Anyone who has ever been a landlord will tell any prospective investors that having a good property manager is the difference between success and failure for an investment property.
Blogger: Andre Knott, property educator
It goes without saying that selecting a good property manager is a critical task. There is an easy way to weed through the mess to find a real professional who can manage your investment property effectively.
The first thing you need to do is interview potential property managers by asking them the following 10 key questions. After all, you will be giving them a portion of your rental income, so you need to get it right!
So here are the important questions you need to ask:
1. How will you prove to me that you know about the local rental market?
In order to give you a bit of confidence in their abilities, the property manager should have a few years’ experience as a property manager, as well as being with the agency for a little while. To get this information, I recommend asking them how long they’ve been at the agency and how long they’ve been a property manager. Don’t be scared to ask for a few references from a few clients who have similar properties to yours.
2. How much do you know about current real estate legislation?
The policies, laws and regulations involved in owning and leasing a rental property are numerous, and they are continually changing. Therefore, it is important that property managers remain current with these changes. Try looking for proof of any ongoing training, professional development and membership to any relevant bodies.
3. How much support does a property manager have in their office?
You should look for a property manager with a good support team that is knowledgeable in sales, administration, financing and leasing. I recommend asking how the support team is structured. Questions, such as who will be organising the maintenance and who will be doing the regular inspections of your property, need to be asked. It’s important to know who will be responsible for what occurs with your investment.
4. What procedures are in place to take care of any issues that might occur?
I believe that a property manager discussing every aspect of the management process with you is very important. Find out when the property manager will contact you if the tenant has a problem paying the rent or if there is a maintenance request. These items need to be fully discussed with you even before a tenant is selected and the management of your property begins.
5. How often are you in contact with your landlords, and how do you do it?
The right property manager needs to contact you regularly through an agreed process. This process could be monthly statements, general market information via email or property inspection reports. It’s necessary for your property manager to keep you updated about anything that occurs with your rental property, such as rent reviews, lease renewals, maintenance issues and if a tenant is leaving the property.
6. Do you have a strategy for finding the best tenant for my property?
This is a really important question because you certainly don’t want a property manager to let just anyone become tenants. A good property manager will take into consideration the appropriate demographic for your property and focus on getting a tenant that comes from it, particularly via methods such as internet advertising. A good property manager will also have a significant database of quality tenants that are already looking for somewhere to live.
7. How do you manage the financial aspects of the property?
The prospective property manager needs to fully explain to you how they collect rents and when it should appear in your bank account. It is important for you to understand the associated management fee that comes with their services. You need to clearly understand this agreement before you sign on the dotted line.
8. How will I know that my investment property is in the best position for capital gain, and how will you ensure I have a regular income stream?
A property manager that is empathetic to your financial goals will help you to increase your investment’s return. Knowing what the relevant rental returns in the area are, is just as important as knowing what the property is worth if it needed to be sold. The entire real estate team should keep you updated with all the latest info by using their experience and specialist knowledge.
9. How often will my property be inspected?
Even though there is legislation involving how often a property manager can inspect your property, you should ensure that your property manager schedules regular inspections according to that legislation.
10. What else can I put in the rental and tenancy agreements?
Here is your chance to discuss any special requests you might have that you want your tenants to comply with, both outside and inside the house, as well as stating the criteria you expect with matters such as maintenance and overall cleanliness.
About Andre Knott
Andre has spent more than a decade of his adult life travelling and working around the world. This international exposure has allowed him to build a multimillion dollar portfolio of overseas property. His investment career includes investments all around Australia as well as New Zealand, Canada, Malaysia and, of course, the United States of America. While Andre has invested in a number of different markets, he has found the US property market to be one of the most fool-proof investment strategies he’s ever seen. This is why he has invested or co-invested in 27 properties in the USA alone.
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