Is Your Property Manager Working for You

There is no question that cashflow is king when it comes to owing a rental property, and for many owners –
the fee schedule is the determining factor when choosing one property manager over another.
We’ve all heard the fuss about finding the best deal on your mortgage, and for those of us that have rental properties, it’s important to get the
best management deal too, however sometimes finding the best financial deal ends up costing us more in the future.

In the world of rush hour traffic, work deadlines and family commitments it’ s easy to forget an investment property, and if you haven’ t
heard from your property manager in a while it raises the question: how has your investment been fairing? And if that’ s
a question you need to be asking your property manager, then maybe it is time to assess if your property manager is working as hard for you
as they used to.

To help you find out if your property manager is protecting your property the way they should we have put together some very easy criteria for deciding if they have been doing a good job or letting your investment plunge into disaster.

1.Rent Hasn’t Risen in 18 Months
If your investment has not seen a rental increase in quite some time, two things could be at work.
The more common reason is that the market could simply be in trouble or this could be the other likelihood for experiencing static rents:
bad property management.
“It amazes me how often landlords miss out on their full rent...Sometimes when we take over management of a property from other agencies, we find that landlords are receiving 10% to 20% less than the current market rent for their properties,”says Marissa Holloway, chief executive of property management specialists, PropertyBEE. Ms Holloway says that one of the most important jobs of a property manager is to negotiate rent. “
A good property manager will be constantly working in a group of suburbs and should know the market rent back to front.
A bad property manager will insist on lower rents.
One landlord we recently came across was found to be more than $6000 out of pocket every year on just 1 property,”says Farmer.
“That’ s an average of more than $100 every week of every year. Imagine what you could do with that amount of extra cash?”

Sam Saggers, CEO of Positive Real Estate, says rents that are below market are particularly common with property managers in regional Australia.
“In regional markets agents with old ideals often are reluctant to push rents up. This is particularly true is your tenants are older members of the community,”he says.

2.Disputes get ugly

“Relationship building with different parties and tenants is the basis of successful property management,”says Saggers.
“You must have a good working relationship with the agent, who must have a good relationship with the tenant.”
The alternative, says Saggers, is to see major problems arise such as non-payment of rent, theft and vandalism. “

There is a saying in real estate:
‘ build the relationship and the conditions become negotiable’ of the most important aspects of a manager
is to ensure their dealings are relationship based.” Problems that arise with tenants can thus often be the fault of a property
manager failing to communicate properly with the tenant. This is especially true if the property is within a cheaper area with a lower socio-economic profile. When this is the case, bad property managers will be reluctant to spend time in these parts of a town or city, lessening their relationship with the tenant.

3.Lacks support

Holloway laments the fact that the property management division of the typical Australian real estate company is the poor cousin of their
sales division.
“Real estate agencies are often owned by sales people who don’ t have the operational management and attention to detail required in property management. The result is the property manager does not get the support, systems and training to help them do a better job.”she says.
Holloway adds that you should be wary of any property manager that is not supported by a network of other property management professionals.
“If the property manager is away, who is looking after your property when they are not?”

4.Excessive repair bills
Acquiring quotes for repair work is a time-consuming exercise and partof the point of having a property manager is to take the work off your hands. Good property managers will know a number of different tradespeople and will have a working relationship with them. They will be able to source you the best deals and will help minimise your maintenance costs.
It may seem like one of the more obvious failings that a property manager could have, but you’ d be surprised at just how bad some property managers can be at it. In extreme instances, property managers have been known to siphon money from their
clients by using fake contractors and then billing the owners for repairs that were never done.
Property managers in far-flung regional areas are also notorious for supplying their
clients with hefty repair and maintenance bills, claims Holloway. “Remember, competition tends to drive prices down.
As there is limited competition in some regional areas and a high need for real estate agents and trades to service properties, you can often pay a premium for repairs and maintenance. The more remote you are the more complicated it can be.”
The best recourse is to get a property manager that has a very large client base. This ensures they have a lot of power when negotiating with trades. The property manager will constitute a large source of potential jobs for a trades person and can dictate a lot of the terms. If they do a bad job, the property manager can take his business elsewhere.

5.Lack of repairs/inspections
Just as an unnecessarily large repair bill can signal a terrible property manager, the opposite is true as well. A generally incompetent or lazy property manager will not undertake regular inspections of the property, allowing potential problems to exacerbate and tenant damage to persist.
“We recently saw this at one of our unit block, taken over by a well-known agency. Once we received the paperwork it became evident that the property manager lacked interest in caring for the property, and was unable to supply inspection paperwork –a big red flag.
If you are not receiving a copy of the inspection report along with well documented photos then that is probably the biggest red flag out there”
says Holloway.

6.Not a property investor
“A property manager who invests in property is worth their weight in gold,” says Debbie Williams, Chief Operations Officer at PropertyBEE, who adds that a sign of a poor property manager is one that has little knowledge of the concerns and frustrations of owning a property that is often in a different town or city from you. “
A great property manager should be a key to helping you create a more profitable future. With property investing you surround yourself with good people who you know will look after the detail so you can keep focus on the big picture of finding profitable deals, balancing cash flow, loan gearing and borrowing capacity.
”So If you are feeling like you now have more questions than answers then that would be a sign that your property manager is not meeting your mark, but where to go from here.

Well our friends at PropertyBEE have given us their TOP TIPS for Changing
Property Managers:

The True Cost of Putting Off Switching
Many owners put off switching property managers for many different reasons, but some of the most common reasons are:
        having to deal with the agent after arranging to switch
        any penalties associated with ending your service agreement early
        concern that things will get worse, and feeling trapped

"You property manager is a member of your investment team and needs to be a good fit with you. I’ ve learnt the hard way that a bad property manager can cost you thousands and putting up with a bad egg for months, perhaps years,
will cost you even more.
Your property investment is yours and at the end of the day you need to make decisions that are going to empower you and be a smart choice for your family.
Once you find the right property manager you will wonder what you were worried about!" says Holloway.

Renosave have partnered with PropertyBEE to offer FREE 12 months Landlord Insurance

Policy when you choose PropertyBEE. Makes owning your rental property a little easier.
Offer Expires 31.1.17 (Offer available for the first 100 people only)


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