How To Find A Good Property Manager & Questions to Ask

If you're looking to cut costs on your investment property, or even to tip it into positively geared territory, you might've thought about managing it yourself. While that's something you can do, you should think very carefully about whether you have the time, not to mention the ability and knowledge, to fulfill this important task.

For many investors, their property manager is worth every penny. But finding a professional worth their weight can be tricky.

Here's how to find the right professional for your needs.

Traits to look for when choosing a property manager

Like in any profession, some will thrive and some will survive. It can be assumed that most property investors want a property manager who thrives in the role and performs excellent work.

Here are some of the things that separate a good property manager from a mediocre one:

No corner-cutting

You want a property manager who is thorough with good attention to detail. It's obviously tricky to work out if a person holds such traits during an interview. No one is going to come out and tell you they are lazy, after all. But you might be able to tell how much work the manager is putting in by looking at the likes of entry and exit reports and inspection notes.

Good at finding and managing tenants

Anytime your property is empty is time you're not receiving rental income, so it's important to try and ensure it's always tenanted. When it comes to the pointy end of a lease that isn't being renewed, a good property manager will be proactively advertising to try and minimise any time between tenants.

Simultaneously, you presumably don't want to end up at your state's tenancy tribunal. For that reason, it's also vital that your property manager is adapt at handling any problems that come up throughout the lease.

Easy to deal with and professional

Investorkit research analyst Junge Ma recommends seeking out a property manager that is professional and easy to deal with.

"[A good property manager] has processes and procedures in place, is easily contactable, and gets back to you quickly," she told Your Mortgage.

Strong understanding of legalities

One of the most valuable things a property manager brings to the table is familiarity with tenancy laws.

There are lots of regulations around rental properties, with laws dictating how often you can increase rent, what amenities you must provide, how quickly you have to repair breakages, and many other factors.

So, if the hot water were to break in the middle of the night and your tenants demanded it's fixed by morning, you could look up the relevant legislation and case law to find out exactly what your obligations are, or your property manager could simply take care of it.

Even if you think of yourself as a legal expert, Ms Ma says it's ambitious and risky to go without professional advice these days.

"Tenancy laws are ever-changing, and new regulations come in [frequently]," she explained.

"There's so much that a landlord needs to be up to date with [to ensure] they are compliant and providing a safe space.

"Big fines are in place … [it's] a risk that can be mitigated by having a property manager."

Read more: How to deal with a tenant in arrears

Experience and local knowledge

There's lots of things that can go wrong with an investment property, so an experienced property manager's know-how can be invaluable.

For example, a local management firm might have dealt with certain tenants before and may remember the raucous and damaging parties they used to throw. In that case, they could advise you to steer clear.

Or, if something were to go wrong with the ceiling fan, a seasoned property manager will probably know a reliable (and preferably reasonably priced) sparky to repair it.

Whenever such issues come up, it's tough to beat experience.

How to find a good property manager

If you're not from an area, or you've not been involved with an area's rental market, it can be hard to know where to start your search for a worthwhile property manager.

There are lots of property management firms that operate in Australia. Some are huge, and have hundreds of franchises spread throughout the nation, such as Ray White, LJ Hooker, McGrath, and Metropole. Meanwhile, there are hundreds, if not thousands, of smaller business, often locally- or family-owned, to choose from.

If you're not sure where to find a good one, the local paper or online forums and community groups could be a good place to start. Depending on where you've invested, you might consider asking around at the local pub.

Once you've narrowed it down to a handful of candidates, whether they be agencies or individuals, it's time to start interviewing.

"It's important to interview [a property manager] before signing up so to understand the service they provide," Ms Ma explained.

"If they're sharing tips, experiences, and knowledge that's helpful to you, it can be a sign they're in your corner."

Questions to ask a potential property manager

When you're interviewing potential property managers, here are a few questions that might be worth asking:

• How much support can your team provide? A property management team able to promptly respond to tenants' complaints can save you a lot of hassle, so it's worth investigating how stretched a manager's team is. Your property manager might be looking after hundreds of other properties and you should make sure there're enough resources available that your investment won't get sidelined.

• What is your strategy for attracting tenants? Keeping properties tenanted all year round is obviously very important to an investor, so you'll want to know how your property manager plans to achieve that. Ideally, every time one tenant moves out, you'll have a selection of potential new incumbents to choose from, which might mean proactive advertising or turning to a database of quality potential tenants.

• What commission do you charge? Hopefully this goes without saying, but you should compare how much different property managers will charge you. Property managers usually receive a portion of the rent as commission, and different managers or companies might charge a different percentage. It shouldn't be solely a numbers game - sometimes services are cheap for a reason - but make sure you aren't getting a raw deal.

• How many properties do you look after in the local area? Knowledge and experience in the surrounding vicinity of your investment property can prove invaluable. A property manager who knows the suburb inside out is less likely to make errors on pricing (asking too much rent and not finding tenants, for example) and more likely to know how best to attract local tenants. A quick way to assess a manager's local experience is to find out how many properties they or their firm services in that area.

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Just like choosing a property manager can be a crucial decision, so too can selecting a home loan. Here are some of the most competitive mortgages available to property investors right now

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