The merits of hiring a property manager, residential or commercial, are well known and appreciated by savvy investors today. Which brings you to the next question – how do I know the difference between a great property manager, a mediocre one or an incompetent one?
We know that whilst making the right choice will deliver financial viability, a wrong choice can be very costly. Here are some critical considerations as you do your research on selecting the right property management company:
How long has the Agency been around for? Does it have a proven track record in property management in Perth Metro and the Greater Perth area? Nothing beats experience because like respect, this cannot be bought but is hard earned over time.
Experienced the Best Property Managers that really know the Perth market will make all the difference of whether you have a financially successful rental management that has a good income generation strategy or otherwise. In addition, an experienced property manager will know the Western Australian market trends and economic patterns and how this changes over time.
There are specific regulations that govern the local Western Australian market and this may vary from State to State in Australia. A good property manager will have excellent industry knowledge and amongst the first to ensure that this information is disseminated accordingly to the Property Owners and Tenants. Furthermore, it is very helpful if they should have a record of this information through newsletters and blogs (see Minimum Compliance article)
The real estate industry in WA is governed by REIWA and your property managers should be accredited by the professional body so that they are kept in the know through continuous professional education programmes.
You will know a good property management company by the way they treat their employees. Those that possess Long-Serving Senior Managers often care for their people and in term their management team would have built a solid relationship with the Property Owners so that they are not being shuffled around from one manager to another.
Responsible for Managing Rent
Another important indicator is their policy of tolerance in rent arrears. Are they prompt in collecting the rents and serving notices should the Tenants fail to pay rent on time?
Sourcing and Screening Great Tenants
One of the most important tasks of the Property Manager is to find the right tenant and recommend this to you. They should do their best to source a good long term tenant who will upkeep the property well.
Responsible for Managing Tenants
Communication, communication communication. We cannot stress this simple yet critical function enough. A great property manager is one who will proactively communicate with both parties instead of just waiting around until an issue brews up. They will be the conduit that will facilitate a positive relationship ensuring promptness and fairness in their response to both parties.
Systems and Procedures
With years of experience, the in-house systems would have been tested over time Serve their clients INHOUSE instead of outsourcing the property management functions
(See article on Risk of Outsourcing Property Management functions)
This system also includes Maintaining Records in an efficient and error-free way, which will prove extremely helpful during tax time.
Responsible for Managing Property Maintenance and Repairs
Most property management firms will have reliable tradespersons to attend to repairs in a fairly quick time at reasonable or competitive rates. They should also be on the ball with any repair or maintenance issue as delays in resolving these issues will only lead to frustration on the part of the Tenants and damage to the relationship.
An excellent property management company should have strong ethical practices and transparent management of the relationship with our tradespeople. Because they act on behalf of the owners interest, they should not be receiving any form of benefit from the tradespersons that they use so that the investor’s interest is protected at all times.
Conducting Regular Inspections and Rental Reviews
Are your property managers proactive in conducting rental reviews and advise you on the changes in the market prices? Good property managers understand that Property Owners depend on rentals in order to maximise their property yield and will proactively assist them in this goal.
Regular inspections are also important to ensure that the property is upkept in the manner that is expected and to avoid any hefty costs that could exacerbate in the event of an unattended issue. From time to time, we read in the local newspapers stories of how a rental property had been wrecked by tenants, which could have been avoided if regular inspections were conducted.
As with every physical asset, the condition will deteriorate over time due to wear and tear, therefore regular inspections that are thoroughly conducted will ensure a well maintained property. Again, there is a difference in the way inspections are conducted as an experienced property manager will know the critical check points for property inspections.
Minimising Your Vacancy Rates
Vacancy rates are important indicators on the performance of the property management company. Find out what the company’s vacancy rates are and compare it with current industry rates to ascertain the effectiveness of the property management company in managing this vital aspect of the job.
In conclusion, when choosing a Property Manager, it is always best to choose quality over the cheapest service provided. Often times, when the prices are not competitive, the cost cutting measures employed internally will be reflected in the exposure that the Property Investor undertakes.
Your property investment is a valuable asset to you and it pays to ensure that you hire not just a property manager, but a great property manager that has your best interest at heart.