So you’re searching for a property manager to look after one of your biggest assets – how do you choose? What do you ask? Where do you start?
A property management fee for the average rental property is most commonly less than dinner for two at your local RSL
(with no wine). It’s important to shop around, but instead of shopping around for a difference of half a percent,focus on quality of service and the agency’s dedication to increasing the capital value of your property.
- How do they source tenants for you? Obviously the internet is what all agencies will be able to offer you – the main sites are realestate.com.au & domain.com.au. Check the quality of ads on these websites and note who has “Premier” listings which show higher on the page. Check which agents use quality professional photography. Do they offer a tenant database of all those people that inquire either on the phone or pop in to their office? Do they do a weekly email out to tenants looking for new & current listings? Do they refer existing tenants who would like to move? Often the best tenants are found through networking and from building relationships with them.
- What is the tenant selection process? Can the tenant afford the rent plus bills and living expenses, what references do they have both personal and professional? Do they use the National Tenancy Database to do a final check (most do). It’s not just if they can afford the property, its also important to know if they will keep it well and also be easy to deal with.
- What percentage of their properties are in arrears? We monitor our arrears on a daily basis and our arrears are consistently under 4%, and if I’m honest most of our arrears are tenants who have paid a few dollars short rather than not paid at all. The property manager should know this sort of information off the top of their head. Also check how arrears with tenants are managed, what communication takes place and how are difficult situations resolved.
- What are their average days vacant over the last month? Our average sits consistently around 11 days on market, which is around three times faster than the broader market. Again, it’s more about finding out if your property manager knows this sort of information. If they don’t monitor it how can they measure their performance or improve?
- Ask the property manager how depreciation works in relation to your investment. If they have no idea then this is a good indicator they have no understanding of the bigger picture and are unlikely to be able to offer you much beyond rent collection. Your property manger should be able to offer you a recommendation to a Quantity Surveyor to conduct a “Depreciation Schedule” to help minimize your tax.
- What is their arrears policy? The answer should be a “no tolerance policy”, this means that at 1 minute past midnight following the day rent is due – it is late. Tenants should be getting a communication the 1st day their rent is late – not on day 3 or 4.