Beginner’s Guide to Investing
If you’ve made the leap and purchased an investment property, the next step is learning how to manage it. And there is plenty to it. From finding tenants to chasing rental payments and coordinating maintenance, managing an investment property can be a big and time consuming task.
As the owner, you have two options to consider when it comes to managing your property: managing it yourself, or hiring a property manager to do it for you. It is important to weigh up the facts and consider the pros and cons of each option before making a decision. You can read more about the pros and cons of self-management vs. a property manager here.
If you want the hassle of property management taken out of your hands by hiring a professional to do it for you, read on:
How to choose a Property Manager
A property manager can play a vital role in the rental process of an investment property. The property manager will seek to maximise weekly rental income and source high quality tenants who will best take care of your asset. If you have decided to have a property manager represent you and your property, it is crucial to choose wisely.
Once you have shortlisted a few potential property managers, it is important to meet with them individually to discuss the possible rental of your property.
Questions to ask when interviewing a Property Manager
- Does your agency have a dedicated property management department? Some agencies will view the task of property management as less important than selling and will therefore leave this task up to the front desk staff or receptionists. Find out if the agency is experienced in the area of property management and whether they have dedicated staff to effectively manage your property.
- Is a director/owner of the agency overseeing the property management department? Investigate how focused the agency is on property management. The more important property management is to an agency, the more likely they are to effectively manage your asset.
- How many years of experience do you have in property management? Experienced property managers will be able to attract the best tenants to look after your property and will be best suited to deal with those that become difficult.
- Can you provide me with a written comparison on rental values in the market? An experienced and knowledgeable agent will be able to benchmark comparable rental properties in the market and advise you of the optimal rental return you should receive from your property.
- What is your process for reviewing potential tenants? Find out how they determine whether a tenant is suitable for a property. Do they conduct police checks, or checks regarding their past rental history, current employment, etc?
- How many properties are you managing at the moment? Are they representing many other people, and therefore being reputable and successful? Bigger however is not always better,so it is also important to establish if you will be a priority and get the service and attention required during the property management process.
- Will you go to court to represent me if needed? In the case that you experience difficult tenants, you may need to go to court to resolve certain issues about the bond or other matters. The property manager you decide on will need to be experienced and willing to support you in these times.
- Will you advise me of any maintenance and repairs that need to be made to the property? In particular when non urgent repairs need to be made, make sure they will seek your approval before getting items repaired.
- What are your fees? Enquire about management fees as well as any other costs a property manager may charge. Typical fees you may incur include those related to sourcing tenants, ongoing management of property and monthly statement fees.
- Can I please see some references or contact details of the landlords using your property management services? Find out what level of service was provided to past clients, and check to see if they took care of the landlord and followed through on all which was promised.
Property Management Fees
If you have chosen for your property to be managed via an agent, it is important to understand the fees and costs that are associated with property management. Generally, this monthly fee covers the continual task of property management tasks such as: inspections, rent collection, and being a point of contact for any issues. In some cases, agents may charge additional fees to cover the cost of finding a tenant. Property management fees will vary from state to state, as outlined below.
