In the last post we touched on real estate property management and property manager services, fees and other general tips. In this post I will touch on some questions to ask when searching for a potential property manager. Also don’t be shy in using your Buyers Advocate to give you some indication on what you should be asking potential property managers.
As with all property investment areas, research is essential so look into at least 2 to 3 companies before selecting the one you want to go with.
1. Is the Property Manager a licensed real estate agent and how long have they been working in real estate and specifically as a property manager?
Your property manager needs to understand local tenancy legislation that impacts your property as well as staying abreast of new laws and amendments that are to be introduced. It also requires a different skill set to that of real estate sales.
2. Is it a dedicated Property management company or is there a dedicated Property management department in the agency?
You want to ensure that property management is a key service offering of the company/agency you are engaging, with dedicated staff and management oversight ensuring essential tasks aren’t assigned to unqualified and inexperienced employees.
3. What are their staffing levels and how many properties do they have under management?
Some companies/agencies have 200 plus properties per property manager. This leaves very little headroom for individual property focus (giving you regular updates) as well as redundancy should a staff member go on leave, fall ill or resign. Ideally you should aim for an agency that has around 100 properties per manager.
Other staffing issues can be to do with if you are to be assigned a dedicated contact, and what is the average length of employment of property management staff as you want as much consistency as possible (I had one bad experience where I went through 4 contacts in a space of 7 months).
Ideally resourcing will also be enough to cater for showing potential tenants properties at least six days a week, as well as readily contactable by the medium you prefer e.g. phone, email etc.
4. What suburbs/locations does the property manager cover?
Ideally you want a property manager that knows the suburb of you property back to front ensuring they know the local rental market as well as where it is heading, in turn helping you maximise your potential rental returns as well as minimise vacancy periods. However as your property portfolio grows you may find financial outcomes are best served by using a property management agency that covers a larger area for all your properties (albeit with risk of losing in-depth market knowledge). This is an individual choice and pros and cons need to be weighed.
5. How do they filter potential candidates?
This is where you can check what systems the property manager has in place to evaluate potential tenants, and how thorough they are. Things that you should delve into further is if they have access to a tenant database, check credit history, employment and rental history. Feel free to ask for the checklist and application form they use to process tenants.
6. What is their inspection schedule and what do they provide from them?
It should be an inspection after three months and then every six months following (depending on inspection outcomes obviously). Also look for an inspection report of substance with some property managers providing photos.
7. What are other regular processes they undertake for owners.
This gives an opportunity for the property manager to focus on things where they feel they add value. Things you may look for:
- Rental reviews. How often, what sources they used to determine and can they provide comparable rental property examples.
- Process for repairs. Do they have access to trusted and qualified tradespeople.
- Final inspections. What additional steps are taken to that of a normal inspection.
8. How will they advertise the property?
Look for multiple mediums of advertising, which demonstrates they have thought of the likely rental candidate pool. See if they have prior examples.
9. What property management/financial systems do they have in place?
What process is there to handle rental arrears, and how often is the checked. What communication do they send to the tenant and when do they send it.
10. Will they attend court on your behalf?
Hopefully it doesn’t ever come to this, but if needs be a property manager will be able to represent you at a tribunal.
11. Do they appear to be a professional outfit?
Do they provide testimonials, do they provide professional material, do they try to minimise potential risk to your property and do they show an active interest in representing your property.