How to choose the right property manager
For most people, there will be no bigger financial commitment in their lives than owning property. Once you've made that commitment, you're going to want to do everything you can to protect your investment.
Bringing in the services of a professional property manager might be your best option.
While there are plenty of benefits to being a residential or commercial landlord, the everyday ins and outs of maintaining all aspects of your investment might seem like a bit much to take on, particularly if your property portfolio is a secondary income source after your regular occupation.
If you aren't keen on taking charge yourself, that's when bringing in the services of a professional property manager might be your best option. And a popular option it is – the Real Estate Institute of Australia says over 54 per cent of all rental properties in the nation are currently benefiting from the expertise of a property manager.
So how do you know which property manager to choose? Like any comparable industry, each individual or organisation is going to have their own way of doing things. That said, there are several dos and don'ts you should keep in mind when weighing your management options.
What you need to know
You should never just hire the first property manager you find from a Google search. There are important concerns relevant to every rental property, and you may even have a few specific requirements that need to be met. Here are some examples of the most important questions you need to be asking a prospective manager.
Industry and area knowledge
Probably the most important aspect you will be looking for in a property manager is a high level of knowledge, experience and expertise. If you've just purchased your investment property through a buyer's agent, then you'll likely know what a high level of professional service looks like, so you'll want the same from your management.
Speak to any prospective investment property managers about their other current clients, and their knowledge of the rental market in the same or adjacent areas to your asset. If they have a wealth of experience in your particular suburb, then you can mark that in the positive column when it comes time to choose.
Tenants should be afforded the same level of respect and privacy that you would expect in your own home.
Advertising and vacancy filling procedure
IBISWorld's Residential Property Leasing and Management in Australia report from June 2015 found that Australia is home to some 6 million residential renters, so reaching out to such a huge number of prospective tenants can be a massive job. The vast majority of rentals are now advertised online, whether through an agency's own website or outlets like Gumtree, and understanding how to attract the most attention is crucial.
When you're browsing for property managers, the simplest thing to do is take a look at their other listings online. Pay attention to how they promote their rental properties – everything from descriptions, photos and their response to enquiries can give you a good idea about what kind of manager they will be.
Tenancy and maintenance management
Being a landlord means you have certain responsibilities, first and foremost to your tenants. It doesn't matter whether your rentals are residential, commercial or even a mixture of both – keeping your tenants satisfied, while still being firm when you need to, is a huge part of investment property ownership.
When you speak to property managers, find out as much as you can about their regular lessee servicing, as well as how they handle emergencies or troublesome tenants. While a house may belong to you, it is probably going to be someone else's home, at least for a while. As such, tenants should be afforded the same level of respect and privacy that you would expect in your own home.
That said, being completely hands-off can also be fraught with perils. Each state in Australia has its own tenancy laws that a property manager should be well aware of, so ensure they will carry out the necessary inspections (up to four times a year in NSW, while only two in Victoria), are available to deal with regular maintenance promptly and will be generally available for tenants to air any grievances they might have.
As well as being fair, a good property manager will occasionally need to be tough. From chasing down wayward tenants for late rent right up to issuing evictions, you need to know they have the ability to get the job done, in good times and in bad.
What you shouldn't be concerned about
As you've probably gathered by reading this far, there's a lot to think about when choosing an investment property manager. However, not everything needs to be so carefully considered. Here are a few examples where it pays not to overthink your decision.
Like any service, property management isn't without a financial cost. Usually a property manager's fee will be calculated as a percentage of your investment's rental price, so how much you will end up spending will depend on each individual asset. Therefore, if you are renting out a luxury apartment in the heart of Melbourne's CBD, or premium office space overlooking Sydney Harbour, expect to pay more than you would for the management of a single unit in the outer suburbs.
There's a lot to think about when choosing an investment property manager.
Like you did with the advertising procedure above, researching a property manager's fees can start with taking a look at other leases on their portfolio. You will likely find that certain agencies specialise in exclusive or luxury rentals, and will end up costing you more. That's not a signal that you should look elsewhere though, as the higher price should translate to a more premium service, both for you and your tenants.
Size of agency
In real estate, as in so many other industries, bigger doesn't necessarily mean better. Choosing a huge agency that manages hundreds of properties might seem like a smart move – with that massive client base they must be experienced and well connected. However, with such a large number of assets under their umbrella it's not unreasonable to assume that individual properties could get lost in the shuffle from time to time.
With that in mind, going to a smaller boutique agency isn't without its potential problems either. It's possible that just one or two issues could quickly pile up on just a handful of property managers, to the point where resources are stretched so thin that your properties aren't given the attention they deserve.
Your best option is to be thorough in your research, ask the right questions and make a judgement based on what you find out. For some people, the security of a large agency will be preferable, while for others the bespoke care and attention of a smaller operation will be the right fit.
Why Cohen Handler?
At Cohen Handler, we focus exclusively on buyers and property owners, with the singular vision of generating the most profit from your investment. Rather than having a template approach to property management, we work with our clients on a case-by-case basis, delivering the best service possible for each person individually.
As Australia's leading buyer's agency, with offices in Sydney, Melbourne and Brisbane, you will benefit from years of experience in the real estate industry from our specialised team of carefully selected experts. Our buyer's agents and property managers will work tirelessly in service of you and your asset, protecting your investment and delivering the greatest possible returns.