Property management takes years to master, and it takes a very knowledgeable and experienced property manager to handle the complexities associated with real estate. Even the most cooperative tenants can be taxing, presenting problems and issues that only an expert can fully understand. When hiring a property manager, always ask how many years of experience they already have and how long they have worked at their real estate agency in the same capacity.
2. Problem Resolution
According to a survey, independent ratings and research agency, one of the most important factors that determine their level of satisfaction with regards to customer satisfaction is problem resolution. In this category, First National Real Estate received a five-star rating. This category is also where a property manager must excel.
There are a number of problems that a skilled property manager can manage, such as when tenants fail to pay rent, make unreasonable demands, or become a nuisance to the neighbors. These issues can easily escalate but can be managed successfully by a property manager who has the right diplomacy and strategic resolution skills. An experienced property manager can provide the right solutions for problems that a junior manager may fail to resolve.
A heavier workload increases the risk of mismanagement for a property manager. A competent property manager can manage around 120 properties effectively, but if the number rises above this figure, the manager may fail to give proper attention to the property. Small failures can have a significant impact on how well a property is managed and these failures can be costly. The risk of making these mistakes are also higher if the agency does not use a software system in property management. For this reason, it is a good idea to always ask the real estate agent about the number of properties they manage and the property managers they employ.
4. Who Manages Your Property
Real estate agencies often hire BDMs or Business Development Managers to manage their rentals. BDMs build and maintain relationships with landlords. When choosing a property manager, always ask who will be managing your property. Although BDMs are trained to ensure high-quality customer service, they can only handle so much and are more likely to pass your property paperwork to a junior associate. This associate may or may not have complete information about the property and may or may not be competent enough to manage it. When working with a property management company, always ask if a property manager will be assigned to your property or if the property will be managed by a pool of managers. Before signing the management agreement, ask the BDM to recommend the manager/s who will be handling your property, then schedule an appointment with the manager or the team.
Real estate agencies are often rated by their tenants based on their performance. Look for the Google Business page of the agency to check their reviews. Many clients leave detailed and informative reviews that will be helpful to your decision-making process. Keep in mind, though, that some reviews may not be very accurate. Extremely derogatory or even hateful reviews may be coming from disgruntled clients who may have violated certain terms of the agreement or other legislative parameters. Watch for the responses of the real estate agent to any inquiries or complaints. If the agency offers few or no solutions to the issues presented by their tenants, it is not likely that they will be as competent and effective in managing your property.
Efficient rent collection is important to the success of property management. It is also an indication of the agency’s ability to run its business. Find out how many tenants are in arrears with the agency. One to two percent of the total number of tenants in arrears is a fairly good number, but if the figure is higher or if the property manager is unaware, it might be prudent to look for another agency.
7. Communication and Screening of Tenants
An effective property manager has a strict list of procedures in handling applications from potential tenants. Procedures set a standard in business operations, which means that every application is screened and tenants are checked and verified. Information such as employment, creditworthiness, rental history, and references are critical for identifying the right tenants for the property. A property manager may have to use a number of resources for this purpose, such as other real estate agencies and national database systems. Since you will have to consider tenant information before making your choice, you will have to review the property management procedures that are already in place.
8. Vacancy Marketing
Property management agencies are expected to market properties that become vacant. Ask about the marketing methods and techniques that your agency will use for this purpose. Proactive property managers will immediately identify qualified tenants from their database, advertise through signages and other means, including the listing to real estate websites, and market the property using different digital channels.
9. Property Inspections
Many property owners assume that all property inspections made by prospective tenants will be assisted by the property management agency representative. The truth is that some agencies allow tenants to inspect the property on their own. This practice may increase the risk of damage or theft in the property and is an indication of low standards of care on the part of the agency.
The best property managers show excellence when it comes to maintenance. They should be able to respond quickly and effectively to complaints and requests made by the tenants. They should also be capable of working with a number of licensed tradespeople without missing their commitments. Property managers should also communicate with the tenants effectively to ensure that any information, complaint, or problem is identified and resolved. Good property managers must have an online system that keeps track of the status of every maintenance request or complaint so that they are aware of what is happening, when and where.
11. Condition Reports
The property manager must produce a condition report prior to an inspection by a tenant. Find out how the agency does this and what systems they use. Condition reports must be accurate and detailed to provide you with a comprehensive overview of the status of the property. An ongoing condition report will be used to compare with the outgoing condition report after the tenant vacates your property. The property manager must also perform inspections during a tenancy.
The property manager must be capable of ensuring that your annual yield is maximized. He/She should go beyond collecting rent and ensure that opportunities are tapped to help increase the rent and improve the property. He/She should also be able to maximize any tax advantages you may have. When talking to the property manager, ask what they can do to ensure that the value of your property increases over the long term. What they have to say will help you decide whether or not to do business with them.
Typically, a property management agency will charge a percentage of the weekly rent. However, they may also include a number of fees, such as administration fees and letting fees. Try not to focus too much on getting the lowest management fee. Often, you will receive what you pay for. Good property managers are capable of explaining and justifying their fee structure and helping you understand what you will get in return.