Best Qus to ask Prop Managers

Hi FL,
here is a link to some questions you should be asking, it is based on SA but you can adjust them to suit!

http://www.adprop.com.au/cgi-bin/page.cgi?id=288

Some things to keep in mind just from my own experience.
Cheap management fees do not mean that you are saving money!

We recently listed a property previously managed by a name brand agency, their management fees were 7% ours are 9%
They had the property rented for $180 per week, it’s true market rent is $230 per week and it had no rent increases for 3 years (it is easy for the pm’s to rent it at $180). We have put the rent up right away to $210 with a further increase to $230 in 6 months (so that we don’t shock the tenant too much)

There was another property we recently took over with a landlord that had all his properties on periodic agreements!
management fees were 7% (again). His pm was charging him a 2 week letting fee every time they renewed the lease for the same tenant!!!! He let the tenancy expire to save money.

They should not be charging anything to renew leases for the same tenant!!!!

Letting a clients lease expire means that he was also paying landlords insurance for nothing, if he had tried to claim rent arrears, most landlords policies would not honour the claim unless a written fixed term lease was in place! He was not even advised this by the previous agent!

There were 3 properties taken over this month by us with NO leases in place, there was a verbal agreement between the pm and the tenant! These were all from big franchise agencies!

If I can cauthion you about one thing, that is to find a company that has a primary focus on property management and it is not just a side branch to the main sales department.

Recently, I heared this from a principal of one franchise!

“95% of properties we have in our rent roll are dogs, they are not earning money for the business and the only way we can covert them to a profit is to encourage the landlords to sell”

Getting a sales commission from your rental properties is more important to most agencies than managing them, that is the only reason why they have it there! Please be very careful!!!!

Investment Property Management
http://www.adprop.com.au

Dr X – where are you located? Can you recommend anyone in Melbourne?

Julie
Property Conveyancer
Melbourne

100 to 120 properties is not unreasonable for a full time property manager as long as someone else in the office is taking care of the end of month landlord statements. If they are also doing trust accounting then 100 is too much!

Investment Property Management
http://www.adprop.com.au

Congradulations on your first IP.
The following is an extract of an article off our website about Property Management, sorry its a bit longer than 3 questions!

There is considerably more to Property management than just collecting rent – ask any property manager! Good property management plays an important role in ensuring your property receives maximum returns and remains in tip-top condition.

Role of a Property Manager
An efficient property manager is well worth the relatively small fees charged. Responsibilities of a manager can include:

• Appraise the property for rental and assess the market rental amount
• Interview, screen and select suitable tenants
• Prepare initial condition report, lease documentation and bond authority and collect initial payment
• Receive rent and chase late payers
• Conduct periodic inspections
• Report damage or maintenance issues to landlord and arrange for rectification where appropriate
• Handle all tenant communications
• Co-ordinate the moving out of tenants at termination of lease
• Appear before Tribunal in cases of rent default or other serious issues.

Having a professional property manager on your “team” will help ensure maximum return on your investment property and remove the frustrations often associated with dealing directly with tenants, as well as saving you considerable time and hassle.

What should I Look for in a Property Manager
Although property mangers are usually part of a real estate office, they should ideally be a separate department from the general Sales area. To reduce the risk of problems arising, you should ensure the office has efficient business systems and procedures in place to deal with daily issues that may arise such as emergency repair requirements and late rent payments.

Your property security is important so insist that the property manager conducts personal inspections, rather than just hands out keys to strangers who walk in off the street. This opportunity will allow the property manager additional time to assess the character of the applicant and ask questions.

Take the time to interview several property managers to ensure you feel confident about their role. Ask your potential property manager questions, such as:

Suitability:
• How long have you been a property manager?
• What qualifications and ongoing training do you have?
• Do you have a good up-to-date understanding of State legislation and important caselaw?
• What property investment background do you have?

Financials:
• How would you assess the market rent on our property?
• How would you maximise the return on our property?
• What initial letting fees and commissions do you charge?
• What ongoing letting fees and commissions do you charge?
• Do you charge re-letting fees if a tenant re-signs at the end of a lease or leaves early?
• Do you charge for attendance at Tribunal and associated administrative work?
• Do you charge any “hidden fees” such as for fortnightly/monthly statements or administrative tasks?

Procedures:
• How will you advertise and market my property and what costs are involved?
• How do you document conditions reports and do you take photos?
• How do you screen prospective tenants and what references and other checks do you make?
• How much bond do you collect and how do you carry out the administration for this?
• How often is rent collected and paid?
• What procedures do you follow if rent is unpaid?
• How often are inspections made and what procedure do you carry out?

Finding the right Tenant
Applicants should be required to complete a standard form detailing personal information including current and previous addresses and whether they are rental properties. Photo ID and proof of income should be shown and employee and character references should also be provided. All information should be carefully checked and verified by the property manager and a check of the National Tenant Database should be carried out. Based on all the details collected a comprehensive assessment should be made of each applicant.
The property manager should then discuss all applications with the landlord and recommend the best choice. Once a suitable tenant has been found, a tenancy agreement will then be prepared along with a condition report, lease and bond form, all of which require signature by the tenant. The condition report should be backed by photographic evidence of the condition of the property (both inside and out), which may be used as proof in the event of a dispute regarding the state of the property at a later stage.
When a tenant vacates the property, the property manager should provide the tenant with a detailed checklist of items requiring cleaning and attention before leaving and should reinforce that, subject to normal wear and tear, the property must be left in the same state it was in when the tenant initially took occupation of the property. You as the owner should also be offered the opportunity to inspect the property before the bond is refunded.

AmandaBS
http://www.propertydivas.com.au
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