Picking the perfect property manager will ensure that your investment is in safe hands.
When you’ve put a substantial amount of your hard-earned dollars on the line to purchase an investment property, you want to know that your property will be expertly managed to maximise your returns and minimise stress. While there is the option of managing the property yourself, many investors choose to utilise the services of a professional property manager.
There are several factors to consider before you choose an agency to manage your property.
What do you look for in a property manager?
A property manager performs many duties, explains Leanne Habib, CEO of Premium Strata. “A property manager will manage tenants of the property, collect their rent, [arrange] payment of certain bills and organise repairs and maintenance,” she says. “If the property is a unit, any repairs and maintenance relating to the airspace within the apartment is managed by the property manager; any issues relating to common property are handled by the strata manager.”
Start by hunting around for an agency with plenty of experience managing properties in your area. Most property managers are licensed real estate agents, but there are also boutique property management firms available. You’ll need to consider a manager’s depth of experience managing similar properties to yours, as well as how many properties they look after at any one time.
Next, consider the specialist experience a manager might bring to the table. For example, do they have a long list of contacts with local tradesmen when you need to get a maintenance job done fast? Do they know the right steps to follow if you have problem tenants that need to be evicted?
Finally, you’ll also need to consider a manager’s communication skills, which are critically important, and the full list of services they will provide. A good property manager will work with you every step of the way to make sure your requirements are met, such as letting you specify eligibility criteria for tenants (no pets or no families, for example).
You need a manager who will look after your property just the way you like, ensuring that you get a good return on your investment without any hassle along the way. With this in mind, finding a property manager with all the right skills for the job is crucial.
Nick selects a property manager
Having just purchased his first investment property, an apartment in Melbourne’s CBD, Nick is ready to find a manager to look after his property. Nick is keen to take a step back and let someone else handle all the day-to-day jobs, so he simply selects the property management department of the same real estate agency that sold him the property.
It only takes him a few weeks to realise he’s made a mistake. The property management department is clearly understaffed and has too many properties on its books. Not only do they drag their feet when finding prospective tenants, but organising plumbers and electricians for basic maintenance tasks takes weeks.
Having just been given a lesson in the importance of comparing your options and doing plenty of research, Nick begins a proper search for a new property manager. Armed with an improved knowledge of the services a property manager performs, Nick soon finds the right agency to manage his property – and he’s ready to sit back and let the returns from his investment roll in.
Tips for finding a property manager
Keep the following tips in mind when searching for a property manager:
- Look locally. In the real estate business, local knowledge is crucial. From knowing how to attract tenants, to setting the rent at the right level and having contacts with trusted tradies, a local property manager gives you a big advantage.
- Do your research. If you have an Internet connection and a spare half hour, you can find out a wealth of information about the property managers in your area. Habib recommends reading customer reviews of property managers online to get some honest opinions from fellow investors.
- Rely on word of mouth. “The best way to find a good property manager is through word of mouth and client feedback,” Habib says. “This is the most trustworthy feedback as it is feedback based on experience from consumers and not just what is read via marketing or advertising campaigns.”
- Ask questions. A property management company may sound spectacular on its website or brochure, but you’ll need to ask a range of questions to get past the PR spin. You’ll find a list of handy questions you can ask a prospective property manager below.
- What services do they offer? Not all property managers are created the same, and not all of them will offer the same services, so make sure you know exactly what you’ll be getting for your money.
- Compare communication. A property manager must be able to quickly and effectively communicate with you at all times, whether it be to inform you of necessary repairs, provide you with a choice of tenants or simply check in to see if there’s anything more they can do for you. Make sure you find a property manager who is always easily reached and who always keeps you up to date.
- Trust. Consider whether or not you trust a particular person or agency to manage your investment. Handing over control to someone else allows you to remove any emotional involvement from your investment, so you’ll need to be completely satisfied that your property will be managed to your exacting standards.
- Cost. Any expense associated with an investment is always going to be an important consideration, but remember that it’s not the only factor you’ll need to take into account. The old adage that you always get what you pay for holds true when it comes to property management, so don’t put price above all other factors.
Sources to help you find a property manager
Need help tracking down a property management firm close to you? The following resources should help:
- Google. Do a quick search for property managers in your local area to see what’s available.
- Real estate websites. Realestate.com.au and Domain are the two biggest property listing websites in Australia, and they also have online tools to help you find real estate agents and property managers all around the country.
- Productreview.com.au. Check out reviews from fellow investors at this useful website to get an idea of what to expect from an agency. Just remember to take each review with a grain of salt.
- WOMO. Word of Mouth Online is a business review site that can help you track down useful information about property managers.
- Rent.com.au. Search a directory of more than 6,200 property management agencies throughout Australia.
Questions to ask a prospective property manager
Leanne Habib, CEO of Premium Strata, outlines five key questions you can ask prospective property managers to help narrow down your choice:
- What are your qualifications? “This would provide an indication of the level of experience the manager has to offer, such as a licensed manager versus a manager who holds a certification of registration,” she says.
- How many properties do you manage as a company? This provides an indication of the size of the agency and their experience and service levels. Be mindful that an agency that looks over a large volume of properties may not have the time to devote to managing your property.
- How many properties are allocated to each manager within the company? “This will provide an indication if their managers have too many properties to look after, and in return are likely to be stretched out over too many clients, giving less time to each client as a result,” Habib says.
- What is your commitment to best practice? “This will provide an overview of how they do things within their business,” Habib says.
- What differentiates your services to other agencies? This will help you learn more about what one property manager can offer that other managers can’t. For example, what marketing strategies will they use to attract potential tenants to your property? What processes do they have for selecting a tenant? When they find a good tenant, what sort of steps will they take to retain that tenant?
Some other key questions you might ask include:
- Will I have one point of contact with the agency?
- How do you determine the rental amount?
- How will repairs and maintenance be handled?
- Will I be contacted before any work is performed?
- How often will you inspect the property?
- What will you do if a tenant falls behind on rental payments?
- How often will you contact me about my property?
Well-known property management agencies
We’ve included a selection of well-known property managers below to help you begin your search. The list is by no means exhaustive, so make sure to shop around for more options in your local area.
Some companies specialise in property management, including:
- Rental Management Australia
- Real Property Management Australia
- Your Future Property Management
- Investment Property Managers
Others also sell real estate, including:
- LJ Hooker
- Ray White
- First National
- Century 21
Make sure to compare a range of available options to determine which property management agency is right for you.
How to get the best out of your property manager?
You’ll need to add the property manager’s fee into your calculations when determining the overall success of your investment. The fee charged varies depending on the state or territory the property is located in, but it’s usually a percentage of the rent on the property, such as 8% or 10%.
It also pays to review your property management services regularly to make sure your property is receiving the care and attention it deserves and not falling through the cracks. Contacting your property manager regularly for updates will help you determine how high a priority your investment is and will also help ensure that the manager remains committed to helping you get the most out of your investment.
If you’re looking for someone to look after your investment property so that you don’t have to, make sure to do your research and shop around. Selecting the wrong property manager can have a detrimental impact on the success of your investment and even threaten its viability. But if you put in the time and effort to find a reliable and professional manager, you’ll be able to sit back and watch your wealth grow.