Whether you are an accidental rental property owner or planning to make it your main source of income, you will sooner or later face the need to choose a managing agent for your property. Unless you want a full-time job or enjoy being an entrepreneur yourself in this particular business area, you will have to delegate this task to professionals. Choosing a good property management company is a sensitive matter. This is like choosing a nanny or a good school for your child. On one hand, you are entrusting those people your precious property and need to know how much you can trust them. On the other, this is just a business deal; so if you do your due diligence well enough, you should be fine.
For starters, it would be a good idea to ask them how many properties they manage, how long have they been doing it and if they own any rental properties themselves? This will give you an idea about their competence and experience.
So what are some other things to which you need to pay attention when you choose the right managing agents for your property?
How they are planning to market your property?
If the rental management company does not have their own resources to advertise your property for free or substantial expertise in this area, it’s definitely a red flag. It means that the entire burden of searching for new tenants will fall on your shoulders, turning this passive source of income into a very much active job for you. So look carefully into this when you are choosing a management company for your rental property.
Communication with the owner
Communication is a very important aspect. Starting from the manner in which they speak to you in, watch for interruptions and pushy manner. Do they let you finish your sentences and listen carefully and respectfully? Or do they act overly confident and try to cut you off whenever you raise a concern. This is pretty much how your future relationship will go. You also need to make sure that they return your messages and are available whenever you try to reach them. You should also discuss with them specifically what type of questions they resolve with the tenants themselves and in which ones they will involve the owner. You don’t want to baby-sit them on every little question, but serious issues should always be discussed with you.
One of the most important questions to discuss with your prospective property management company is their fee structure. Make sure to do your homework and find out the current market rate. You need to know how much you will be paying them for their service.
You should always discuss with them the policy regarding maintenance expenses. Since you don’t want to be involved in every little matter, you need to authorize a certain spending cap under which they can make a decision about replacement purchase themselves. For any large purchases, they should get your prior authorization and you need to have a say in the choice of equipment, etc.
You should discuss with the management company what their property inspection policy is. If they say that it’s twice a year, it sounds realistic. Furthermore what type of reports do they provide post the inspection? Any promises for more frequent inspections are likely a marketing pitch; so you should feel wary. You should also discuss what their policy is if the tenant leaves your property in a dreadful condition after vacating it. That way you will have an opportunity to decide whether their policy works for you or you need to continue looking for another manager.
Their policies regarding rent collection
First of all you need to figure out what their policy is regarding rent collection, is it online? is it via direct debit or bpay? what is the expected time between rent collection and sending that rent to you. One thing is when they guarantee to compensate you within the same month; another is when there is a month lapse between these two dates. Another important thing you should discuss with them is their policy regarding debt collection. If this is an experienced professional management company, they should have established policies regarding submitting outstanding debts to debt collection agencies. If they don’t do this, keep in mind that this will be your responsibility and ask yourself a question about whether you are ready to deal with it.
Ask for references
Make sure to get references from both property owners and tenants. And then follow through and call them. If you talk to both sides you will get a better picture of how they handle the process and whether you feel comfortable with this.
In any case, make sure to listen to your gut feeling on this and read the contract carefully before signing it.
If you’re keen to discuss your property needs, sick of bad property management do give us a call!
Martine, Randal & The team at Think Property & Co
18 Little Oxford Street, Collingwood, Australia, 3066
+61 3 8320 6399 / firstname.lastname@example.org