Over the years, working in Property management I have come across many property investors that have been stressed and frustrated with managing their own properties. For some property investors, chasing tenants to pay rent and constant repairs and damages caused by tenants has cost them thousands of dollars and not to mention their time and increased stress levels.
For many property investors, the responsibility of managing their investment property can be overwhelming and time consuming and for that reason many property investors decide to employ the skills of a professional property manager.
Some may ask why should I engage the services of a person to manage my property when i can do it myself? Many people think that property managers’ only duty is to collect rent, and yes, it is one of their key duties but there is so much more a property agent can do for you which will benefit you in the long run and will also free up your time which will allow you to do more of things you enjoy.
Property managers can assist in overseeing the day to day tasks of managing your property, some of the duties performed by property managers include marketing the property, attracting new tenants, ensuring that the property is maintained, keeping you informed and compliant with legislation and collecting rent.
Having the best property agent can add value to your investment and relieve the stress of self- managing your property. For these reasons choosing the right property manager is extremely important.
Here are some important points to consider when choosing a person or agency to manage your investment property:
1. Check their Licences/Certification
Always check that your real estate manager or agency has the valid credentials to operate and undertake the duties of a property manager and/or agency in your state. Each state in Australia has some specific guidelines and requirements as to who can operate as real estate agents, this includes both sales agents and those managing property, as they are also bound by their states legislation.
It is important to note that each state in Australia has its own individual licensing body and legislation that is pertinent to the real estate industry. If you require more information regarding this, contact your states licencing authority.
2. What is included in their fee structure?
Fee structures for managing property vary with some charging a percentage fee of the weekly rent while others charge a fixed fee. In the Brisbane area for example rates can vary between 5.5% to 10% whilst others charge a flat rate fee for e.g. $35.00 per week per property. When choosing a property management agent, it is important that you ask what these fees include and check if there are any additional fees to having your property managed.
The fee structures for property management vary; with some following a percentage fee structure of the weekly rent in Brisbane area, for instance, rates can vary between 5.5% to 10% whilst others follow a flat rate fee structure for e.g. $35.00 per week per property.
Some of the additional fees that agents may charge can include advertising costs, routine inspections, monthly statements, lease renewal fees, end of financial year statements, administrative charges and attendance at tribunal. It is important that you as a property investor to do your research and ask the right questions as the cheapest advertised rate will not always work out in your favour if you have to pay additional costs.
3. Tenant Screening
One of the most important duties of a good property manager is to screen qualified applicants to avoid any tenant related problems in the future. As a property investor, you want to have good and reliable tenants that will pay your rent on time and keep your property well maintained with no damages.
Most property managers have viewed thousands of rental applications and they have a trained eye when reviewing and analysing the candidates and will be able to notice any red flags and warning signs. Ask the person you are considering to manage their property how they screen tenants, will they check references and will they check the applicants on tenancy default databases.
The last thing any property investor wants is a tenant who has a default on a past tenancy, a tenancy default is a red flag and needs to be avoided. Thoroughly screening tenants will general lead to quality tenants who will pay on time, rent longer, cause less problems and put less wear and tear on your property
4. Property Inspections
Regular routine inspections will assist in identifying any maintenance issues before they become major issues. Routine inspections are paramount to keeping your property in good order. Ask the property agent how many routine inspections will they complete during the term of the tenancy and if they are included in the price of fee structure.
Generally, a good property manager will complete a routine inspection quarterly and will provide a written report with photos identifying any issues at your property. Routine inspections are a great tool used to identify maintenance and repair issues early on before they grow into more costly problems.
As a property investor, routine inspections will also assist you in planning and budgeting for any major works that may be required.
5. Maintenance Issues
General maintenance and repairs are essential with any property, to keep the property in good order and keeping your tenants happy. In the long run a well-maintained property will continue to keep adding value to your investment. A good manager will have qualified and skilled tradesman on hand that can look after any maintenance and repair issues that your property requires.
As a property agent for many years, I have noted that all property investors are not the same. Some property investors do not wish to be contacted on trivial maintenance issues and are happy for the property managers to arrange for repairs, whilst others request to be contacted for all maintenance issues and some will also request to use their own tradespeople.
When choosing a person to manage your property, ask them how they address maintenance issues if you are not happy with their procedures, negotiate your terms, a good property manager will be able to accommodate your requests.
6. Local knowledge and skills
As mentioned earlier, all property agents, including property managers, sales agents, buyers agents and auctioneers must have the valid credentials as per the licencing requirements of the state to undertake the duties when managing your investment property. A good property manager will be competent, understand factors that affect the local real estate market, have great communication skills and will work with you to achieve the best outcomes for you.
A good real estate manager will work within the guidelines of current legislation, will keep up to date with any new legislation that affects your investment property and can communicate any changes in a timely manner.
Communication is one of the most vital aspects in the relationship between a property manager and the property investor. Your property is important to you and you need to know what is going on with your property that is why an open, honest and transparent communication is essential. Let your property manager know what level of communication you would like to receive, some property investors request regular contact whilst others just like to be contacted when issues arise, some prefer emails whilst others phone calls.
The property manager is also the buffer or the middle man in times when there is conflict between tenant and owner, being able to communicate effectively will assist in resolving situations in a calm, timely manner whereby there is a win-win situation for all parties.
Your property is one of your biggest financial assets, so bearing this in mind you want to employ the services of the best property manager, that will not only manage the day to day operations but will also add value to your property and maximise your returns. Use the 7 points identified in the article as a guide and ask as many questions as you can, this will assist you in choosing the best property manager for you and your property.