Choosing the Right Property Manager: What to Look For and What to Avoid (Contains Pro Tips)

Selecting the right property manager is crucial for the success of your rental investment. A good property manager can enhance the value of your property, ensure tenant satisfaction, and maximise your return on investment. However, choosing the wrong one can lead to costly mistakes and headaches. Here are key factors to consider when selecting a property manager and red flags to watch out for.

What to Look For

1. Experience and Expertise

- Industry Knowledge: Ensure the property manager has extensive experience in the real estate industry, particularly in managing properties similar to yours. They should be familiar with local market trends and regulations.

- Questions to Ask:

- "How many years of experience do you have in property management?"

- "Can you provide examples of similar properties you manage in this area?"

- Professional Credentials: Look for property managers who are licensed and members of professional organisations, such as their local Real Estate Institute.

- Questions to Ask:

- "Are you a licensed estate agent?"

- "Are you a member of any professional organisations like the REIV?"

2. Strong Communication Skills

- Accessibility: A good property manager should be easy to reach and responsive to your inquiries. They should provide multiple communication channels, including phone, email, and online portals.

- Questions to Ask:

- "What is your typical response time for landlord and tenant inquiries?"

- "How can I contact you if there's an urgent issue outside of business hours?"

- Clear Reporting: Regular, detailed reports on your property’s performance, financials, and maintenance issues are essential for transparency and informed decision-making.

- Questions to Ask:

- "Can you provide a sample of your monthly management reports?"

- "How often do you update landlords on their property's status?"

3. Effective Marketing Strategies

- Comprehensive Advertising: Ensure the property manager uses a mix of online and offline advertising methods to attract quality tenants. This includes listings on major real estate websites, social media, and local classifieds.

- Questions to Ask:

- "Which platforms do you use to advertise rental properties?"

- "Can you show me examples of your property listings?"

- Tenant Screening: They should have a thorough tenant screening process, including background checks, credit history, rental references, and employment verification.

- Questions to Ask:

- "What is your tenant screening process?"

- "What criteria do you use to qualify potential tenants?"

4. Proactive Maintenance and Inspections

- Routine Inspections: Regular property inspections are crucial for identifying and addressing maintenance issues early. Your property manager should have a schedule for bi-annual inspections and provide detailed reports with photos.

- Questions to Ask:

- "How often do you conduct property inspections?"

- "What percentage of your portfolio is overdue for an inspection?"

- "Can you provide a sample inspection report?"

- Maintenance Management: Look for property managers who have a reliable network of contractors and can promptly handle repairs and maintenance requests.

- Questions to Ask:

- "How do you handle maintenance requests and emergency repairs?"

- "Do you have a list of preferred contractors you work with?"

5. Strong References and Reviews

- Client Testimonials: Check for positive testimonials and reviews from other landlords. Personal recommendations can also be valuable.

- Questions to Ask:

- "Can you provide references from current or past clients?"

- "Are there any online reviews I can look at?"

- Tenant Feedback: Satisfied tenants are often a sign of good property management. Look for reviews from current and former tenants about their experiences. But also be mindful that a tenant could be disgruntled because the property manager was dutifully executing their clients instructions.

- Questions to Ask:

- "Do you have any testimonials from tenants regarding their experience?"

What to Avoid

1. Lack of Transparency

- Hidden Fees: Be wary of property managers who are not upfront about their fees or who have a lot of hidden charges. Make sure you understand all costs involved and what services are included.

- Questions to Ask:

- "Can you provide a detailed breakdown of your fees?"

- "Are there any additional charges I should be aware of?"

- Poor Communication: If a property manager is hard to reach or slow to respond during the initial stages, it’s likely to get worse once they’re managing your property.

- Questions to Ask:

- "What is your preferred method of communication?"

- "How quickly do you typically respond to emails or calls?"

2. High Turnover Rates

- Frequent Staff Changes: High turnover within the property management company can lead to inconsistent service. Ask about staff retention rates and who will be your main point of contact.

- Questions to Ask:

- "How long have your current property managers been with the company?"

- "Will I have a dedicated property manager, or will multiple people handle my property?"

3. Inadequate Knowledge of Local Laws

- Non-compliance: Property managers must be well-versed in their local Residential Tenancies Act and Regulations. If they seem uncertain or give vague answers about legal requirements, it’s a red flag.

- Questions to Ask:

- "Can you explain how you ensure compliance with local rental laws?"

- "Have you dealt with any legal issues recently, and how were they resolved?"

4. Negative Reviews

- Consistent Complaints: Check online reviews and look for patterns of negative feedback, particularly regarding communication, maintenance, and tenant relations.

- Questions to Ask:

- "What do you do to address negative feedback from clients or tenants?"

- "Can you explain any recent negative reviews and how you handled them?"

5. Lack of Professionalism

- Unprofessional Behavior: Your property manager is representing you. Pay attention to how they conduct themselves during meetings and communications. Professionalism is key to managing your property effectively and maintaining good tenant relationships.

- Questions to Ask:

- "How do you handle difficult tenant situations?"

- "What is your approach to maintaining professionalism in all dealings?"

Important Considerations for Landlords

1. Dealing with Business Development Managers (BDMs)

- Onboarding Process: When looking for a new property management agency, you'll likely deal with a Business Development Manager. Their job is to secure new managements for the agency and onboard them. This is typically a better experience for you as their skill set is geared towards new landlords. However, be mindful that their primary goal is to win new business, so take care to look beyond the sales speak.

- Questions to Ask:

- "What is your process for onboarding new landlords?"

- "Can I meet the property manager who will be handling my property before I sign up?"

- Handover Process: The BDM won't be managing your property ongoing, so it's important to be clear about what the handover process looks like. This will differ from company to company. Always ask to meet the property manager who will be handling your property before you sign up.

2. Maintaining Your Own Records

- Expecting Change: The typical property manager is only in their job for a couple of years, so expect change rather than wishing it won't happen. This means keeping your own records is essential. Having comprehensive records will ensure you have all necessary information at your fingertips, regardless of any staff changes.

- Questions to Ask:

- "How often do property managers change within your company?"

- "What systems do you have in place to ensure a smooth transition when a property manager leaves?"

Pro Tips for Deeper Understanding: Choosing the Right Property Manager

Selecting the right property manager goes beyond basic qualifications. Consider these advanced tips to ensure you choose a manager who leverages technology effectively and prioritises modern, efficient practices.

Technology and Accessibility

1. Property Management Platform:

- Platform Accessibility: Inquire about the property management platform they use. A robust online portal allows easy access to financial reports, lease agreements, and maintenance requests.

- Security Measures: Ensure the online portal is secure. Ask about encryption protocols and data protection measures to safeguard your sensitive information.

2. Routine Inspections:

- Inspection Methods: Understand how they conduct routine inspections. Some managers use video inspections for comprehensive documentation, while others rely on still images.

- Frequency and Detail: Ask about the frequency of inspections and the level of detail provided in inspection reports.

Contract Management

3. Digital Contract Signing:

- Signing Process: Inquire about their contract signing process. Digital signatures offer convenience and speed, ensuring compliance with legal requirements.

- Security and Compliance: Verify the security protocols for digital contracts. Ensure they comply with local regulations regarding electronic signatures.

Rent Collection and Financial Transactions

4. Rent Payment Methods:

- Tenant Payment Options: Understand how tenants pay rent—whether through online portals, direct bank transfers, or other methods.

- Timeliness: Ask how long it typically takes for rent payments to be deposited into your account. Verify if there's a consistent due date for rent collection to streamline financial planning.

Choosing a property manager who embraces technology and modern practices can streamline operations, enhance transparency, and ultimately maximise your investment's potential. By asking the right questions about their technological capabilities—such as property management platforms, inspection methods, contract signing processes, and rent collection methods—you ensure your property management experience is efficient, secure, and aligned with your expectations.

Investing time in selecting the right property manager will pay off in the long run, ensuring your property is well-maintained, your tenants are satisfied, and your investment yields the best possible returns.