- Follow on article from '7 Questions to ask your property manager'
- Don't only rely on fees or likely rental in choosing your agency
- It's actually very easy to change agency if you think there are better ones
In an earlier article, I explained the seven important questions to ask your potential property manager, before you hire them.
As a property investor, your relationship with your property manager and team is going to be crucial. Finding the right one will lower the risk of having bad tenants, and help maximise the return on your investment.
It can also make for a calmer, more enjoyable life, generally.
Sadly, this is not a perfect science. Often, people jump in and choose a property manager based on limited information.
How NOT to choose
As an experienced property manager myself, here are some tips on what NOT to base your decision on…
- The appraised rental price for your property: It might sound odd, but you may not actually want to go with the property manager that is promising the highest rental price. For example, if you were considering three different agencies, and two come back around the same rental price and the third agent is significantly higher than the other two, consider whether this is the right agency for you. Are they trying to ‘buy’ your business, by over-promising and under-delivering? Advertising your property at a too high rental may actually see the listing turn stale, with no prospective applicants wanting to view it. Once it’s been on the market for weeks and weeks, prospective tenants will notice this and dismiss it. They may assume there’s something wrong with the property, meaning it ends up being empty for longer than necessary. And while it’s empty, you are losing rental income. Eventually, the only way to rent it is to offer a very low rental, far lower than the realistic one you should have advertised it for at the outset.
- The management fees: In this industry, as in life, ‘you get what you pay for’. If an agency has the lowest property management fees, then do not expect them to provide much of a service. The checks on the application may not be up to the likely desired standard, and responses to your emails could be slow, if they come at all. If the agency is offering lower fees, then they are probably playing a volumes game, and are carrying a very large property portfolio. It is doubtful if they would have the time to get to everything required in their to-do list. Furthermore, if they rely on low prices to gain business, do you really want them negotiating the next rent rise for you with the tenant?
If you feel your current property manager is not right for you, and you’d like to change, you are in your rights to do so.
Obviously, if you have an issue with your manager, then try to deal with them and sort out the problems.
But should you think it’s time to leave…
Know your rights: if you believe they have breached the conditions of the contract, do not be afraid to contact the Department (in WA this is the Department of Mines, Industry Regulation and Safety) or the Real Estate Institute in your state. They will be able to give you broad advice related to your situation.
Changing property managers is quite easy: all that is required is a signed management agreement, and your new agent should handle the rest, including providing the required notice to your current manager, requesting the transfer of all documents related to your property, collection of the keys and any further paperwork This should including contacting your tenant and ensuring that everything is seamless, and so much more.
May I wish you all the very best on your property management journey, and many successful years of property investment success.