You might be frustrated with your existing agent and looking for a change OR you’re renting your property out for the first time and you need to choose a Property Manager… either way, how do you know who is right for you?
BEWARE! Choosing the wrong Property Manager will cost you time, moneyand stress! However, we have a method to help you make the right choice. By using three key criteria to assess the suitability of your property Manager, you can feel more confident in your choice and the security of your investment.
1) KNOW WHAT YOU’RE LOOKING FOR
Often when I speak to potential clients, they haven’t thought about what they need from their property manager so they look to have two classic boxes ticked:
A person they like and got along with
An agency with the most competitive fees
Unfortunately, this is not enough!
Are you a hands-on landlord or do you want a hands-off, set-and-forget style service?
Do you understand and agree with HOW the potential property manager will manage your property?
What processes do they have in place for ensuring that things run smoothly and can they articulate this to you?
Understanding what you want to get out of the service, will give you a clear indication of the questions to ask and fees you should be paying. For example, if you’re very hands-on, make all of your own decision and coordinate maintenance, you probably don’t need to pay a premium as you’re effectively just paying someone to report to you and collect your rent.
2) GET TANGIBLE FACTS AND PROOF OF RESULTS
It’s an age-old story that, in the initial meeting, the company representative said they would do a whole bunch of things that didn’t happen and this leaves owners frustrated and out of pocket.
Just because someone says they will do something, doesn’t necessarily mean it will happen. Requesting, observing and understanding the evidence of performance can help you to assess early on whether a Property Manager is as good as promised.
Has the company you’re dealing with said what they were going to do so far (returning phone calls, delivering information with a promised timeframe etc)? If not, there’s a good chance that other promises might not be kept either. Ask for clear time frames so you can measure accountability.
Do they measure Key Performance Indicators and can they show you where these are tracked and their performance? If no, how can they possibly tell you they do a good job when they don’t track their performance?
What is their retention rate for clients? Have they lost more than 10% of their rent roll in the last 12 months? If they have, but they have told you they’re amazing, why are their clients leaving?
Do they guarantee their service and how? And if you’re not happy later on, are you happy with this as a guarantee?
By seeking tangible facts and results, you can make sure you get what you’re paying before you start paying. Instead of smoke-and-mirrors and a verbal promise that you can only trust and hope they deliver on.
3) YOU GET WHAT YOU PAY FOR
You would never walk into Mercedes and expect to purchase a car for the same price as a Hyundai, however, it is a lot easier to differentiate quality between two products that it is to differentiate two services who promise the same things.
In the property management industry, the same “paying for quality” rule applies. However, the concept of “quality” can seem less tangible because you’re purchasing a service, not a product. Unfortunately, there is little accountability in the industry so owners can often be caught out with promises of a premium service, which are ultimately not fulfilled.
Essentially, the less you pay the less you get.
If you’re expecting a premium service but are paying low fees to your agent, this will end up costing you money. Your agent either won’t be able to sustain providing a premium service at a low rate or you will receive inadequate advice that will affect your return on investment.
To help make this more tangible for you, imagine your property is vacant.
Agent 1 charges you 10% + GST of the Rent Collected.
Agent 2 charges you 7% + GST of the Rent Collected.
Finds you a good tenant in 2 weeks for $400 per week and the tenancy runs smoothly for 12 months with little hassle.
Finds you a tenant in 6 weeks for $400 per week. The tenant ends up abandoning the property after 6 months. You then incur another 4 weeks vacant and paying yet another letting fee (usually 1 weeks rent + GST).
Your net annual return:
Your net annual return:
Of course, if you follow only one of the rules (for example, rule three) and just choose the Property Manager with the highest rates, you might still end up disappointed. However, when you apply all three rules to your search, you will not only feel more confident and empowered as an Owner but are more likely to get better returns, a smooth and professional business relationship and over excellent results. You are also much more likely to be able to avoid the stress and frustration of trying out multiple agents before finding the right one for you.
If you liked our information and advice and want to know more or would like to talk to us about how we can help you get the best return on your investment possible, give us a call or send us a message! We’d love to hear from you.
Don’t forget! If you have a friend or family who may be interested, refer them through to us! If they become and an Excellent Owner, we will give you $200 cash!