Property Management is important to get right.
Appointing (or changing) Property Managers and Leasing Agents is straight forward and can be done (online) in just minutes. However, it is important to understand the experience, capability, skills, and cost of your agent before you jump in. Let’s break it down…
How much to pay a property manager?
Price is not a great guide for quality when it comes to property management. However, at the cheaper end service drops away very quickly.
Technology has made Property Management and Leasing much more efficient. However increasing regulation and expectations of service standards has added processes and additional skills, making it more time consuming. Consequently, fees have remained relatively stable for many years.
For a more detail of Property Management and leasing fees here is the full article on fees which summarises each service fee and explains why the fees vary in different cities and towns as well as property type.
In Melbourne the following service fees are considered market rates.
Property Management – 5% to 8% of the monthly rent.
Leasing Fee – equivalent to 1.0 to 3 weeks rent
For Lease advertising – $150 – $500
- Other service fees often apply for other functions such as account management, releasing, ingoing condition reports and tribunal representation.
What sort of property manager to appoint?
There are a number of pointers listed below follows.
- Don’t be wooed by the glitz of a prominent agency name. Big real estate agents are best known for sales, but their Property Management and Leasing capability may be very different.
- Look for a combination of great people and great systems. Ultimately it is the property manager that looks after you, but people change jobs, get sick or go on leave. The Property Management system is critical to ensure you, and your renter, are looked after during all these times.
- Asking how many properties a manager looks after is no longer relevant. It now depends on what other support they have as well as the type and age of properties managed. Many agencies now have large offshore support teams managing a lot of the admin functions. They can also have a dedicated leasing team, field operatives, and trust accountants supporting them. Also, some property managers operate a system where two or three property managers work in a team managing 500-600 properties.
- While you want your Property Management team to look after you, what is really important, is how they look after your renter. You want the renter super happy and continuing to pay rent on time with regular increases. Ask your potential Property Manager about tenant services like how they can report maintenance and discuss unpaid rent or what is their 24-hour emergency maintenance process.
- The leasing process is one of the most important. If your agent can find and keep a great renter then you can enjoy years of trouble free investment. This makes the entire leasing process from presenting your apartment, marketing it, inspections, application review and renter induction critical. You can read a full article on best practice leasing here
What size Property Manager is best?
Yes, size matters when it comes to the best property managers as it can determine the quality of the service, systems and people.
Big is not always better. From my observations there are very few good big property managers unless you happen to find a good individual property manager within a big company. Most of the major companies find it difficult to keep up with rapidly improving technologies given the challenges in shifting their business processes each time. Also personalised service is tricky in a big company.
Conversely a very small property manager relies heavily on one or two people, but there are some fantastic solo operators in niche markets.
Some agencies have a big sales presence, but a small property management business that doesn’t get as much operational attention.
The best agent is a mid-sized company who have invested in technology and have their main business focus on property management and leasing rather than sales. A company who also focusses on a specific sector like apartments, makes them a perfect fit.
How to find a property manager and leasing agent?
Ask others for a property manager recommendation.
A direct recommendation from someone is the best way, but unless that recommendation is glowing you should not stop at that. Even ask renters or check their reviews on who the agent is for their apartment and if they would recommend them.
Other ways to find a property manager
- Google it… search for “How to ask a agent to manage my property” or similar. Look to see who is local or specialises in apartments (like Wood Property) and dig around on their websites and check for reviews.
- Look on realestate.com.au or domain.com.au to see who is leasing apartments in your building.
- You can try comparison sites such as local agent finder but get ready to be bombarded by lots of agents and remember the agent has to pay the comparison site for your business which they may pass on to you.
Meet a couple of property managers
Unless you have happened to find someone amazing (like Wood Property), meet and interview 2 or 3 property managers. Any more than that can become overwhelming. The process of meeting and getting a Property Management proposal from an agency is a great way to get a feel for their services and culture. They will also be very helpful with lots of ideas and tips for you.
Is a good sales agency also good property manager?
Maybe, but not always. Give the Property Management and Leasing team a full review and don’t blindly assume they will be good because their sales team is good. Also, your close relationship with the sales agent won’t be much help if things don’t work out with the Property Manager or Leasing team.
What are the property managers systems and processes?
Get a feel for how the business runs and so ask questions like…
- What happens to queries when a Property Manager is on leave?
- How does the leasing and rental application review process work?
- Is there an owner portal to check in on any details 24/7?
- Do they have an offshore support team?
- What is their process for dealing with maintenance?
How does the property manager handle maintenance issues?
When something in an apartment needs fixing, and it is not done, (despite many calls to the agent), renters get really frustrated. This makes it harder to achieve rent increases and creates renter turnover. Maybe the owner does not want to pay for repairs (or thinks it is not necessary) and sometimes it is the agent not attending to it.
Either way, ask your new property manager how they process and follow up maintenance requests.
