Managing your own rental property/properties requires your constant attention to detail. From sourcing tenants, to retaining them, it’s a time-consuming job and usually you end up sacrificing your own time that could have been better spent with your family and friends. This is one of the major drawbacks when you self-manage your investment properties.
That’s why the majority of property owners don’t want the hassle of being directly involved in the day-to-day managing of their investment property. They prefer to delegate those responsibilities to property management companies that provide the service that they require. Finding the right professional manager, who can personalise the service for you, is a must, so it is imperative to have sound knowledge of what types of services you need in order to ensure peace of mind. The right property manager will help you to add significant value to your investment portfolio.
Here are some of our top tips to consider, when finding a property manager to suit your needs:
1. Does your Property Manager own an investment property?
Ask the Property Manager if they own a property themselves. This helps to provide you with a sense of comfort in that they will understand how important your asset is to you. In most cases, a Property Manager who owns a property themselves will have a greater understanding of what it takes to ensure peace of mind.
2. Consider the number of properties they have under management.
Ask how many properties and area of coverage a Property Manager controls. This will help you decide if a particular Property Manager can handle your property. Generally, the ratio of manager to properties is 1:100. If possible, ask for referrals or take a look at some of their currently managed properties and you will be able to ascertain if they are doing the job they are supposed to be doing. Are the grounds being maintained. Is the exterior clean and presentable are just two areas that can be an indication of the Property Managers level of care.
3. Hire a licensed Property Manager.
By law, all Property Managers are to be registered and hold as a minimum, The Real Estate Salespersons Certificate. When looking for a Property Manager, ensure that they hold this certificate or even their full real estate licence. This will give you an assurance that you are not dealing with amateurs which could lead you into unnecessary legal problems and loss of rental income.
4. Ask about their management fees.
The rate of management fees varies greatly, based on the level of service provided. Most management fees range from 8 – 10% of the rental income. There are usually sundry fees such as advertising, photography, administration and maintenance. An agency that charges low fees in order to capture your business may not have the time or the inclination to provide the premium service your property deserves.
5. Examine the term and conditions in handling repairs and maintenance.
Ensure you set up a maintenance reserve from your monthly rental income to cover minor expenses. For example, you can give them the authority to spend up to $800 in an emergency, without contacting you but all expenses must be covered with acceptable receipts. Anything over that amount, you must be informed and give your approval before the repair is made.
6. Check if there is a regular schedule for property inspections.
Ask if the Property Manager has a specific schedule regarding checks on your property, inside and out. It is part of the process to assess the condition of the house and a quarterly inspection should be done. You should receive a copy of the report after it each inspection has been completed.
7. Be clear on the time frame and procedure for accounting of funds.
Most property management companies pay landlords either weekly, fortnightly or monthly. It is important to know when the schedule of payments is so you can plan ahead.
8. A thorough process of tenant screening.
This stage is one of the most important duties the Property Manager will do for you. Screening should include background checks and credit history reports. Screening needs to be conducted for each and every applicant.
9. Make sure your Property Manager is accessible.
Open communication is particularly important, especially if you are away. The Property Manager should make themselves available at your most convenient time, not theirs. Communication should be both online and offline and effectively serve as a bridge between all parties.
10. Review all property management contracts.
Validate the contents of the management contract and see to it that all the above points are addressed to your satisfaction. If possible, ask someone who knows more about contracts just to make sure the company meet your requirements. Recommend a termination clause so if either party need to withdraw from the contract, there will be no conflicts. The key point is that you should be aware of problematic issues and be confident the contract addresses those issues with solutions.
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