Re: Question for new PM
- Thread starter lpool05
- Start date
1. Do you own an investment property yourself?
2. What motivates you to secure the highest possible price for my IP?
I think the best PM's in the industry and investors themselves, and have an interest in the PM business. This is the only way you will get the top level results you are looking for.
Erik
2. What motivates you to secure the highest possible price for my IP?
I think the best PM's in the industry and investors themselves, and have an interest in the PM business. This is the only way you will get the top level results you are looking for.
Erik
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The important thing is to be open ended in your questioning and don't ask yes/no questions. So for example, ask, "How do you check your potential tenants"? rather than "Do you do thorough checks on potential tenants?". If the question is yes/no, it's much easier for the agent to just tell you what you want to hear. Also, when you interview, make sure you're speaking with the person who will actually manage your property day to day, and make sure you speak to at least 3 agents. I suggest these questions:
How do you vet your potential tenants? How do you verify their income? How do you background check?
How do you make sure the rent is collected on time?
What do you do if the tenant falls behind?
When was the last time you went to the tribunal? How would you manage this if we had to take a tenant to the tribunal?
How often do you do inspections of the property? What did you do the last time you found one of your properties wasn't being well looked after?
And the all important "what are your fees?"
The above questions will tell you what the agent can do. You also want to know how they will do it. You want to know that they are organised, proactive, and will be communicative with you. So there are a few more questions I recommend. I suggest these questions:
How is your approach different to other property managers? Ask for specific examples of things they've actually done.
Why would I choose you to manage my property?
How would your colleagues describe you?
What are your strengths?
Hopefully these will give you a starting point. You can also see if you can find reviews online for the agent(s) you're looking at. Remember the fees are negotiable, and negotiating is easy if you have a few quotes.
Or if you're just looking for a recommendation, I use Laing and Simmons in Chatswood for all my IP's. I've tried a couple of PM's, and the property manager there, Barbara is excellent.
How do you vet your potential tenants? How do you verify their income? How do you background check?
How do you make sure the rent is collected on time?
What do you do if the tenant falls behind?
When was the last time you went to the tribunal? How would you manage this if we had to take a tenant to the tribunal?
How often do you do inspections of the property? What did you do the last time you found one of your properties wasn't being well looked after?
And the all important "what are your fees?"
The above questions will tell you what the agent can do. You also want to know how they will do it. You want to know that they are organised, proactive, and will be communicative with you. So there are a few more questions I recommend. I suggest these questions:
How is your approach different to other property managers? Ask for specific examples of things they've actually done.
Why would I choose you to manage my property?
How would your colleagues describe you?
What are your strengths?
Hopefully these will give you a starting point. You can also see if you can find reviews online for the agent(s) you're looking at. Remember the fees are negotiable, and negotiating is easy if you have a few quotes.
Or if you're just looking for a recommendation, I use Laing and Simmons in Chatswood for all my IP's. I've tried a couple of PM's, and the property manager there, Barbara is excellent.
Interesting that point about the fee. if said property manager is willing to negotiate a lower commission just to get your business what will they "negotiate" when it comes to the rent that the tenants will pay.
remember one thing the higher the management fee the higher they will want the rent to be (within reason) as they get a slice of the pie. Add to that the fact that you will be treated better if you pay a higher fee as you will represent more dollars.
I am happy to lose 2 landlords paying 4% for 1 paying 8%
think about it
remember one thing the higher the management fee the higher they will want the rent to be (within reason) as they get a slice of the pie. Add to that the fact that you will be treated better if you pay a higher fee as you will represent more dollars.
I am happy to lose 2 landlords paying 4% for 1 paying 8%
think about it
I am happy to lose 2 landlords paying 4% for 1 paying 8%
what if the 2 you lose are rented at $800pw?
Interesting that point about the fee. if said property manager is willing to negotiate a lower commission just to get your business what will they "negotiate" when it comes to the rent that the tenants will pay.
Add to that the fact that you will be treated better if you pay a higher fee as you will represent more dollars.
How do you figure negotiating on fees constitutes negotiating on rental rates..? Care to explain.
Also, I've heard stories where people have been paying 10% for management of their property and received the worst services. Whereas, others paying 5% receive great service and are recommended to others.
Plus the fee itself doesn't impact the property manager themselves. Ie - I'm not going to get paid more to do my job because the landlords pay more so it wouldn't make a difference to the service I provide at all. The fee my agency gets paid does not benefit me what so ever.
It's not the agency you're investing in, it's the individual property manager.
Think about it
He didn't it through that far.
well ok since you asked the service agreement I will draw up will be a lot more bulkier the higher the fee, the lower this fee is the lighter it gets.
Now I have "let go" a lot of business in my time basically by saying to landlords as of day x your management fee shall increase by x. they come and complain and some just leave but that is ok in my mind.
not to mention that as I manage commercial not residential and on the higher fees my service agreement looks more like a power of attorney then the standard agreement you guys maybe used to.
Now I have "let go" a lot of business in my time basically by saying to landlords as of day x your management fee shall increase by x. they come and complain and some just leave but that is ok in my mind.
not to mention that as I manage commercial not residential and on the higher fees my service agreement looks more like a power of attorney then the standard agreement you guys maybe used to.
Plus the fee itself doesn't impact the property manager themselves. Ie - I'm not going to get paid more to do my job because the landlords pay more so it wouldn't make a difference to the service I provide at all. The fee my agency gets paid does not benefit me what so ever.
It's not the agency you're investing in, it's the individual property manager.
Think about it
So you don't think that the Property manager (regardless of their individual beliefs) would be getting told by the principal of the company to take better care of the owners who pay the higher rates?
Just never thought of it the way that you have.
Again, how does this mean the landlord will be getting better service?
I just don't understand how higher fees and larger management agreements mean that a landlord will be getting a higher level of service. Neither of these make a difference to the individual property manager.
Well no, not at all. All landlords are treated the same regardless. Again, management fees don't mean anything to the property manager. It's only the company that benefits from a higher management/letting fee.
ok for example my higher fee clients get the following:
maintenance is handled my us we insure that the works are completed on time and reasonably priced we also have a solicitor draw up the lease we will attend court hearing/mediation complete regular inspections (every quarter or 6 months) insure that ESM audit reports are completed that the fire extinguisher servicing and all other maintenance contracts are completed on time.
lower fee clients get none of the above service in fact we just collect the rent and outgoings and send it to you no thought is put into it whatsoever. tenant rings about a maintenance item I ring you and tell you to deal with it. the council tells me that the rates are due I post you the bill instead of finding out why it wasn't paid.
there is no service to most of my lower paying clients. in fact if anything takes me longer then 30 mins to figure out I send it to the client and have them sort it out. you pay the higher fees then I will bust my ar** to sort it out without getting you involved if possible.
maintenance is handled my us we insure that the works are completed on time and reasonably priced we also have a solicitor draw up the lease we will attend court hearing/mediation complete regular inspections (every quarter or 6 months) insure that ESM audit reports are completed that the fire extinguisher servicing and all other maintenance contracts are completed on time.
lower fee clients get none of the above service in fact we just collect the rent and outgoings and send it to you no thought is put into it whatsoever. tenant rings about a maintenance item I ring you and tell you to deal with it. the council tells me that the rates are due I post you the bill instead of finding out why it wasn't paid.
there is no service to most of my lower paying clients. in fact if anything takes me longer then 30 mins to figure out I send it to the client and have them sort it out. you pay the higher fees then I will bust my ar** to sort it out without getting you involved if possible.
higher fees means the agency can employ more staff to manage your property, keep property to pm ratios lower and pay more for higher quality staff.
Skimp on fees, the agency can only afford juniors at minimum wage... this means you don't get the experience required to effectively manage your property.
And PMs DO care about the rates, because most work under KPI's and know that the higher the fees they bring in the more money they will earn.
It still never ceases to amaze me that owners will try to skimp on fees when dealing with most likely their largest financial investment!
Pay peanuts, get monkeys.
Skimp on fees, the agency can only afford juniors at minimum wage... this means you don't get the experience required to effectively manage your property.
And PMs DO care about the rates, because most work under KPI's and know that the higher the fees they bring in the more money they will earn.
It still never ceases to amaze me that owners will try to skimp on fees when dealing with most likely their largest financial investment!
Pay peanuts, get monkeys.
I negotiated my fees with my PM when I signed up. When I was looking for a property manager, they were clearly the best, but they also charged more. At the time, I didn't feel like I really needed the best service (I only had one IP, and it didn't seem too complicated), but I felt that I wanted to offer them my business before giving it to someone else. So I asked if they would lower their fee to the average rate, and they said yes.
From my experience, a good PM will be professional with all their clients. They don't have a sliding performance scale depending on how much you pay them. Their satisfaction comes from knowing they do their job well. And a bad PM won't be better because you pay them more. I think it's ok to ask for a lower price, as long as you're reasonable and accept their right to say no.
From my experience, a good PM will be professional with all their clients. They don't have a sliding performance scale depending on how much you pay them. Their satisfaction comes from knowing they do their job well. And a bad PM won't be better because you pay them more. I think it's ok to ask for a lower price, as long as you're reasonable and accept their right to say no.
Exactly right.
I shopped around for a PM in werrington and I am very happy with what they have done. The previous PM were creating road blocks and wont let the tenants stay on. They actually send a notice to vacant without me knowing. I am settling tomorrow and cant wait to get rid of the old PM.
The new PM did a excellent job. She took the ownership and honestly I was only called when needed otherwise she just dealt with situation and now I have current tenants on a new lease and on a new rent.
But I agree. Commission is nothing to do with PM work ratio. If they do a good job then I would give them good reference to other friends who are also looking for PM.
