So, you are looking for a good property manager…what do you look for? Let me tell you, it is not all of the usual standard stuff about fees etc that you should be comparing. You should be looking into the services and the way the business is set up.
Does the owner of the business work in the Property Management team or the Sales Team? I say this because most agencies are owned by sales people who start a property management company on the side as they do not want to refer business to someone else. You want a company where the owner of the business works in the property management department daily (80% of the day at least).
What structure does your PM department run? Why is this important? Well, there are several reasons and there are several structures. The 2 main structures are:
- Task based – means that you have a separate person/department to deal with everything, just like a major phone company – you will have to speak with this person to find out about maintenance and that person to find out about payments and a completely different other person if you have a problem. This is great if the PM department is large (because you have experts in their fields working for you) but it will drive you nuts if you have to speak with 3 people if you have 1 problem.
- Portfolio based – this means that 1 person looks after everything from finding a tenant, managing rent arrears, maintenance, periodic inspections, bills, vacating tenants etc. This is great if you PM is not overworked and does not have many clients to look after. I always say that for every property I look after I am usually managing 4 clients (2 landlords and 2 tenants), that is a lot of people to manage if I have too many properties.
How many properties does each PM look after? Again this is a very important question to ask because let’s look at it specifically. Industry standard for a portfolio Pm is 120 properties. A PM is scheduled works 38 hours a week (normally however we all know that they work a lot more than that). 38/120 = 32 minutes per week that the PM can fairly allocate to each property. If a Pm runs more than 120 properties as I know others do i.e. 140 properties that leaves you with = 27 minutes per week. I have actually know an owner of a PM business to allocate only 20 minutes per property per week.
How much real life experience do the PMs have? I know a lot of agencies who hire young staff i.e. 20 – 23 because they are cheap however most of the time they have not left the family home yet, don’t know how to obtain a mortgage, do not understand what “loan to value ratio” means, have never seen a depreciation schedule, have never had anything to do with a body corporate and who are yet to understand the worry that being a landlord brings with it.
How organised is your PM? I have known many PMs who could not organise a “chook” raffle let alone your trust account ledger. They can talk the talk but they have no idea what they are doing. Ask to speak with 3-5 client whose properties are currently being advertised for rent. They are current clients who are currently going through one of the most stressful times in a tenancy. They will tell you the truth!
Does the PM understand ledgers and trust accounting legislation? This is a large part of the job, it is vital that the PMs understand how to account correctly and what to do to repair an accounting error.
Who attends and prepares the QCAT (small claims tribunal) hearings? Is it someone with experience or just whoever is there at the time? Does the property manager personally attend? If it is a Task based PM department then this will be particularly important as one person will not have consistent dealings with the tenants and/or history of the case.
Does the PM department receive commissions from companies for referring business? You want to know if there is a payment of some kind and you are legally supposed to be advised of this. Some of the businesses that pay PMs are:
- Landlord Insurance
- Building Insurance
- Sales department
- Utility connection companies (gas, electricity, TV etc)
- Mortgage companies
- Financial advisers
- Depreciation companies
- Professionals (solicitors, accountants etc)
Make sure you find out everything you can about the owner of the business, google, Facebook, Insta – do your research.
Ask for a list of their their preferred tradespeople. Call these companies and ask questions such as:
- ask what percentage of their work is done with the agent?
- how do they let them know about jobs?
- does the contractor do free quotes?
- what percentage of the quotes they provided to the agency are approved?
- do they make the contractors fill out a contractor insurance form?
- have they ever lost keys?
- is most of their work done immediately?
- does the agent pay their bills on time? If so how frequently?
- do they have issues with communication? Who is the best property manager to work with in the office?
- how do they access properties to carry out work? (do they collect keys or do they arrange access with the tenants?)
All of these questions will give you a picture of how actual business runs.
I hope that these insights allow you to choose the best property manager for you and your family. These are huge investments that you have worked extremely hard to purchase and they must be administered professionally!
If you have ever had a bad property manager you will know the value of a good one!