What do you look for in a PM?

[Celivia]

I am at the stage of signing a contract to buy my first IP. So I never had anything to do with property managers yet. I now will have to look for a property manager soon. The property I'm buying has been owner-occupied, so never has been managed.

How can you tell whether managers would make excellent managers? DO some of you actually interview them to find out how they operate? I kind of want to know what they'll give me for my money.

DO you usually ask them not only what their fees are, but also what they will do/won't do for you?

Are they supposed to give you some kind of contract in which they state all their duties etc?

Looking forward to your replies.
Celivia

 

[Desto]

Celivia,

Welcome to the fascinating world of property investing!

The PM will defintinetly provide you with a contract detailing their responsibilities. At least they do in Queensland, I'm sure they are required to do so in other States as well.

Here they provide you with a standard REIQ property management contract which you can alter according to your needs and in agreement with your PM.

At the very least, I would ask them,

• how do often do they keep you up to date with financials of your property
• How will they follow up on late rental payments
• How do they deal with repairs

Other forumites will add to this list.

I sacked my PM because she had all of her numbers wrong, didn't follow up on phone calls within a reasonable time, and was fairly slack in dealing with trades people who were to maintain my properties. I'm managing my own now as a result. I understand this is not always feasible.

Read the contract you receive carefully, and feel free to modify to suit your needs.

Desto.

 

[abcdiamond]

Don't bother reading the fancy brochure the PM gives you, or even listening to what they say verbally, just read the contract that you sign !
The terms may be different....

eg:

* Brochure CLEARLY says: No fees for advertising unless agreed to.
* The agreement says: up to $75 in advertising.

They then charge you advertising, and say you agreed to it when you signed the agreement

Can you guess that i'm not happy with my ex-PM (that being just one of a few problems)

 

[kierank]

... Ask them how many times they have been to the Tribunal and how many times they have been successful.

If they have been lots, then I would question their ability to select good tenants; if they have never been, I would be concerned about their depth of experience.

 

[Mitzi]

Celivia, Hi,

Selection of your PM is very important. Maturity in a PM (ok, wrinkled is good) is a plus. A good one will have a portfolio showing certificates of accreditation, real estate courses, maybe testimonials from satisfied owners - that sort of thing. You need to feel comfortable with her/him. Sorry guys but women seem to be more accepted in this role. I suggest you invite several (separately) to view the property and "do their spiel". Ask about tenant selection (what references etc and checks with a tenant default data base) and request that all applicants be discussed with you before anyone is approved. Check on length of inspection (3 months is preferred). Ask if you can attend sometimes. This keeps you in touch with wear and tear and peace of mind.

As for the Tribunal experience - in 10 years as PM I attended 2 - won both - mostly was able to mediate before it got to that stage.

Ask how long they have done the job. Also, when signing the agreement (which is required by law) make sure the contract can be terminated (by either side) with one month's notice. Some tie you up for 3 months (or longer) and that could be drastic if the property is not being managed properly. Bear in mind, PMs suffer burn out at a high rate - the revolving door syndrome - and your maure PM gets carted to the funny farm and you can suddenly be in the hands of some poor little 18 yr old receptionist who doesn't have a clue!

Someone with a few miles on the clock (in every respect) is a safer bet - generally. Ask your PM about a Landlord Protection Policy. Real Estate companies should have an umbrella policy for owners designed specifically for the Landlord. These are around $200 pa, tax deductible and help you sleep. This is over and above your usual insurance (building, contents, public risk). Where a tenant takes off (does damage maybe) and breaks a lease, these are your safety net.

Good luck

Mitzi

 

[Mitzi]

Celivia, Hi,

Selection of your PM is very important. Maturity in a PM (ok, wrinkled is good) is a plus. A good one will have a portfolio showing certificates of accreditation, real estate courses, maybe testimonials from satisfied owners - that sort of thing. You need to feel comfortable with her/him. Sorry guys but women seem to be more accepted in this role. I suggest you invite several (separately) to view the property and "do their spiel". Ask about tenant selection (what references etc and checks with a tenant default data base) and request that all applicants be discussed with you before anyone is approved. Check on length of inspection (3 months is preferred). Ask if you can attend sometimes. This keeps you in touch with wear and tear and peace of mind.

As for the Tribunal experience - in 10 years as PM I attended 2 - won both - mostly was able to mediate before it got to that stage.

Ask how long they have done the job. Also, when signing the agreement (which is required by law) make sure the contract can be terminated (by either side) with one month's notice. Some tie you up for 3 months (or longer) and that could be drastic if the property is not being managed properly. Bear in mind, PMs suffer burn out at a high rate - the revolving door syndrome - and your maure PM gets carted to the funny farm and you can suddenly be in the hands of some poor little 18 yr old receptionist who doesn't have a clue!

Someone with a few miles on the clock (in every respect) is a safer bet - generally. Ask your PM about a Landlord Protection Policy. Real Estate companies should have an umbrella policy for owners designed specifically for the Landlord. These are around $200 pa, tax deductible and help you sleep. This is over and above your usual insurance (building, contents, public risk). Where a tenant takes off (does damage maybe) and breaks a lease, these are your safety net.

Good luck

Mitzi

 

[simonjulie]

Hi Celivia
My 2 cents worth on this is that your results and outcomes with a property manager depends on how well YOU manage them. In my opinion one should NEVER have a set and forget mentality. It wont work.
Kind regards
Simon

 

[Celivia]

Wonderful tips, I have printed them out. This will help me a great deal making a more informed choice.
Thanks!

 

[suggo]

A PM that doesn't work ONLY 4 days a week (none of which are weekend days)

An office that actually does know whats going on with your rental when the PM isn't there!

Both of these things our soon to be former PM doesnt do!!

 

[Patosan]

For me responsiveness is a key quality. In contact, listening and action.
I admit it's probably due to the fact that I'm in Japan.
Email turnaround time is critical ... I can't be there or pop in.
This quality shows a level of respect and concern for the client ... you. This goes a long way with me.

A good rep from other clients, if you can hear or get them. Word of mouth is the best advertising.

I'm not one to be won over by credetials or courses, many a moron or ass has these. Can they do the job and care about doing a good job is my main question.

Good luck !

 

[Apprentice]

After hours service.

My PM is available after hours via mobile if needed. They also kept in mind I was still looking at other properties, and give me a call from time to time to let me kow what's on the market. Service like this means they'll probably get the other property when I sack the other PM.

 

[Jacque]

GOOD COMMUNICATION
This means they actually follow up with phonecalls and ring back when promised.

NO UNAUTHORISED REPAIRS
I have this written all over my file just in case the PM "slips" and orders a repair that I know nothing about. Eg: one of my PM's authorised cleaning (verbally told me it would come to no more than $180 or so) for two of my houses, and was surprised to find that the bill for just over $500 (yes you read it right) was unwelcome!! I ask my PM's to let me know BEFOREHAND of the price/quote before I proceed. If in doubt (or they're fudging a figure) I ask for it in writing, so that we're all clear.

ASK TO ATTEND ALL INSPECTIONS
Also let the PM know that you will be attending most of these, so advance notice will be necessary. Even if you don't, it keeps the PM on her/his toes and they should be ringing you after each inspection, regardless of whether or not there were problems.