Start out Pretending to be a Tenant & Ask about the Properties they have for Rent
A great test is to walk into the agency dressed in your boardies and thongs and ask the person at the front desk for the list of available rental properties. You may want to ask some questions about them and try to book in to inspect a couple. This will be a great test to see how the property managers treat tenants. It will be a red flag if they treat you like crap, as this means they will probably not pass any tenant requests or maintenance issues onto you.
Ask for References from Some of their Clients, i.e. so you can phone them up
Testimonials are a great way to make sure your property manager has clients who are happy! Always ask for phone numbers as you can ask the question yourself rather than reading flashy written ones which could have been pried out of people with free movie tickets or a bottle of wine.
Ask about their commission, extra fees & what is included in marketing of home for lease?
Commission: Average property management commission ranges from 7% to 9% around Australia.
Admin Fees: There are sometimes sneaky fees on top of this such as admin fees. In my opinion this should be part of the commission - but agents separate this out to make their commission figure look cheaper than the rest.
Letting Fees: Fees to recruit the tenant. The letting fee is normally around 1-2 weeks rent on top of the commission.
Fees for outgoings paid: If your agent pays for water bills or rates or STRATA fees - you will often pay a commission fee on this - make sure you know if it is there and if so what it is? Same as commission? Save some money and set up direct debits for your bills so your not paying costs on top of your costs.
Marketing Fees: It’s important to also know what the marketing fees will be too - if they are included in the letting fee or an extra? Will they include professional photos? How many photos? Will it include a floorplan? Will it be advertised on both realestate.com.au & domain?
Marketing Message/Copy: Will you define the demographic/perfect tenant you are targeting? Will you emphasise the best features of the home & surrounding amenities to attract the right tenant? Will you be able to review this ad copy before it goes live?
How to Compare? The best way is to compare and add up the fees you will be paying per year and come up with a percentage of the total rental amount. Fees can be deceiving and when you include them in the total cost you can work out a comparable percentage and compare apples with apples.
Note: that you should never just pick the most expensive and think they will be the best. Ask the questions to make sure they have the right policies in place and the right customer service to take care of you and your tenants.
Ask about the agency?
How many property managers? How many properties being managed? How many evictions in last year? How many tribunal hearings in last year? How many properties vacant right now? How many stay vacant for more than 2 weeks every year? Average time takes to tenant a good property? What is your point of difference? Are you property investors yourself? Do you have a focus on maintenance? What minimum education do property managers have - 1 week registration or 1-2 year licensing course? Do your inspectors have any maintenance training? How often do you have to ask the landlord to drop the rent? Do you provide market appraisal document with comparable rental prices?
Ask about the ongoing service & communication you will receive?
How do you market the property? What quality of photography? Floor plans included? What do I get in terms of income/expense statements? Are they easy to understand or written in ‘another language’ where you can’t actually figure out what they are charging you for? Can I have a copy? How detailed are your leases? How detailed are your condition reports (condition of building prior to tenant move in)? Can you have copies?l What do you receive after each inspection? Are photos included? Can you have copies or reports? How often do you inspect the property? How quickly can you get a request to me once the tenant lodges it? How do tenants lodge requests? What is your rental arrears management policy? How quickly can you act if tenant starts falling into arrears or requires termination notice at what stage do you notify the tenant and the landlord?
Are you happy to go on a 30 day contract?
Not sure if they are all talk? One thing to definitely do is cross out the standard 60 to 90 day property manager notification and write 30days. that means if you get a crappy property manager you only have to give 30 days termination notice. If they are doing their job properly this shouldn't bother them.
As Jade Hamilton does not know your individual circumstance and is NOT qualified as a financial adviser, accountant or solicitor, this blog contains information and opinion only. Jade is speaking only as a Real Estate Agent and Investor from her own Personal Experiences, and recommends you seek your own personalised advice from a suitably qualified person.