly rent.
Irregular property inspections
Sure, driving around town all day and inspecting properties might not be everyone’s idea of a good time, but it’s a very important task property managers perform. Well organised property managers will have a diary of inspections and map out the most efficient routes.
If you have to ask your property manager to carry out inspections, it means you need to find a more proactive manager.
Payment discrepancies and inconsistent reporting
Landlords usually have a pretty low tolerance for being underpaid or not receiving monthly reporting. Managing rental payments and trust accounts is a job that requires precision and is another key task performed by property managers.
The best agencies have someone in-house who manages this and ensure you are both paid and sent regular reports.
Charging too much
In Queensland, the average property management fee is 7.5%, plus additional fees such as let fees and administrative fees which cover advertising and other business costs. In many cases, you are getting what you pay for so a higher fee can mean better service BUT if you’re creeping up towards or past 10%, you’re being ripped off.
The other thing to be wary of is the agency sneaking in fees they didn’t tell you about. You should be working with someone who is upfront and only charging you the necessary expenses.
Tenants come to you about repairs/maintenance
When tenants go directly to landlords rather than their property manager, it indicates a lack of trust. Often, tenants have more interaction with the property manager than owners do, so this is usually a red flag and indicates that your property manager isn’t responding to their requests or is generally not doing a good job.
You’re getting bad tenants
There’s nothing more frustrating than having bad tenants in your property. With such a valuable investment, you want to ensure that whoever is living in the property is going to treat it with respect. It’s part of the property manager’s job to check rental references from previous agencies and ensure tenants haven’t been blacklisted on state-wide or nation-wide databases.
Property managers should know that the better than tenants, the easier their job will be, so there should be absolutely no excuse for bad tenants.
As a property investor, it’s vital your property is being managed well to maximise your cash flow and avoid costly problems down the track. If any of the above behaviours sound familiar to you, it’s probably time to find a new (and better) property manager (click here to find out how to change your property manager).
Make sure you do some research, ask for references or to see testimonials and ask lots of questions to ensure you’re comfortable you will be getting superior service.
If you have any questions, get in touch with one of our experienced property managers by calling 1300 88 73 28 or email [email protected].