The standard of your property manager can make a huge difference to the experience that a property investor has during their ownership period.
A good property manager will take away much of the stress associated with personally handling an investment property. From managing the risk of an investment to conducting property checks to make sure that the property is intact, a property manager has a wealth of important tasks. That is why it’s important to look out for the tell-tale signs of poor property management, and make a change sooner rather than later.
The 8 signs of poor property management
1. Rent stagnation to avoid tenant changeover
One of the most important jobs of a property manager is to negotiate rent. A good property manager will ensure that they are familiar with local housing prices in order to get the investor the best possible rent prices. They will also ensure that as the market develops, rent does not stay stagnate.
Under a poor property manager, the price of rent usually stays the same, and investors might find that the rent being charged on their property is quite low in terms of market standard. Instead of working to make the investment property as profitable as it can be, poor property managers rest on their laurels and are happy to leave rent prices untouched in case this results in changing tenants.
The reason for a property manager not wanting the apartment to change hands can usually be attributed to two motivators:
- It’s a lot more work to bring in a new tenant than to keep an old one, as it requires paperwork, inspections, viewings, etc.
- During the time a rental property is empty, the owner is not receiving income from that property and so are more likely to engage at a higher level with the property manager, which a poor property manager would not welcome.
2. Rental property viewings
One of the key roles of a property manager is setting up the rental property for public and private viewings. In the case of good property management, the hired professional will be front and centre for both, and will ensure that the rental property is up to scratch from a facility standpoint (for example, giving recommendations on required changes like stained carpet replacement or damaged items). Good property managers are instrumental in this phase of the renting process.
However, a poor property manager will generally leave the ball in the investor’s court. The investor becomes responsible for determining what changes need to be made in order to receive the best rental prices possible, as well as organising when and how frequently viewings should be held.
Investors hire a property manager for help in the rental process, not to spend the money only to then manage the process themselves.
3. Screening tenants
Good property managers have experience with hundreds of rental applications and are old hands at screening tenants, reference checks, and reviewing rental history in order to make sure that an investor receives high quality tenants in their property.
Therefore, another sign of a poor property manager is when an investor is constantly faced with bad tenants who come with a myriad of issues. A poor property manager will not manage the process of locating, screening and securing the tenant well. This could leave investors to face a history of late rent payments or disputes over the property’s condition.
A good property manager will eliminate problem tenants before they set foot in an investment property, whereas a poor manager will offer them the rental only to have a string of issues arise once they settle in.
4. Organising tradespeople
Property managers can help tenants organise tradespeople when something breaks or ceases working in a rental property. This is largely due to the fact that property managers should have a large network of qualified tradespeople who they know and do business with regularly. These contacts are usually available for quick repairs at reasonable costs.
However, a poor property manager will organise tradespeople that are highly expensive and aren’t available for quick repairs, because they haven’t taken the time to cultivate relationships with tradespeople that will benefit both tenants and landlords in the future.
5. Rental property repairs
With regular inspections comes the ability to prevent maintenance issues before they get out of hand. If a property manager leaves a property with no inspections it for a long period of time, issues can pile up, resulting in excessive repair costs for the property owner.
A good property manager prevents this from happening through regularly scheduled inspections to spot any issues before they become too big and therefore more costly to the landlord.
6. Tenant and landlord relationship
Good property managers act as a buffer between the property owner and the tenant. If the tenant has any issues, they contact the property manager for quick resolution, leaving the landlord out entirely unless they are needed.
Therefore, having tenants contact the property owner is a sign that the hired property manager isn’t doing their job correctly. One of the major reasons why investors hire property managers is so that their identity is protected from the renter. When the tenant makes contact with the investor it is a sign that the property manager isn’t doing their job properly, as the tenant is going over their head because they aren’t providing adequate help.
7. Communication between property manager and landlord
A good property manager should be proactive. At the end of the day landlords have hired the property manager to do a job, so it shouldn’t fall on the landlord to manage the property manager. With the amount of duties entrusted to a property manager, it is crucial that – be it through phone calls or emails – property managers are easily contactable.
While everyone is busy, a property manager who doesn’t return phone calls or emails for weeks on end cannot be very good at their job. In the time between missed calls and unread emails, things could be happening to the property or to the tenants that the landlord is left completely in the dark about. Communication channels between a landlord and a good property manager should always be open.
8. Monthly statements
Once investors decide what frequency of payments they would like to receive and when their monthly statement will be sent, property managers should contact them accordingly. This information is paramount because investors need to see, in detail, the income, expenses, owner payments, and any outstanding invoices associated with the investment property.
A bad property manager may send through a monthly statement, one that is focused on payment of fees alone. A good property manager uses a monthly statement as a way to keep the landlord informed about the costs involved with the property.
How to change your property manager
Have a conversation
Before changing property managers, investors may want to have an open and frank conversation with their current property manager. If all the issues are put onto the table, perhaps the property manager can make changes to their work ethic and, if not, it should reaffirm in the minds of the investor that the manager needs to be changed for the sake of the investment.
Look locally
Local knowledge is crucial. Property managers who are versed in the local market, particularly what is on offer and for what price, is a big bonus. This knowledge ensures that the property manager knows how to attract tenants and set an appropriate rent.
Do your research
From relying on word of mouth and asking direct questions to finding out more about the real estate agency, research is crucial to finding a good property manager. Taking the time to get some information ensures that the investor is both happy and comfortable that the chosen property manager is diligent and well equipped to manage every aspect of the property with professionalism.
A final thought
Highly skilled and professional property managers can go a long way towards making the investment property and subsequent rental process seamless. Good property managers will manage the risk of an investment property and know that they have an obligation to the landlord to keep the rental property and its tenants in line.
Finding smart ways to manage risk and drive rental returns is our priority at LJ Hooker. Speak to a member of our Property Management team today to discuss how we can assist you with the management of your investment property.
-2.jpg)
