The Importance Of Great Property Management
When you think about the time, due diligence, hard work and money that goes into your portfolio, letting everything fall over due to inferior property management doesn’t just affect the here-and-now – it cuts into your future profits too. All too often, finding someone to care for your property and secure tenants comes at the end of a drawn-out process, a quick decision to get someone in and paying rent as quickly as possible. Fast-tracking those final moments is a risk that no investor can afford, with the relationship built between an investor and their property manager one of the most critical partnerships for your portfolio success.
We’re not just talking about ensuring the continued good condition of one of the most expensive assets you’ll ever own, but a property manager will help to carefully select suitable tenants. As your representative they’ll conduct routine inspections throughout the year to ensure your property remains up to standard. They’ll pay bills associated with your property and take care of any maintenance issues.
Finding a property management team in your preferred investment area is initially as simple as searching for a property manager via realestate.com.au. This can be done during the research stage, when you’re still trying to settle on exactly what property type you need to secure. See who’s renting out local properties and what sort of dwelling is most common e.g. units, houses or townhouses. Check the quality of an agency’s photos and how much rent they’re asking for each property – note what makes a property receive a higher premium.
Following your online research, contact at least three to four property managers, then explain that you’re looking for an investment and would like to know more about the area. You can tell straight away if they’re willing to spend the time helping you and just might get your business one day. During the same phone call, you’ll also want to determine whether you’d like to engage the property management company in question – see my suggested checklist below (this is especially helpful when your investment area of interest is outside your home town or interstate).
Note that it’s also possible to protect yourself in the event that your preferred property manager leaves the agency and you’re not satisfied with their replacement. Whenever you sign up to a property management, you will enter a contract. Each state has different rules around minimum days’ notice that you need to give before moving your management elsewhere. I always cross this clause out and correct it with the minimum amount of days to ensure that if I need to move agencies I can without waiting long periods of time (NB You’ll also need to put it in writing if you’re wishing to change your managing agent).
Make your portfolio work as hard as it can by getting your management right from the start. Use my essential checklist each time you’re looking for a new professional to join your property investment team. It’s one of the most important decisions you’ll make – the right one will reward you over and over again.
Q1) How long have you been a property manager?
Q2) How many properties do you manage? (This number should be about 50 to 100 for each property manager.)
Q3) How many property managers are on your team and how many houses do you manage in total?
Q4) How many inspections per year will you conduct and will photos be provided?
Q5) How will you market my property when it comes time to finding a tenant?
Q6) In the event that a tenant is behind on their rent (in arrears), what measures will you take to get them back up-to-date?
Q7) How many tenants does your agency currently have in arrears?
Q8) Who will be managing my property?
Q9) Have you had any houses seriously damaged under your management and, if so, how did you handle them?
Q10) How will you select a suitable tenant for my property?
Q11) What are your management costs?