Professional property management can sometimes feel like it’s hard to come by. And when you’ve been let down once, it can be hard to rebuild your trust in a property manager’s quality and ability to take good care of your property.
The last thing you want is to be kept awake at night with the thought of your investment property being in incapable hands. With a good property manager comes peace of mind and better returns on your investment property.
36% of owners we surveyed explained that “trust in property manager’s abilities” was a big pain point while they were searching for a new agent.
So, what do you look for in a property manager, and how do you know if your property manager is legitimate?
In this blog post, we outline the nine signs of professional property management services. That way, you’ll know what to look for in a property management company to tell if the person managing your rental property is a proactive doer or a lacklustre bystander.
1. They have good communication skills
Professional property managers know when to keep you in the loop on your investment property and what you don’t need to be bothered with. What’s more, is that they don’t keep you hanging when you’re trying to reach out and respond in a reasonable time.
A good rule of thumb is that you should receive a reply no more than two hours later, even if it’s just “I’m looking into this”, acknowledgement and knowing you’ve been heard helps a lot.
A property manager who knows how to communicate helps you:
- Keep tenants happy
- Not feel like you’re being kept in the dark
- Get better quotes on property maintenance
- Solve tensions and disputes orderly
Testing this is one of the best things you can do when finding a good property manager before signing on. If they spend more than a day getting back to you when you’ve notified them that you’re interested, they probably won’t be super responsive typically either.
2. They’re well-organised
As much as you might like the idea of having a property manager solely dedicated to your particular property, this isn’t the case. The real estate business is a busy one. So, you can expect your property manager to be handling multiple properties with multiple owners and tenants at any one time.
Did you know that the average traditional property manager takes care of as many as 150 properties independently? With these types of numbers, you need to be an organisational beast to make it work out.
Having a readily accessible and detailed database of properties is a must! But so is having a seamless filing system for paperwork! A property manager who uses technology will be better prepared for this.
It would help if you asked a potential new property manager about the tools they use to help them stay organised and on top of all the properties they manage.
Without it, your property manager will struggle to handle the tasks and demands they contend with daily. With that, you can be sure they’ll work to attend to yours.
You should ask yourself if your property manager has provided you with inspection reports that show how everything is faring. If your tenants have reached out to you because the property manager hasn’t been caught up on requests, then it might be time to consider switching property managers.
3. They’re good with technology
Technology in property management is good news for you as an owner and for your tenants, but only if you have a property manager who knows how to use it.
The property management space is becoming ever more digital, with many new-model property managers entering the room to use technology for better solutions. This lets property managers keep an eye on and quickly respond to all aspects of operations, including maintenance requests, late rent, or lease renewals.
That being said, technology shouldn’t replace the people aspect of property management. It’s there to make it better.
Professional property managers should follow a similar philosophy. If your property management company’s technology only makes tasks a headache and take longer than they need to, then it’s a clear sign that you should switch property managers.
If it helps you keep in touch and make it easier to get a glimpse into your property, then they’re doing it right.
4. They have the knowledge they need to help you succeed
Knowledge is a great indicator to know if your property manager is legitimate. Their expertise and knowledge in the property market and real estate space should set you up for a successful investing journey. Essentially, professional property managers have the answers you need, or they know how to find them.
There are generally two types of knowledge you want a professional property manager to have:
- Local market knowledge
- Legal knowledge
Let’s dig into these.
Local market knowledge
Having a property manager who is well versed in the local rental market is an easy way to give you that extra edge. It will mean that they know:
- How to make your rental property stand out in your specific area
- The right amount of rent to charge on your rental property advertisement – not overcharging or undercharging
- What features local tenants are looking for in a property to help increase your returns
- How to attract tenants through a catered advertising campaign
- What time of year demand is quiet – i.e. when to not raise the rent or get rid of tenants
A professional property manager with this kind of knowledge will ensure you’re keeping your vacancy rates as low as possible.
One of the most important duties and responsibilities of a property manager is being there when things hit the legal fan. Without a professional property manager who knows real estate legislation in and out, you put yourself at risk of getting caught in a legal bind.
Say you want to evict a tenant. Do you know the rights and responsibilities of tenants in your local state? The notice period you have to give? These are examples of the things a legitimate property manager will stay on top of for you.
If you have a legal question, professional property managers can answer it.
5. They’re personable and make you feel at ease
Can you imagine having Scrooge as a property manager? At the end of that day, a property manager is dealing with people. So you want someone who knows how to get along with others and build good landlord-tenant relationships.
Professional property management means being able to engage with owners and tenants with a friendly and positive attitude. It means having those exceptional customer service skills that are essential in developing trusting relationships.
The better your tenants get along with your property manager (and by extension, you), the better chance:
- That your tenants will renew their lease
- You have of getting word-of-mouth recommendations about your property
- You’ll be notified of necessary maintenance and repairs at a reasonable timing
6. They’re assertive when the situation calls for it
In the world of real estate, things don’t always run smoothly. There are bound to be a few hiccups here and there. When this happens, you’re going to want a property manager who can rise to the occasion and make decisions.
Of course, your property manager should always show your tenants respect and compassion. But, at the same time, they need to be a chameleon – able to change things up according to the situation.
It could be a difficult tenant or less than a thorough contractor. Either way, your property manager must know when to be accommodating and when to be assertive.
Asking for a copy of your property manager-tenant correspondences will tell you straight away whether they have that strong spirit.
High-quality property management means knowing when to push your tenant for rent arrears and when to show leniency. And if the tenant is clearly in the wrong but refuses to forfeit, the property manager is not afraid to show strength and make the appropriate decision.
7. They have the experience to back up their decisions
There’s no question having your head in the books will tell you a lot about your profession. But, let’s face it, knowledge is nothing without experience. And that’s especially the case with professional property management.
You want an agent who either has a wealth of personal experience in the industry or is part of a highly experienced property expert team.
Experience is one of the essential criteria property owners have when looking for a new property manager and with good reason.
Experience will mean your property manager is a seasoned veteran in:
- Dealing with problematic tenants
- Resolving repair/maintenance issues and getting fair quotes
- Conducting routine inspections
- Dealing with day-to-day things like rent collection
Finding out how much experience your property manager has can be as easy as asking the questions: How many years have you been in real estate? How many properties have you managed? And if they lack the experience, ask them how they plan to accommodate their lack of years spent in the role.
8. They take accountability
A big part of being trustworthy is coming clean about your mistakes. We’ve all been there, and we know it’s not the easiest thing to do. But accountability is an absolute cornerstone of professional property management.
Problems do arise. It’s almost a guarantee. But your property manager should never shy away from taking responsibility for their errors or try to shift the blame.
Honesty and transparency are two more critical signs of high-quality property management. You should come to terms with the fact that your property manager is only an imperfect human, but you should not accept it if they don’t take responsibility for their mistakes.
9. They have an investor mindset
When all is said and done, you want your property manager to help you increase your returns. You’re an investor, after all. So, you’re going to want a property manager who will treat your property as if they were real estate investors themselves.
A good property manager will give you recommendations for how you could improve the returns on your rental property. Where possible, they will look to:
- Maximise your rental yield
- Minimise vacancy rates
- Stay on top of maintenance issues before they turn costly
- Increase rent when appropriate
- Add value to your property through local insights
But they will also be conscious of your investment strategy and make sure your property is being taxed effectively. A good property manager will know the difference between positive gearing and negative gearing and how to maximise return for one or the other.
A property manager who lacks an investor mindset could easily lead to poor cash flow. So, keep an eye on your bottom line to know if they have the investor instinct.
Do You Need a Local Property Manager? Local vs National Compared
Most property owners in Australia hold the belief that local property management is king. You might have asked a colleague what to look for in a property management company and been told that locality and expertise are prime features, especially when finding good tenants is concerned.
The equation seems simple. A local property manager is more focused on a smaller area, will have more expertise and knowledge about your advertising in your neighbourhood, and will have more time to manage your property since they’re a smaller agency with fewer clients, right?
36% of owners who come to us indicate their trust in a property manager’s abilities is their biggest fear during leasing.
As it turns out, local property managers aren’t always the right fit for you and your rental property. There are pros and cons to local leasing managers and national property managers, and you should consider these before deciding on the right fit for you based on your needs.
We’ll help you make that decision by comparing national and local property managers and explaining when you should go with one or the other.
Using a local property manager
Many believe that picking a local property manager should be your primary criterion. You might have been told that you need an agent who knows the local area above all else.
But is this true?
To make your life easier, we have laid out both the pros and cons of local property management to determine whether or not local truly is king.
Pros and cons of using a local property manager
They know the ins and outs of the local area and market, which is perfect for catering your property to the target demographic.
They also may get insider information or contacts. For example, if an owner is considering selling, it may result in a golden nugget investment for you.
They can do rental inspections super easy. They’ll also be able to quickly respond to call-outs if they’re in the local area.
Better yet, they’ll be able to observe any potential misconduct to the property if they regularly pass by your rental property.
They know local vendors. Local property managers usually have a working relationship with reputable contractors and tradespeople in the area.
They manage fewer properties. This means they often have more time to prioritise your property and your tenants in a more personalised way. Granted, this comes at a higher cost.
They’re small, and there are some disadvantages of being a small fish in a big pond.
Since they work on a much smaller scale, they won’t have much money to invest in their processes and won’t have as many resources at their disposal as a national property manager.
They tend to charge more. Local leasing managers typically charge between 7-10% of your monthly rent in property management fees.
They also tend to use a traditional property management model, so there are typically extra surcharges for things like admin fees, credit checks and so on. It tends to add up.
They might be inexperienced. Since they work on a smaller scale, they manage fewer properties.
This means that if your specific property manager has not dealt with problem tenants before or are unsure when and how to evict a tenant, they can quickly fall behind, make errors, and lose credibility with your tenants.
Using a national property manager
Now that you know some of the benefits and drawbacks of using a local property manager let’s do the same for the counter-option, national property managers.
National agencies have garnered a reputation for being bureaucratic, slow to respond and lacking flexibility over the years. Plus, you want someone with local expertise managing your rental property.
The matter of fact is that national property management is an entirely valid option for many. These days, plenty of federal agencies have found clever solutions that help them service you faster and ensure you still don’t lose out on local expertise.
Pros and cons of using a national property manager
National property managers typically charge you less since they work on a much larger scale, bringing their overheads down.
They have extensive resources and expertise. Since they operate at a large scale, they have more to spend and more extensive tenancy databases.
They also often have platforms dedicated to identifying trends and data at their disposal to grab market insights.
They will help you stay updated on laws and compliance, even if you have multiple properties in multiple states.
National property managers tend to develop clever solutions to make up for the lack of local expertise.
So, should you use a local or national property manager?
While having local knowledge and expertise is crucial, you need to know that no local knowledge will outweigh having simple destructive processes.
Therefore, first and foremost, you should always check to see if it’s a good property management company.
Use our guide for finding a good property manager when you go on the hunt. You’ll get the best questions to ask in an interview and what to look for.
Apart from that, we’ll now explain the situations in which you should pick either option.
- Use local property management if you feel you’ll benefit from the local expertise and more personal approach. Just remember that you need to understand what is included in the property management fees. If you’re paying a lot of money for not a lot of service, it’s not going to be worth it. There are national property managers who have clever solutions to getting you local expertise, so there are options.
- Use a national property manager if you own multiple investment properties. Hiring one property manager for each location simply isn’t going to end well for you. Tech-driven property managers are especially good at making owning multiple rental properties feel more like you own just one.
- Use a national property manager if you’re trying to save on costs. Since local agents tend to charge quite a bit more, getting a national property manager with a more reasonable price is a good option.
Your top priority should always be that you’re picking a good property manager, not focusing too much on whether it’s a local or a national one.
If you put in the work and do your research on the agency and its processes, you’ll significantly increase your chances of scoring an agent who will take proper care of your investment property.