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Why you should pay for good property management
Why you should pay for good property management

Property Management is vital for property investors, but how can you tell the good ones from the bad?

In this video Kate Hill shares a few tips and tricks to help you choose a property manager who is worth their weight in gold!

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Hello everyone! How are you all doing out there? I am Kate Hill bringing you the best and unbiased and honest content on property along with some fantastic hints and tips. Today stay tuned for an important property investment tip.

[Music] If there is one thing that is likely to stuff up a property investors ability to hold that property over the long term it is poor property management. Because like most industries there are good and less good property managers out there so the key is being able to recognise one from the other.

The best property managers generally are the ones who consider their job a career rather than a stop gap job or a stepping stone to someday working in sales. And they are likely to be working for agencies who recognise that professional property management is the backbone of their business rather than a way for them to just make extra money perhaps more easily.

Now the rental property sector is highly regulated with different residential tenancy legislation in each state and territory in Australia, so it stands to reason that you want somebody who is at the top of their game because of all the potential for it to go legally pear shaped.

So what do property or professional property managers actually do? The property managers you want looking after your property or your portfolio if you’ve got more than one in one area, will generally offer a whole range of services before during and after the tenancy. There are some variations of course from agency to agency, but you really should expect to see most of these in their service offerings.

Pre purchase inspections. Professional property managers can be a massive help with pre-purchase inspections especially for buyers from interstate because they are obviously experienced and trained in conducting these and they know what to look for in a local rental property.

So it’s really important that you don’t assume that you know what somebody over in that city or town that you’re going to be buying in is looking for in a property because you live somewhere completely different. This is essentially an assessment to ascertain whether the property will be in demand from local tenants and buyers in that area and whether it has all those local must haves for that location. The pre settlement inspection. Now this does not replace the building inspections.

Property managers aren’t building inspectors, but it’s an additional assessment to ascertain again that the property is in the same condition that it was when you bought it as well as whether it may require any other further compliance upgrades or the inclusions of things like ceiling fans, a heater whatever before it is ready to be offered for rent. Now this should ideally as well have been discussed at the above pre-purchase inspection rent appraisals.

Top property managers will provide you with their expert opinion as to the rent appraisal for that property including the research to justify this. It can also be done before you purchase the property so that you actually have a real-life research and ideas into whether and what that likely rent is going to be rather than relying on some wobbly figures from the sales agents.

Selecting top quality tenants. Professional property managers have oodles of experience in selecting the top tenants for your property including conducting reference checks and all that kind of background checks. Even if the rental market is firing, its vital that potential tenants for your property have been screened properly and ethically.

Unfortunately when there is more tenant demand than rental supply bad property managers often adopt a just tick and flick approach which could have some serious financial consequences for you. So during your tenancy, throughout your tenancy period the best property managers will complete the entry condition form in a timely manner and manage the same from your new tenants so that there is an official record of the condition of the property at the start part of the lease agreement.

They will also collect the rent, disperse it to you if there are any arrears they will manage that process professionally and take any further action as required. Now as you’ve seen or as you may have seen outlined in my book The Female Investor, professional property managers will also do the following things.

They will complete regular property inspections to check on the condition of the property and report back to you. They will manage the lease renewal process including any changes to the rent as well as recommending whether to offer the current tenants an additional lease term or not.

They will receive and action requests for repairs and maintenance from the tenants. They will issue the required entry notices to tenants for a huge variety of reasons like repairs or valuations or maybe you’re going to be selling it. They will provide suggestions and quotes for replacement of appliances as may be required. They will issue regular rental statements so that you have a record of the rent that has been received. At the end of the tenancy the exit condition report will be will be completed, again in a timely manner so that the bond can be released to the tenant if there aren’t really no major issues. If they are they will manage this whole process for you.

So how do you go about finding this amazing property manager?

You should by now have a bit more of an understanding as to what the really professional property manager will do for you. But of course you need to be able to find one of them to engage them.

Please promise me don’t just sign up to the real estate agency that might be selling the property because it’s easy. This decision can be fraught with future issues especially if that agency is more focused on sales than anything else. You know nothing about who those property managers are. Do a bit of research which is easier than ever to do online these days.

Search for local property managers in that area who have excellent reviews. Pick up the phone and speak to them. Ask them what their services are. How do they provide them? How many properties do they manage? How do they manage them? If they are trying to manage too many properties just by themselves they might not be able to provide you with the best service.

Some agencies organise themselves by task rather than by rent listing so various members of staff will conduct the different jobs for each tenancy and this can make it easier and more seamless for that agency and for you when someone’s off sick or on holiday. Ideally they should be local to the area where you have purchased your investment property so that they understand that local market and they’re not 100 kilometres away and you know, that’s going to make it hard for them to come to your property.

If all of this due diligence seems like just too much effort you could engage professional buyers agents such as our fabulous selves. We know and work with the best of the best of the property management industry around the country every day of the week. And finally guys I beg you please please don’t skimp on paying for a decent property manager. This is a 5, 6, $700,000 and more asset we’re talking about here.

You need someone experienced to look after it, keep it in good working order. If you need to sell it quickly you need to be charging market value rent. See my other video. It needs to be looking sharp and well-maintained. You cannot rely, you can’t expect to really get a good service because you’re trying to save $5 a week because you’re haggling on the percentage that they are charging. If it’s a quality manager I promise you they will be worth your weight in gold. After my little rant there, or was it a seminar I don’t know. Anyway I will keep you posted on all things property from around Australia as our year progresses. Don’t forget to hit the subscribe and like buttons I do really appreciate it hope you’re enjoying the content and I will see you all again really soon.

Bye.

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