Owning an investment property is a huge financial commitment. For most people, it’s their biggest asset outside of their family home. However, when it comes to managing a property it’s often best to leave it to an expert who understands the applicable laws and can take an objective approach to managing your property. Unfortunately, the property management industry is crowded with individuals who are more concerned with their own interests rather than yours. These are the three most important traits to look for in a property manager.
You need your property manager to be totally honest with you. When you reach out to a prospective property manager and ask for their rental estimate, it’s tempting to sign with the property manager who gives you the highest estimate. However, if the property manager immediately begins to ‘walk you down’ with excuses about why they can’t get the price they quoted, or the property sits vacant for an extended period of time as you miss out on rent, you have to ask yourself if you have been duped. It’s worth noting that the longer a property is vacant the higher the asking rent needs to be in what is known as the vacancy-price paradox. More importantly, you may feel pressured to stick with them for a year or so after they’ve found a tenant even though the experience has been less than satisfactory. It’s worth considering if the property manager that quoted you the lower but more realistic amount would have been a better long-term partner.
It’s tempting to go for the property manager with the lowest fees. Afterall, it’s one of the few things you can actually control. But you have to ask yourself what the real costs are of going for the cheapest property manager. If your property is vacant for an extra week or two then you are well and truly financially worse off. It is worth considering what are known as the ‘big and little’ costs of owning an investment property. Do you really trust your greatest asset with the cheapest offering on the market?
Most property manager run portfolios of over 200 properties. If a property manager is responsible for that many properties you need to make sure that they have great organisation skills. If your property manager is not listing your property as soon as they are aware it is vacant it could be costing you serious money in lost rent. Likewise, if you’re not getting regular updates or responses to your enquiries about your property it’s probably a major red flag. It’s always recommended to utilise a property manager with your best interests at heart and with incentives that are aligned with your own.