Many investment property owners would agree that finding the right investment property that fits your criteria is like striking gold.
As investors we only want to work with property managers who appreciate the immense responsibility entrusted to them as they manage our valuable assets and display evidence that our properties are in good hands under their management.
With this in mind we have put together a handy list of suggestions to ensure you get good outcomes from your property manager.
1. Make sure your property manager understands your business plan and exit strategy for the property.
Did you invest in this property for monthly cash flow for you to live off of, or for your retirement years down the road, or for tax leverage? Whatever the case, make sure your property manager knows, understands, and is in agreement with you.
I recently had a property manager who assessed a property as needing a new kitchen, carpet, vinyl and bathroom. On top of this they also provided unqualified prices of approximately $60K for this work to be done.
The property was neat and fully functional as it was, the client was buying the property for the cash-flow it generated as well as its ability to increase in value in 5 years times following a subdivision of the block.
Spending the extra money suggested by the property manager would only have achieve an extra $20 – $30 per week and wouldn’t have been consistent with the strategy being applied by the investor. The property managers intention for the property was too far removed from the buyers however after consulting with them about the intent of the buyer the manager agreed the property was suitable to remain in its existing standards.
2. Find out if the property management is up to your standards by interviewing them from a checklist of expectations and by contacting and speaking with other owners.
Contracting a property manager is the same as hiring staff.
We recommend interviewing the property managers to ensure that they are not managing more properties than they can handle, that they are highly experienced in property management, that they don’t pass out keys to your property and that they are quick in finding replacement tenants for you. You can even ask to speak to some of their customers to see how they rate.
3. Get an idea of their monthly performance reports
Don’t be afraid to ask for an example of what their property performance reporting capabilities are for owners. Get a sample of what they currently send out, and then let the property manager know what you need on weekly and monthly basis for reporting on the property. If they are incapable, then you have limited ways of holding them accountable.
4. Ensure yourself and/or the property manager visit the property regularly as often as the legislation in the state permits.
Regular visits assist in getting to know the tenants. Being on top of any maintenance items that are noticeable protects the condition of the property. There is another level of accountability if the tenants known there are regular visits.
It can be helpful to know the people who live around the property, they are a good source of information and are usually positive about passing on any negative feedback to yourself or property manager. The more sets of eyes that keep an eye out for you helps.
5. Conduct an annual customer service satisfaction survey of the tenants.
You could easily do this yourself or hire a third party to conduct the survey. The survey should address the following: maintenance issues of the property and grounds, maintenance of community facilities if any e.g (pool, clubhouse, etc.), maintenance of utilities (heat, water, garbage), tenant relations, leasing services, and security. Keep it simple, easy to fill-out, with a self-addressed stamped envelope, with names optional.
6. Don’t be afraid to pull the plug on the property manager if poor performance lingers.
Here a few signs to watch indicating it may be time to pull the plug: high delinquency of rent collection, worsening occupancy trend, habitually late reporting, and accounting irregularities.
We Find Houses has a network of preferred property managers around Australia and we also actively make ourselves available to our clients to ensure that they are getting the best out of their property manager.
For more information about We Find Houses contact Paul Wilson on 1800 600 890.