When it comes to investing in real estate, the greatest fear after buying the wrong property is selecting the wrong agent to manage the property. Many investors have found that it is better and safer to actually self manage their property. However, this is not always a practical solution for investors, and therefore finding the right agent is imperative.
The success of an investment property is largely dependent on the property manager. The market conditions may rise whilst you own the property, but if the tenants are constantly in arrears and flee with rent owing whilst the condition of the property deteriorates due to neglect, the success of the investment will be diminished.
A pleasant gain is turned into a painful lesson.
Salesperson or Property Manager
Selling a service and managing a property are completely different skill sets. It is common for many firms to hire a salesperson to sell the agency’s property management service.
Many people understandably but mistakenly put confidence in the sales person they sign the management agency agreement with. It is often only later when something goes awry that the landlord discovers that their investment property is actually being managed by a different person in the firm.
The person that made the promises and offered the assurances is paid a commission for making a sale and then they move on to another sale.
When interviewing agents, if a property manager does not seem overly dynamic, be careful not to rush to assumptions. Remember, you are looking to hire a diligent property manager, not a salesperson. The best property managers have a different skill set to salespeople.
Happy Clients, Communication, Arrears and Condition Reports
The best property managers can be identified by their track record. Indeed, a property manager should be selected by their track record and less so by promises and inducements.
To get a gauge of the property managers track record, ask to speak to past and/or current landlords. Most landlords are happy to offer feedback on a firm’s service.
When you get to speak with landlords of the shortlisted firm, focus on three aspects of the service. communication, arrears and condition reports.
A Good Property Manager
When it comes to investment properties, “a stitch in time saves nine”. A good property manager will be on the front with maintenance issues.
If tenants know that both the landlord and the agent are vigilant about maintaining the condition of the property, they are more likely to treat it well too. A property manager’s vigilance in this area is only worthwhile to the degree that the landlord supports them.
A landlord that constantly resists minor maintenance has to accept the consequence if their renovated investment property becomes a neglected shack.
Landlords are well advised to remember that the rent will only keep pace with market growth if the condition of the property is maintained.
The best Property Managers are well informed on legislative changes. The law is constantly changing, particularly during COVID. The best property managers ensure that they communicate these changes quickly and clearly explain how they may practically impact on a respective landlord.
In your search for the right property manager, look behind the glossy brochures and aim to select the person that will manage the property right.