Ask any long-term landlord and they will probably say they have experienced the highs and lows of property management.
In fact, many investors have learned the hard way about property managers who don’t do much more than collect the rent – and sometimes that doesn’t happen either!
Now, every industry has its bad apples, but property management brings its own complexities because of the combined elements of real estate and people management.
Sure, property managers are paid to look after your asset, but sometimes they forget to manage the tenant at the same time – or vice versa!
So, to help you avoid making the same blunders, here are four common mistakes when selecting a property manager.
1. Cheap is not value
Far too many novice investors concentrate on the cost of property management.
This is especially the case for new landlords whose properties might be negative cash flow for the first few years.
Rather than recognising that you can get what you pay for, they opt to appoint a cheap property manager to supposedly save some pennies.
Of course, this is never a good idea because usually the reason why a particular agency only charges a pittance is because they’re not that good.
The price you could end up paying will potentially be far greater than paying for an expert to look after such a valuable asset as your investment property.
There is no question that property management can be a stressful job.
There are a number of moving parts involved, as well as the unpredictability of human behaviour.
That’s why there is often a high churn rate of property managers.
Modern technology also means that tenants have the ability to contact them at any time of the day or night.
However, professional property management teams have systems and processes which reduce some of the onerous tasks as well as streamline others.
This means that property managers stay for longer and are much more experienced.
Experience always counts in any profession, but it’s vital in property management.
3. Communication problems
There are so many different ways to communicate today that there really is no excuse for problems.
Landlords can choose how they want to be communicated with – be it phone call, text or email.
So, with so many options, a property manager who is tardy when it comes to communication is someone you should give a wide berth.
While investors don’t want to be peppered with irrelevant information, they should be contacted as soon as possible if something important, such as rental default, damage or a break lease, has occurred at one of the properties.
If your property manager doesn’t communicate this with you in a timely manner, then it’s time to look further afield for someone who will.
4. Not looking locally
There are more interstate investors than ever before.
That means that a landlord might live in Melbourne but own properties in Brisbane, Adelaide and Perth.
In real estate, whether it’s sales, buying or renting, it is local knowledge that is key.
A property manager who doesn’t know or understand the local market of your investment property can’t provide advice on market conditions with any great depth.
That could mean, your property remains vacant for longer because they have suggested a higher rent than the market is prepared to pay.
Or, perhaps, they suggest you try to increase the rent when the market is actually soft, and the tenant decides to shift out instead of staying.
These examples are why having access to expert local knowledge will always be valuable for an investor.
Now in today’s technology age that doesn’t mean the agent needs to have an office down the road.
For example, Metropole Property Management has central offices but area specialist property managers who know their patch
As you can see, there are a number of attributes that good property managers all share and a number of red flags that it pays to understand.
Working with an expert team throughout your investment journey will always prove to be a wise decision and can help you achieve your financial goals sooner rather later.