What to Ask to Qualify a Property Manager 

 

 

 

 

 

 

                                    SHOPPING FOR A PROPERTY MANAGER?

                                    ASK THESE QUESTIONS AND COMPARE ‘APPLES TO APPLES’!


1. Are you the person who will be managing my property?

It is becoming common practice to engage a Business Development Manager (BDM) to support the ongoing growth of a rent roll within an agency. The BDM’s role is to introduce their company for property management services to you and guide through to engagement of their service.  Whilst it appears a well groomed introduction and you have built your rapport with the BDM it is not the BDM who is likely to be managing your property. So who will be looking after your property? We have provided a sequence of relative questions to become familiar with the person that will be handling your property and tenancy matters and their professional experience within the industry.

– Are you the person who will be looking after my property?

– How long has the property manager been with the agency?

– How long has the property manager been involved in property management?

– How long has the property manager been working in the local area?

2. How is the property management team supported?

The structure of a property management team and portfolio is evolving. Some agencies have one Property Manager looking after a specific portfolio (generally 80-120 properties pending property type and geographic location) and other offices are set up to be task based with a Senior Property Manager overseeing the team. Ask such questions as;

– How many properties does the property manager look after?

– How many properties does the agency have under management?

– Is the property manager my one point of contact for all property and tenancy matters or will I deal with a letting agent or routine inspection/maintenance manager during the course of a tenancy?

– What happens if my property manager goes on leave? Who will oversee my property during this time?

3. How will you market my property to attract new tenants?

An effective marketing strategy to present your property professionally to the rental market and the flexibility in showing your property to prospective tenants is an important question. The agency should have a clear strategy for how they will market your home which may include;

– Electronic mail out to agency database

– A ‘For Rent’ sign positioned at the front of your property

– Internet advertising on real estate specific websites ie; realestate.com.au & domain.com.au

– Social Media Posts

Whilst appointed inspections are best it is understandably a safety aspect for inspections to be made with multiple people via open house inspections. Flexibility in viewing times is important with many prospective tenants not able to attend day time viewing due to work commitments. Keys should not be handed out to prospective tenants to view the property on their own. Additional questions you may want to pose are;

– How does a prospective tenant arrange for an appointment?

– How flexible are viewing times and will you show the property after hours and over the weekend?

– Will you hand out keys to a prospective tenant for them to view the property on their own?

– Are there additional charges for advertising and marketing?

4. How do you screen applicants?

Your property manager is going to want to select the most suitable tenants for your property. Simply they will not want any potential problematic tenant as much as you. Your property manager will have a thorough screening criteria in place based on the information that is provided to them by the applicant. Although all due care will be taken to screen your approved tenant during the application process, you cannot foresee the future. For this reason it is essential for landlords to take out a landlord insurance policy.  Your agent should include the following personal and professional checks to;

– Verify the applicant’s identity with photo ID.

– Confirm the applicant can prove their ability to afford the rent.

– Check rental history with current & prior landlords/agents.

– Check names against a national tenant default database.

Based on the information being checked, you should be consulted for final decision for tenancy. Upon a tenant being approved an agency will have a procedure for acceptance. Relevant questions to ask;

– Do you have the final decision on accepting or declining tenancy?

– When do you stop showing my property for rent?

– What is your process and time frame to secure the approved tenancy?

5. How often do you inspect my property?

Regular inspections should be carried out to monitor the condition of your property throughout a tenancy. Inspections should include a thorough walk through the property inside noting the condition of fixtures and fittings within and a walk around the property to look over the property exterior and lawn and garden care. Questions to consider;

– How often do you carry out routine inspections?

– Will I receive a property inspection report?

– Is there an additional fee for routine inspections?

6. How will you handle maintenance at my property?

The PO Form 6 appointment of a property agent (management agreement) will outline the manner in which your property manager can act on your behalf when arranging for maintenance and paying invoices on your behalf. Your agency will have a list of qualified and licensed tradespeople they engage on your behalf to attend to maintenance required however you may have your own preferred qualified tradespeople to contact. As a courtesy at minimum your agent should notify you of the maintenance required/requested so you can make allowance for the adjustment to rental funds being paid out to you at month end.

– When will you contact me when maintenance is requested or comes to your attention?

– Do you have procedure for checking maintenance?

– Can I use my own tradespeople?

– Do you charge for arranging maintenance and minor works?

7. What happens if my tenant doesn’t pay rent?

The agency will have policies and procedures in place to ensure rent is paid to you. In the event rent continues to go unpaid your property manager should contact you to discuss tenancy default options with you and seek your instruction for progressing these matters. The agency may charge additional fees for tenancy default procedures. This scenario poses the following questions to ask your potential property manager;

– What is your rent default procedure?

– Has your property manager handled insurance claims for tenancy default?

– Has your property manager been to the Tribunal before for a tenancy default claim?

– What is their ‘success’ rate at Tribunal?

– What are the agency fees for your property manager to make an insurance claim or Tribunal claim on your behalf?

– What are the fees for your property manager to act on your behalf at a Tribunal hearing?

8. What are your commissions, fees & charges?

This is the foremost question asked when shopping for a property manager. Whilst being important and relative to maximising your potential rental income and cash flow it is also just as important to know what is actually being covered. Lower fees may appear enticing but are they reflective of the level of service you might experience, inclusive of all property management tasks (ie: lease renewals, routine inspections) or will service fees be charged separately? Your property management fees ae tax deductible.  There are 3 main fees that will be presented to you to;

– Management Commission = a percentage of the weekly rent and should include 10% GST when being quoted

– Letting Fee = charge to tenant your property

– Administration Fee = a set fee for administration costs

Additional fees could be incurred for the following; advertising | routine inspections | end of financial year statements | lease negotiation & renewal | maintenance & minor works

– Can I have a schedule of all commissions, fees & charges?

Sequence of questions that you might follow with;

– How often will available rental funds be paid out to me?

– Can I have rental funds paid into my nominated back account?

– If needed, can I have an immediate transfer of funds to my nominated account?

9. How will you assess the rent for my property to ensure I am receiving the maximum potential rental income?

This is a great question to gauge your potential property manager’s local knowledge, current rents in the area and market trends. As rents and trends fluctuate at various times throughout the year a great property manager may give you a guide for rental price, but will not be specific until an inspection of the property has been carried out and a comprehensive market analysis carried out. Ask your potential property manager;

– What factors will you take into consideration when appraising my property for rent?

– How often will you review the rent for my property?

– Will you consult with me before adjusting the rent for my property for tenancy renewals and setting the rent for upcoming vacancy advertising?

10. Why should I choose you/your agency for property management services?

Get an understanding for what your property manager sees as their own and their agency strengths in providing you a professional and committed comprehensive property management experience. What makes them stand out and what gives you the reassurance that they will be committed in delivering on the service they promise.