Property (mis)Management

What to consider when selecting a Property Manager

Paul Maraia, 09 September 2018

 

 

One of the 6 key fundamentals to a successful property investment strategy is the ongoing management and maintenance of your properties. Effective property management ensures your property is occupied by the highest quality tenant, is maintained effectively and continues to perform both in return and capital growth, in line with market conditions. Any investor that has attempted to self-manage their own property will testify to the overwhelming rules and regulations that are piled on top of dealing with tenant frustrations. Smart investors know that engaging a qualified and experienced property manager is the best way to mitigate issues and drive the performance of your investment.


The big question is which property manager do you choose?


Having been involved in property and finance for a number of years I have compiled a list of items you should consider when selecting your next property manager.

Specialist or Generalist?
The vast majority of property managers today are employed by suburban real estate sales agencies who provide property management services as a side business. With the focus on sales it’s not uncommon to come across relatively inexperienced property managers, who aren’t supported and turnover frequently. The alternative is to seek out a property management company that specialises only in property management. This way you know that the full focus of the business is on the management and maintenance of your investment property.

Rental Collection procedure
Your property manager should have a robust rent collection procedure and strict arrears policy. Check to make sure your property manager provides rental payments via automatic direct debt as well as the usual electronic funds transfer, cheque and cash deposit. At sign up tenants should be made well aware of the arrears procedure which should initiate the first day of the arrears. Lazy, inexperienced property managers can let arrears get out of control which can greatly affect your cash flow.

Tenant Selection Process
An experienced property manager will know what to look out for and what to avoid when selecting a quality tenant. The Tenancy application should be a thorough process which includes employment checks, previous tenancy reference checks and tenancy database checks. When dealing with your property manager it’s good to recognise that they experience pressure to fill vacancies as quickly as possible, however making the wrong decision can be very costly. Tenants with insufficient income, poor employment stability and a history of damaging properties should be avoided. Past performance is certainly an indicator of future behaviour when selecting tenants.

Compliance
Ensuring that your investment property remains compliant with the multitude of rules and regulations is one of the key reasons you enlist the help of a specialist property manager. Compliance entails your statutory obligations concerning items such as documentation, pool safety, safety switches, smoke alarms, curtain and blinds, water billing, tenancy breaches and many more. When selecting a property manager ensure that they are well versed in the legislation in your state or territory and can demonstrate the process they use to ensure your investment stays compliant.

Routine Inspections
Routine inspections involve your property manager attending your property to complete a thorough inspection and provide you with a written report. We suggest selecting a property manager that gives you the option of the frequency in which you would like inspections carried out. For example if you own a unit with long term tenants you may be happy with 6 monthly inspections as opposed to a house with new tenants which you may prefer to have inspected more frequently. Your property manager should be prepared to adjust their fees subject to the services they provide you. One of the biggest areas of disgruntlement for property investors is failure on the part of their property manager to carry out an effective routine inspection. All too often we see property managers fly through properties in 20 minutes, take several broad photos and repeat the same words in every section of the report - “clean and tidy”.


Routine inspections offer the property manager an opportunity to take a close look at the condition of a property and provide feedback to the tenant and landlord as to the ongoing maintenance issues. If tenants are not maintaining the property to an acceptable standard they should be asked to carry our regular preventative maintenance on items such as yards, shower recesses, kitchen appliances etc. to avoid what will otherwise be a massive issue when they vacate. Property owners should also be encouraged by their property managers to carry out regular maintenance works on their property to retain tenant appeal and improve the overall value of their asset. Out of fear of creating conflict and more work for themselves, property managers will often skim over maintenance issues which only escalates the problem further down the track.

Maintenance
A good quality property manager will have an efficient maintenance management system and a network of qualified tradespeople who can address any issue promptly. The quick resolution of any maintenance issue mitigates further damage to your property whilst at the same time keeps tenants happy.

Market Knowledge and Investment Smarts
When selecting a property manager favour those that have a high level of experience not only in property management but just as importantly those that understand the drivers behind what constitutes a good investment. Your property manager should be providing you with regular rental reviews and offering sound advice on how you could improve the performance of your investment. A good place to start is to seek out a property management company that is operated by property investment specialists.

I hope this list gives you further context next time you’re searching for a quality property manager.

If you are currently searching for a new property manager we would love to hear from you. Zuu Property is your specialist property management company providing ongoing management of your investment to the highest standard. Zuu’s personal, investor centric approach to property management will ensure your investment continues to perform both in return and capital growth. Property management is not our "side business", Zuu Property are specialist in the development and management of property investment portfolios - it's all that do.

Don’t pay more than you have too. Zuu Property’s service model means that you only pay for the services you need, not the ones you don’t – this could save you hundreds of dollars a year.


If you would like to chat with a Zuu Rental Specialist you can visit our website or email info@zuuproperty.com.au or call us anytime on 1300 991 475.

Feel free to continue the discussion at our Facebook Page or community group Property+Finance Jungle.

Happy Investing! 

 

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