Before you choose who will look after managing your investment property for you, you should send them the following list of questions. And compare their answers to ours.
Does the agency have a dedicated rental department and how many staff will be looking after your property?
Many agencies see property management as a “poor sister” to the more glamorous sales department. Some even leave the management of client’s assets to the front desk staff and receptionists. Ensure that your agent has a dedicated property management department.
At Investors Direct Property Management we have a dedicated property management department specifically created just to service our clients. It’s quite a different concept to the usual real estate agency model. Our focus is on providing superior service to our already established client base – not the general public.
Is a director/owner of the agency involved in the day to day management of the property management department?
It is rare to find an agency where the director has an active involvement in the property management department and will take the business of property management more seriously.
Our department head is very “hands-on” – just as she was when she owned her own business. Jan worked with the property management team to ensure her landlord clients were being looked after. As a result she grew her rent roll to almost 1,000 properties because of the service that she continued to provide. This is her goal too now here at Investors Direct.
How many years has the property manager looking after your property been working in real estate?
Remember this relates to the property manager and not the agency. Going to a brand name agency doesn’t mean their service is going to be any better. Many people start their career in real estate as receptionists and then move up to the property management department and some of the top performers move into sales.
Yet some individuals choose property management as a career and this is the type of person that should be looking after your property. They should preferably have at least 4 years industry experience. By comparison, the average experience of our property management team members is 25 years! So we are all very aware of the responsibility of managing property.
We have as our head of property management the former National Property Manager of the Year. We have a huge background in property management and we still actually love it.
Does the property manager give you a written proposal?
Some property managers just go out and look at your property and say “OK we’ll put it on our books.” You should look for someone who has put in the time and effort to present a professional image to you and who gives you a written proposal. If they make the effort to present their services professionally to you it is likely they will look after your property professionally also.
Every investor who is a client of Investors Direct is given a written management proposal. This is your ‘guarantee’ that we are prepared to put everything we will do for you in writing.
What geographic area does the property management service cover?
While you could look for a property manager with expert local knowledge, consider what your property portfolio may look like in a couple of years’ time. Will you own a number of properties spread throughout the suburbs? You could either employ a specialist property manager in each geographic location or you could instruct a large property management company that covers a larger geographic area and has complete client focus.
Australia is now following the overseas trend in the formation of agencies that are solely dedicated to property management and cover a larger geographic area. With the advent of internet advertising and electronic banking, these “super offices” no longer need to be located in the local shopping strip to manage your properties. Many professional property investors are turning to this type of asset manager who will be able to look after their entire property portfolio.
Our clients have property all over the metropolitan area, but specifically in the locations where I.D. build property. We aren’t going to the general public but will operate a property management department dedicated to our established clients. Technology allows us to manage property almost anywhere in the metro area – it’s a much more professional approach to property management as its more client focussed. We have a real understanding of what customer service really means and we don’t sell real estate, we provide everything needed for the professional investor/landlord.
Does the Property Manager hand out keys or do they attend property inspections with prospective tenants?
If the Property Manager you are considering just hands out the keys and lets the tenant inspect the property on their own, move on to another agency. Too many things can go wrong with this approach and the security of your property is compromised.
At Investors Direct, we never, ever give out keys for any rental property! We inspect your property in person with the prospective tenant so that we have a better opportunity to promote your property as well as a chance to get to know the tenant a little better. Sadly handing out keys still happens with some agencies and we cannot understand why a business owner allows this to happen because: (a) the security of future tenants could be compromised (b) the security of the property is at risk (c) you can’t ‘sell’ a property to a tenant from behind a desk!
How many properties does the manager look after?
A property manager who looks after too many properties may not have time to devote proper attention to your property. Some busy agencies have 250+ properties per property manager. In general this is far too many to give your property individual attention.
At some boutique agencies each property manager looks after approximately150-200 properties. While these agencies may charge a little more for their property management services, landlords find this extra expense translates to a trouble free investment that often produces a higher return.
Our aim is to have portfolios of 150 properties per head of staff. This may mean a property manager will be responsible for 150-200 properties but will have an administration assistant to allow them to concentrate totally on managing the property without having to do all the paperwork.
Do you have staff available to show my property to prospective tenants 6 days a week?
The hectic pace of life and the advertising of rental properties on the Internet 24 hours a day means a good property manager must be available to show prospective tenants your property when it best suits the tenant.
We aim to have Open House appointments once during the week and then on Saturdays, but we will still be available during the week should tenants require another inspection time. Our aim is to rent the property in the shortest possible time to the best possible tenant.
Do you have a system for checking prospective tenants with regards to credit worthiness, past rental history and their current employment?
Ensure that your property manager subscribes to a major tenancy database and screens all prospective tenants carefully. We have membership of TICA (Tenancy Information Centre of Australia) which is the largest database in Australia– also covers New Zealand and the U.K.
We wouldn’t consider an application without processing through TICA first. We have a comprehensive application form, that requires a 100pt checklist, verification of employment or income; 2 previous rental references; 3 personal references; next of kin; driver’s license or photo I.D.; car registration; and a personal conversation with every potential tenant.
Do you have a system that daily checks rental arrears and takes the appropriate action immediately?
A good property manager who uses electronic funds transfer methods for rent collections and up to date computer systems should be able to monitor rental arrears daily and minimise late rental payments by regular communication with tenants by phone, letter, email and SMS.
We use Console, one of Australia’s leading computerised management systems specifically designed for real estate agents. Arrears are checked daily without exception and notices served as allowed by legislation. We have an arrears process of SMS, letters, phone calls to ensure we receive payment. Collection of rent is a priority and we have a Zero tolerance policy towards rental arrears.
The more reference checking done with any application will assist in keeping arrears at a minimum so any Property Manager who has an arrears problem may not have properly checked the application form!
Will you go to court for me if need be and what is your success rate for previous appearances?
Unfortunately you just might have to go to the tenancy tribunal to protect your rights as a landlord. If this happens you will need an experienced property manager to represent you as tenancy laws have become quite complex. We would certainly appear at the Tribunal/VCAT if necessary.
In our past agencies we would only have attended the Tribunal two or three times a year as our focus was on finding the best tenant, thoroughly checking their references and making sure they understood our zero tolerance attitude to arrears. The Tribunal is not a nice place to be in so we made sure we didn’t have that experience any more than absolutely necessary. Mediation was also used as a measure to obtain a positive outcome.