A LOT of homework goes into buying an investment property, but the process doesn’t end there.
Hunting down the best property manager requires as much research as the buying does, industry experts say.
Run Property chief executive Rob Farmer says the most common question he is asked is: “How do you tell the difference between a great property manager and a bad one?”
He says a property manager needs to ensure the tenants are looked after, the appropriate legal documents are in place, maintenance is carried out professionally, rent is collected on time and tax records kept.
“This protects the value of my investment, helps to attract better-quality tenants and minimises my worries,” he says.
Farmer says understanding the local market is a property manager’s greatest asset because, in his opinion, many landlords are receiving 10 to 20 per cent less in rent than market value dictates.
“It’s a sad fact in Australia that the property management division of a typical real estate company is the ‘poor cousin’ of the sales division,” he says.
“Therefore, the property manager does not get the support, systems and training to help them do a better job.”
Stephen Wasley is a landlord in the eastern suburbs who has several residential investment properties managed by Run Property.
“I think what’s important as a landlord is choosing a property manager who you click with, who has a great personality and knows the job inside out. What you don’t want is some agent who’s just waiting to jump-start their real estate career and get into sales,” he says.
“You need to have good communication with them and not just during the letting process – it should continue throughout the tenancy as well.
“The experience I have had in the past is that so many just don’t return calls. You don’t want to have to be calling them.
“Part of that good communication is them letting you know when you’ve got a good tenant because that makes a difference when it comes to reviewing the rent.
“If they don’t suggest a rent review then they’re not doing their job, but if they know you’ve got a great tenant who pays on time and looks after your property then they can suggest a smaller rent increase so the tenant will stay on.”
Wasley says he has managed his properties himself in the past, but the manager of two Bondi eateries says time is money.
“That may not have been the smartest move, because even though I saved money it was a lot more time-consuming than I thought. You really need a good system in place.
“I guess my feeling now is that if you have got a good property manager that you have confidence in, then the benefits far outweigh the costs,” he says.Michael Conolly, head of property management for McGrath Estate Agents, says what makes a good property manager a great one occurs after they have been hired.
“You should think of it as a long-term relationship, and you need to remember that this is about maximising return for your asset,” Conolly says.
Conolly says hiring a property manager should be thought of as buying an asset such as a car or performing a job interview.
“Why don’t you consider doing a test drive of the property manager? Don’t be afraid to ask them some hard questions. I’m always surprised by how many people don’t even ask for previous testimonials,” he says.
He says there are several key questions landlords should ask, primarily how the tenant application process is done.
“How do you check the applicants and can you show me? It’s easy to get a tenant, but you want a quality tenant,” Conolly says, adding that in Brisbane’s tight rental market where vacancy rates are sitting around 1 per cent, landlords do have the upper hand.
“There should be no excuses to have anything other than quality tenants in this market,” he says.
Article from the Telegraph May 19, 2012 by Kristen Craze.
What do you think is the most important thing when selecting a Property Manager in Brisbane?