If you’ve done your homework and bought a well designed, new build in a desirable location for the ideal tenants, you’re well on your way. The right tool for this part of your trade is in knowing how to find a trusted managing agent.
Remember, this is a person that will hand over the keys of your investment property to people you don’t know!
Here’s a summary of what we’ve learnt about finding a trusted property managing agent.
On the go? Here’s 30 seconds of key take outs:
- Securing long term quality tenants is the key to earning income from your property asset.
- Your time is valuable. Property management is a detailed, multi-tasking role. Find a good property managing agent to look after the tenancy of your property.
- Interview prospective property managing agents. Ask these 10 questions to screen a managing agent who will ensure your property is an income producing asset working for you.
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A good tenant is someone who desires making your property their home for the longer term. They want to make where they live, their social hub. A quality tenant earns a secure income. A tenant that will contribute to your future financial security is ideally a young family, or a couple planning to grow a family soon.
Your property managing agent is your key to finding quality tenants
You’ve got this far. Well done! You don’t have time to mess around with selecting good quality tenants, and all that managing a tenancy agreement involves. You need a property managing agent that is invested in helping you achieve your goals.
Property managers are the critical link between you and your cash flow. Property managers need to have great multi-tasking and negotiation skills. They’re your eyes and ears, especially when you’re investing from a distance.
How do you find a quality managing agent? Firstly, you need to understand the value that a property managing agent will bring to your property investment strategy.
What do property managing agents do?
A good property managing agent will save you loads of time and find quality tenants for your investment property. A good managing agent will do business with you seamlessly, so you can get on with your life while your asset starts bringing in an income. You’ll know you’ve found the right agent, when you only hear from them when you need to and your tenants have settled in for the long term.
Here’s all the stuff your managing agent will manage, while you get on with growing your property portfolio and the rest of your life.
Property managing agents will:
- find and screen good quality tenants
- ensure the tenancy agreement is rock solid and minimises risk
- lodge the rental bond with Fair Trading
- Manage the day to day tenancy stuff like reconciling payments, and responding to queries
- Assess, prioritise and coordinate repairs to the property
- Collect the rent and maintain rental records
- Coordinate and conduct property inspections
- Handle any disputes including following up late payments
- Pay you income – the rent earned from your property asset, less any costs and agency fees.
How to find a good property managing agent
Property management is a detailed, multi-tasking role. What you’re really looking for in a good property managing agent is industry smarts. You need an agent that really knows their stuff and prioritises high occupancy rates and optimal rental returns.
An effective property manager is energetic and keeps their eye on the market with periodic rental reviews. A good property managing agent will keep you informed of market shifts, as they happen and offer good advice to manage the shifts.
Shop around before you settle on a managing agent.
10 questions to ask to find a quality property managing agent
Here are the questions you’ll want to consider when you interview a managing agent.
Question #1: Are you a licensed managing agent?
It is against the law to practice real estate without a license. So as silly as this question may sound, it is a worthy one to ask straight up.
Question #2: How long have you been a property managing agent?
Property management experience is a key consideration. A managing agent is a specialist role. Engaging an agent who has experience in prospecting tenants through to resolving tenancy disputes, will minimise your stress and maximise financial returns.
Question #3: How many properties do you manage?
From our experience, an effective property manager should be able to manage 90 to 130 properties comfortably. A portfolio larger than this, will impact on the quality of service the property manager will be able to offer both you, and your tenants. A burnt out property manager may result in unhappy tenants, risking your occupancy rate and income.
Question #4: How long have you worked with this property management agency?
To make the most of your time, you’ll only want to be dealing through one point of contact. You simply don’t have time to deal with a carousel of property managers stepping up, taking the role for a spin, and then moving on to a bigger ride. What you’re looking for is a property manager that has been with the agency for a while, enjoys what they do and isn’t aspiring to land a property sales role tomorrow.
Question #5: How do you go about finding and screening prospective tenants?
What you’re looking for here, is a professional property managing agent who has proven systems in place.
First, a quality property managing agent will have a database of prospective tenants and recent enquiries to tap in to and reach with targeted advertising.
Remember, your property is the vehicle that will support your lifestyle. You want tenants that respect the physical environment around them. A good property managing agent will carry out police checks, reference checks and screening via a national tenancy data base, before handing over the keys to your income producing asset.
Here are the screening questions a quality property managing agent should ask a prospective tenant:
- Why are you moving?
- What is your employment situation?
- How much do you earn?
- Do you have any credit card debts or other expenses?
- Can you provide references from your employer and previous landlord?
- How many people will be living in the property?
- Do you have pets?
- When would you want to move in?
Question #6: How do you manage overdue rent payment?
What you’re looking is an agent that acts early and keeps everyone informed.
Within a few days of the due date, a managing agent must notify you and the tenant in writing if a rental payment is late. An agent that also makes a phone call to you and the tenant is demonstrating commitment to understanding and supporting you in reaching your goals.
You would also be looking for a solution focused professional. An example of this would be where the managing agent calls you to recommend a payment plan approach, and then follows up with the tenant.
Under the Residential Tenancies Act NSW rental payment in arrears of 14 days is grounds for the agent to serve notice on the tenants to vacate your property.
The best way to get a sense of how a prospective agent might manage tenancy breaches is to ask them to share an example of how they have gone about resolving a tenancy dispute.
Question #7: How do you handle requests and repairs from tenants?
Remember, you’ll be paying this agent a management fee – the tenants are paying you! This means, the agent will be working for you. A good property agent will always consider tenant requests in light of your rental returns. You’re looking for an agent that will ask lots of questions of tenants to weed out ‘nice to haves’ from necessary or urgent repairs.
Question #8: How do you check repairs once they’ve been completed?
You want to make sure that the tenants your property agent has signed up, are chuffed with their home, and want to settle in for the longer term. You want a managing agent that shares your goal. Asking how a managing agent follows up on repairs is a good way to get a sense of whether you’re talking to a hungry deal maker eager to seal the deal and move on, or someone who has made property management their trade. A career managing agent will put your needs first – which means also looking after your tenants and your property asset.
Question #9: Tell me about your experiences at the Residential Tenancy Tribunal.
Anyone in a property management gig for long enough, will have to deal with a tenancy dispute. Despite taking preventative measures, tenancy disputes are inevitable based on human nature and unplanned external events. Ask your prospective managing agent to share their experiences, and the outcomes to get a sense of how they will roll under pressure, on your behalf.
Question #10: What do your management fees cover, and how much will I be paying you?
If you’re happy with the managing agent’s responses to your questions so far, you’re heading in the right direction. Now it’s time to find out how much quality costs, and what services are included and are not included in the management fees. If you’ve shortlisted a couple of managing agents, this could help you make your final decision. Don’t let a ‘bargain’ cloud your judgement of capability. Your managing agent is your financial growth partner. You want to be employing someone you trust.
Always, always read the fine print before signing an agreement. If you’re not sure, ask the agent to clarify.
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Free investor tools: Capital Properties Team [Property Manager] | 10 Questions to ask your investment property manager
