Managing Your Investment

Once you have purchased an investment property, you need to consider how you will manage it. Property management is a big responsibility as tasks such as finding tenants, chasing rental payments and coordinating maintenance can be time consuming.

When managing your investment property, there are two options to be considered; self management or hiring a property manager to do it for you. It is important to weigh up the facts and consider the pros and cons of each option before making a decision.

 

The Pros and Cons of Self Management vs. a Property Manager

Table 4: The Pros and Cons of Self Management vs. a Property Manager

	Property Manager	Personal Management
Pros	Time: A property manager will take care of all time consuming tasks involved in managing your investment. Once a property has been leased, there is little more you need to do; they will take care of the rest. Emotional attachment: You will remain emotionally detached from the property when difficult matters need to be dealt with such as damage to your property, difficult tenants, etc. Industry knowledge: A property manager is an expert in all areas of property management. They can advise you on the optimal return for your property based on current market conditions. Tradesmen experience: As they manage a range of properties, they will have access to reputable trades people to perform maintenance on your behalf.	Agent fees: You will save on property management fees. Management: You will manage the property better than anyone else as you will be emotionally attached to the investment you have made. Top priority: As it is your investment, it will be your top priority to ensure it is tenanted, whereas a property manager may have many properties to manage, meaning yours may not be a top priority.
Cons	Agent fees: You will have to pay the agent who is representing you and your property an ongoing commission / fee. Management: A property manager may not manage your property like you would.	Time: Self management of an investment property can be very time consuming and stressful due to ongoing management tasks i.e. chasing rent payments, organising maintenance and inspections, etc. Emotional attachment: You may become too emotionally attached to the property when dealing with problematic tenants. Industry knowledge: You will not have up-to-date, vital information that an agent may have such as information on the current market, a register of available tenants, tenant history, etc. Marketing: You will not have access to all of the tools and websites needed to effectively market your property. Agents have access to websites that are not available to the “Self Management” market. This may impact on the rental return you can gain on your property.

 

Choosing a Property Manager

A property manager can play a vital role in the rental process of an investment property. The property manager will seek to maximise weekly rental income and source high quality tenants who will best take care of your asset. If you have decided to have a property manager represent you and your property, it is crucial to choose wisely.

Once you have shortlisted a few potential property managers, it is important to meet with them individually to discuss the possible rental of your property.

 

Questions To Ask When Interviewing a Property Manager

1. Does your agency have a dedicated property management department?
   Some agencies will view the task of property management as less important than selling and will therefore leave this task up to the front desk staff or receptionists. . Discover if the agency is experienced in the area of property management and has dedicated staff to effectively manage your property.
2. Is a director/owner of the agency overseeing the property management department?
   How focused is the agency on property management? The more important property management is to an agency, the more likely they are to effectively manage your asset.
3. How many years of experience do you have in property management?
   Experienced property managers will be able to attract the best tenants to look after your property and deal with those that become difficult.
4. Can you provide me with a written comparison on rental values in the market?
   An experienced and knowledgeable agent will be able to benchmark comparable rental properties on the market and advise you of the optimal rental return you should receive from your property.
5. What is your process for reviewing potential tenants?
   How do they determine whether the tenant is suitable for a property? Do they conduct police checks, or checks regarding their past rental history, current employment, etc?
6. How many properties are you managing at the moment?
   Are they representing many other people, hence being reputable and successful? Bigger however is not always better, it is also important to establish if you will be a priority and get the service and attention required during the property management process.
7. Will you go to court to represent me if needed?
   In the case that you experience difficult tenants, you may need to go to court to resolve certain issues about the bond or other matters. The property manager you decide on will need to be experienced and willing to support you in these times.
8. Will you advise me of any maintenance and repairs that need to be made to the property?
   In particular when non urgent repairs need to be made, will you seek approval before getting items repaired?
9. What are your fees?
   Enquire about management fees as well as any other costs a property manager may charge. Typical fees you may incur include those related to sourcing tenants, ongoing management of property and monthly statement fees.
10. Can I please see some references or contact details of the landlords using your property management services?
    What level of service was provided to past clients? Did they take care of the landlord and follow through on all which was promised?

Property Management Fees

If you have chosen for your property to be managed via an agent, it is important to understand the fees and costs that are associated with property management. Generally, this monthly fee covers the continual task of property management tasks such as: inspections, rent collection, etc. In some cases, agents may charge additional fees to cover the cost of finding a tenant. Property management fees will vary from state to state.

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