Seasoned investors know that securing the right investment property is just the beginning to investment success. The role of the property manager is vital to the ongoing maintenance and growth of the property asset.
Choosing the right property manager can be overwhelming, so we’ve put together our top 10 questions to ask to help you out – covering tenant selection, pricing and maintenance.
1. Who will manage my property?
Don’t expect that the person you meet will ultimately be the one managing your property for you. Find out who will be responsible for looking after your property and ask how long they have been in the industry and working in that particular suburb.
You are looking for stability in the agency and local knowledge.
2. How many properties do they manage?
Local experience is great – but you also want to know your property manager will dedicate the necessary time to your property.
An industry rule is property managers should be looking after no more than 100 – 120 properties.
3. What is the cost of management?
Ask your property manager for full disclosure of all fees – and ensure you are aware of anything considered an “add on” such as advertising costs.
Fee structures can be complicated and typically include:
- A Management fee (a commission percentage of the weekly rental figure)
- A Letting fee (often one or two weeks’ rent)
- An Administration fee (usually a monthly fee for administration)
4. How will you market my property and attract tenants?
This is a very important question. You need to ensure the property manager attends inspections and has a clear strategy to source appropriate tenants.
Find out the channels the property manager will advertise the property in and when they propose to hold inspections. Make sure these include after-hours and weekend appointment times.
Advertising should include listings on real estate websites, a “For Lease” sign and promotion such as inclusion in direct e-mails and newsletters to prospective tenants.
5. How are tenants selected?
Tenant screening is critical to securing the right tenant for your property.
Ask the property manager how tenants are screened and selected and what systems they have in place for checking credit and rental history and confirming employment details.
6. How do you deal with tenants in arrears?
The property manager should provide you with their company policy for what happens when a tenant falls into arrears.
Also ask them about late fees and how rent is collected and paid to you.
7. How much rent do you recommend for my property?
Your property manager should advise upfront an estimated rental return for your property and this should be based on market research for similar properties in the area.
Talk is cheap. Don’t fall for the highest figure promised as they may not secure this amount – look for the property manager who knows the suburb and can support estimates with figures.
8. How many times a year will my property be inspected?
The legislation varies from State to State but speak to your property manager and make sure they are complying with the maximum allowed. Find out how the results of each inspection will be reported to you.
Also ask what else you can expect to receive from the property manager such as monthly statements, maintenance updates, lease renewals etc.
9. What happens if my property needs some urgent maintenance?
Most property managers have a list of preferred contractors that deal with emergency situations and will co-ordinate required works to an agreed financial limit.
It is important to cover off with your property manager what the processes are.
10. How would you ensure the best returns from my property?
A good property manager does more than just collect rent – they provide an integrated service to protect and get the most from your asset.
Ask the property manager why he feels he/she is different from competitors in the area.