Once you’ve purchased your investment property, there is still one key decision left to make before you can sit back and relax.
Will you manage your own rental property? Or, will you hire a property manager to take care of it all?
Once you become a landlord, there are countless responsibilities to uphold which can become overwhelming over time. Fortunately, getting a property manager on board can help alleviate some of the stress.
Find out how a property manager can help you, how to select the right one, and why a property manager is beneficial.
What is a property manager?
As the name suggests, a property manager is responsible for managing rental properties on a day-to-day basis on behalf of the landlord.
Essentially, a property manager oversees the rental property so the landlord doesn’t have to.
What does a property manager do?
Some of the primary duties a property manager will undertake include:
- Finding and evaluating suitable tenants
- Preparing tenancy agreements
- Carrying out regular inspections to ensure the tenants are taking appropriate care of the property
- Arranging any repairs or maintenance that must be complete
- Collecting rent and ensuring the tenants are paying the correct amount at the right time
- Managing tenant relations and handling disputes if they arise
- Paying council rates and other bills
- Providing the landlord with notices and financial statements
- Issuing termination notices to tenants
- Providing market advice and updates e.g. rental increases
An experienced property manager will handle all these obligations thus making the landlord’s life easier.
How to select a property manager
Before you go ahead and choose the first property manager you find on Google, there are a few things you may want to consider. After all, you can’t just have anyone manage your investment property - the right property manager can mean the difference between a hassle-free experience and an unfortunate one.
Look at the local options
Find out which property managers or companies operate in your area. A local property manager will have knowledge with the local rental market and could have a good relationship with trusted tradies - a big advantage in the long run.
If you have a spare half hour, conduct a Google search and read some reviews to get some honest opinions from other investors. Just remember to take each review with a grain of salt.
Websites such as Domain, realestate.com.au, and rent.com.au all have online tools to help you find property managers around the country.
Find out what services they offer
Not all property managers will offer the same services. Make sure to find out what services will be included and excluded to determine whether the property manager ticks all the right boxes.
Communication style
Ever heard of the saying “communication is key?”
Even though a property manager takes care of most of the work while the landlord steps back, communication between the two parties is still important.
A property manager must be able to effectively communicate with you and always keep you informed with any updates. Further, they must be easily reachable.
Compare fees
During the screening process of your potential property manager, ask about their fees.
The typical fees usually charged include management fees, letting fees, and other fees e.g. lease renewal.
Once you’ve gathered the necessary information, compare the cost with other property managers in the local area to find out who offers the best deal.
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Questions to ask a potential property manager
To help narrow down your choice even further, asking your prospective property managers the following questions could be a good option:
- How long have you been working as a property manager?
- How many properties do you manage?
- How often would you inspect my property?
- What is your process for choosing a tenant?
- Have you ever had disputes with tenants? If so, how did you deal with them?
- Will you check repairs after they’ve been fixed?
- If a tenant is late with rent, how do you handle that?
Of course, there are plenty of other questions you can ask a potential property manager to ensure they’re the right fit for you. However, these are a great starting point.
The benefits of using a property manager
Below are some of the important benefits landlords can gain when appointing a property manager for their investment properties.
- Tenant retention: Happy tenants are more likely to want to stay and renew their lease which in turn, lowers the risk of lost income for the landlord. Tenants are typically happy when their requirements or requests are dealt with promptly - a good property manager will handle this accordingly.
- Less stress: As the property manager is handling the rental property for the landlord, they do not have to worry about a thing.
- Understand legal requirements: Property managers are across constantly changing legislative requirements. If any legal issues were to arise, they are armed with all the knowledge needed to protect the landlord from lawsuits.
- Market appraisal: Figuring out the correct rent for a rental property can be difficult, but it doesn’t have to be. Property managers have access to industry data that can help them calculate the ‘sweet spot’ for rent. Putting up rent too high could result in a high vacancy rate.
- The middle man: A property manager is the middle man in the relationship. They have strong communication skills and experience to maintain a professional arms-length relationship with the tenant.
- Avoid unpleasant tenants: No one likes to deal with confrontation - with a property manager, a landlord won’t have to. Property managers have specific screening methods for tenants that allow them to find high quality candidates. However, if any problems were to arise, the manager is the buffer between the landlord and the tenant - they don’t have to deal with any disputes.
If you’re thinking about buying an investment property, have a chat with one of our friendly lending specialists today to see if you qualify.
