A property manager is an important person to have on your team, because they can make sure your property investment performs well. This is why it is essential that you choose the right person for the job. So, how do you do that? By interviewing potential managers and asking the right questions.
Here are 7 questions to ask a potential manager (and why they are important). Their answers will help you decide if they are the right manager for your investment.
1. How many properties do you manage?
The answer to this question will determine how efficient your manager will be. Too many properties on their rent roll may cause issues to go unattended. A property manager can manage up to 80 properties at one time, so any more than this is a red flag.
2. What is your management fee?
The current management fees range between 7% and 11% for long-term tenants, and up to 20% for short-term vacation management. The fee will vary based on the amount of services offered by the agency as well as the level of experience of the manager. Remember to not just consider fees, but also contract flexibility. You want to be able to terminate a contract if your circumstances change or if the manager is not the right fit.
3. Are there any additional fees?
Some fees are additional to the management fee, such as advertising, leasing and maintenance. All of these additional fees are tax deductable and possibly negotiable, depending on the services offered. For example, advertising may be included in the management fee if the manager is using an online platform such as Airbnb for short-term rentals.
4. How do you select tenants?
Both long-term and short-term tenants require a background check to ensure they are reliable to pay rent and of good character to respect your property. Long-term tenants can be checked with their previous tenancy records, professional and personal references, payslips and the national tenancy database. Short-term guests are checked with their previous accommodation history, reviews, social media and identification.
5. How do you manage late rent payments?
This is an essential responsibility of every property manager, who must be proactive in these situations. For example, have tenants pay rent by direct debit and follow-up with defaults in a timely manner. All payments must be managed through a trust account by law, so make sure your manager is a registered agency as their trust accounts are regulated by the office of fair trading.
6. What is your maintenance process?
Another important responsibility of every property manager, is to inspect your property regularly and attend to maintenance and repair issues. Property inspections have several additional benefits, including regular contact with tenants for open communication, rental assessment to ensure you are getting the best rent and of course maintaining your property to maximise rent and increase value.
7. How do you manage vacancies?
A good property manager understands how important it is to minimise vacancies, in order to maximise rental income. This might include contacting tenants ahead of end of lease to ensure they are renewing and/or advertising the property for rent well ahead of time. With short-term vacation rentals, minimising vacancies require a different strategy which might include ensuring your listing is at the top of search results for maximum exposure to potential guest
As you can see, choosing the right property manager is about more than experience and fees. Your property manager has to be a fantastic communicator, have established processes and genuinely love what they do.
A manager who attends seminars and continually updates their training and knowledge, is a manager who takes their role seriously. Better still, perhaps they are property investors themselves and understand how important their role is to the success of your property investment.
The last nugget of advice we can give, is remember to check reviews on google. Nothing beats testimonials and experiences of satisfied clients and tenants. Check-out Airtrip on google, we have a 4.7 star rating (and very proud of it).
If you are interested in a quick discussion with one of our local and experienced property managers, please get in touch and we can go through and answer all of your important questions.
