Help with managing the Property Manager

From: Marc Krisjanous


Hi all,

We are in the process of settling on our first IP in Melbourne. We currently are looking at engaging a property manager to manage the property.

We would appreciate any hints, tips and suggestions in regards to using a property manger. The property management company in question is LBC.

The company has presented us with a REIV – Exclusive Leasing and/or Managing Authority document with a list of management figures written into the document.

We would like to also ask them a list of questions such as defining an inspection frequency schedule etc... List the questions and responses within a document and get the property manager to sign off. We are not sure even if this could be a legal binding document.

Best Regards

Marc
 
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Reply: 1
From: Michael Yardney


Marc
You are allowed to request anything you like to be put into your agency agreement with your property manager.
In particular I would ensure that they don’t charge you more than 5% for managing the property. But fees are only a small part of the equation. You need a professional who will look after your property for you so you could ask some of the following questions:-
1. Ensure the agency has a separate property management department and that it is not he receptionist who handles the rentals.
Because the rental department is often a headache the owner the estate agency will often leave property management to inexperienced staff members. Find a company that takes property management seriously.
2. How long has the property manager been with that particular agency?
You want stability. You want someone who will know your property inside and out. And still be there in six months time when you want to be to talk to them
3. Are they close to your property? Anything with in a 10 – 15 minute travelling distance is good. Anything further than that is not really in your best interests.
4. Ask the property manager what they think of tenants. This sounds dumb. But one of the interesting lessons I learned over the years is that to get a good tenant and to get them to do what you want, you need to treat them well.
5. Make sure they have a pro-active approach and actively do tenant reference checks, thorough ingoing and outgoing inspection reports, regular periodic inspections and regular drive by inspections. Make sure they invite you to attend each and every inspection. And regardless of whether or not you attend, you should always receive a written report.
6. Check whether the Property Manager just hands out keys or whether they do property inspections with prospective tenants. If they just hand out he keys and let the tenant inspect the property on their own, move on to another agency. I’ve seen to many things go wrong with this approach, including one extreme case where a prospective tenant made a copy of the key and returned the key to the agent, got back his driver’s licence or whatever he gave for security and then used the copy key that he made to move in and squat in the premises without paying rent! It took weeks to get him out.
Also walking around the property with prospective tenants means that the agent has a chance to promote the property as well as an opportunity get to know the tenant a little better. It is amazing what will come up in general chat that would never be written on an application form!
7. Ask how many properties the manager looks after. If they look after too many properties, they won’t have time to devote the attention your property deserves. The rule of thumb used to be for standard residential properties 100 per full time Property Manager.
If you email me with the geographic area where your property is situated, I may be able to help you with the name of a good property manager.

Michael Yardney
Metropole Properties
 
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Reply: 1.1
From: DB Bear


Hi Marc

Good questions to ask Michael.

At the last Melbourne Freestylers Meeting we addressed this problem. We compiled a list of Due Diligence interview questions to ask prospective Property Managers. You'll find it at www.freestyler.net.au under the Property Investment forum - it's called Interview Questions for investing team.

It also has interview questions for solicitors, mortgage brokers and accountants. Go check it out. Also, if you can think of questions that we missed out, add it to the post.

Deb
Melbourne Freestyler Co-ordinator
www.freestyler.net.au
 
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Reply: 1.1.1
From: Scott Marshall


Go to the property managers and pretend you are a prospective tenant. Go through all the stages of renting a property. If you have plenty of money to throw around pay a bond and a months rent and then do nothing and see what happens. ( you may even go to the tribunal and get yourself on the bad tenants list, this would be good for testing future managers diligence) Scott
 
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