Choosing a Property Manager

Choosing the right property manager to look after your investment property is one of the most important decisions you will make. A good property manager should look after your investment property as if it is their own, and will be instrumental in nurturing your investment and maximising your returns. As such, you should treat your search for the right property manager as you would a job interview for a prospective employee.

Below are a list of questions that will help you determine the right property manager for you:

* What is the ratio of rental properties/property managers?  A lower ratio of rental properties/property managers allows more time and attention to be devoted to each property in the managers portfolio

* How long has the property manager worked for the company and what is the average staff retention rate? Ideally you want to choose a property management company with reliable, experienced long term staff. Long term staff  and low staff turnover rates ensure better continuity in the management of your investment.

* When you are interviewing the property management company, are you meeting with a Business Development Manager, or are you able to interview the property manager who will be directly responsible for managing your investment?  This question is a really important one. Increasingly rental businesses are appointing dedicated Business Development Managers whose main role is to bring on board new business. Once you have signed up, their job is done and you are passed on to a property manager/team who you have not had the opportunity to meet. Which brings me to the next important question –

* Does this property management company operate a task based style of management or do they offer a portfolio based structure. A portfolio based management is infinitely preferrable as it means that the one property manager is your point of contact and is directly responsible for all property management duties related to your investment. Conversely, a task based business will have one person assigned a your property manager contact, but the day to day duties in managing your investment will be assigned to other team members and may even be outsourced to another company.

* When showing a property to prospective tenants, does the property manager rely on open homes on a fixed viewing schedule, or do they conduct private inspections and flexible viewing times. Overwhelmingly the feedback we get from prospective tenants is that they dislike the open home model. They find these appointments crowded, impersonal and stressful. Conducting private inspections allows a property manager to build early rapport with prospective tenants and is an important screening tool in the tenant selection process.

* What is the property managers attitude to their tenants? Are they viewed as an important client and treated as such, or are they made to feel like second class citizens? It is worth remembering that tenants who feel valued and appreciated are more likely to become excellent long term tenants. Happy tenants, happy property manager, happy landlord.

* What is the fee structure? Is there a flat management fee, or are there a lot of billable extras? The lowest management rate is not necessarily the most cost effective option. Industry standard management fees sit at around 8% but you will have no difficulty finding many companies that will offer rates below this. A management fee of 6 percent can in reality become 10 percent when you factor in all the extra fees and charges, such as postage, sending financial year statements, fees for lease renewals, advertising charges etc.

And finally, it is important to choose a property manager who instills you with confidence and whom you feel you can trust. To quote the lawyer Dennis Denuto from the movie The Castle, “It’s the vibe of the thing”.

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