I would ask how many properties each PM manages. If the number is really high, then you would question how capable they are of giving your property the attention it deserves. I’ve recently got a job at a property management place to get some experience and my boss manages nearly 100! For this reason I would not use her, even though she has a ‘good reputation’. I’m doing the loose end stuff (like tenancy checklists) and it is quite apparent that things are getting done at the last minute because she is just so snowed under.

You could also ask for a reference from one of their landlords who has a currently tenanted property and one who doesn’t to give you a better idea of the overall service they provide.

When I was looking back in October, I got the local PMs to send me through their details (either by post or email) and then compiled a spreadsheet to compare all the costs/services. I found that this made it really easy to see everything on one sheet as opposed to sifting through a mountain of paperwork. I would also recommend that you use someone local who knows the area well and who therefor has a better idea of the local market for rental reviews.

Lastly (and this is completely subjective) I took their personalities into account. Management fees are really high in WA if you only have one property because you are limited with your ability to negotiate a flat fee, not sure what the deal is in NSW. One guy I spoke to was .5% cheaper than the next cheapest, but I felt like he was a bit of a cowboy with the way he presented himself – I didn’t feel like I could trust him. So I went with the next one because she was very personable and interested in my input. To date I feel like this was a smart move as she keeps me well informed of issues ahead of time and always asks before charging me money for maintenance issues. If you have a good raport with your PM, there is less likely to be a breakdown in communication.

Best of luck to you

[exhappy]

What about if the long term plan is to purchase IPs that will eventually fund a PPOR in a very desirable location? Could you take the chance buying -ve geared properties (with good growth potential) and pay down the debt over time until they become +ve (or rent goes up)? The reason I ask is that someone (who is an experienced investor and works in the business) told me that purchasing for +ve cashflow is the quickest way to destroy wealth creation [weird]. My one (and only) property is -vely geared and I thought it only logical that this would need to be offset with cashflow +ve IPs in order to continue growing the portfolio.
I haven’t had a chance to quiz him further on this. Is he talking crap?
Just to reiterate, the long term goal is for IPs to fund beachside PPOR, then retirement. I’m 28.

Hi Katie,

I used a buyer agent in WA to help me source our first property. I set up a meeting with the director who spent a couple of hours with me outlining what they do etc. Apparently this was a complete novelty for them as they rarely meet clients face to face, but it helped me to feel confident that I was parting with the finders fee for the right reasons. If you use one, I would recommend setting up a meeting for your own peace of mind. You can also compare a few that way. I used the same approach to find an accountant (luckily) because the first guy couldn’t care less and I wouldn’t have known that if I hadn’t met him face to face.

With regards to property managers, here are a few questions I would ask them before signing up:

1 How many properties does the property manager look after? If is more than 100 then you would really think that the service they provide may be limited.

2 Ask them how many vacant properties they have on their books.

3 Get a reference from one of their clients who has a tenant in place and a reference from a client who has a current vacancy. This will give you a good guide to the property manager’s performance.

I would also look out for the personality of the manager. If you get a bad vibe, it may be advisable to go to the next manager even if there fees were cheaper because apparently a good vibe from the managers is always good and you have fewer problems. Can’t back this one up, although I’m sure others will be able to clarify.

Good luck and happy investing!

Is it still wise to get an IO loan on an IP that you plan to hold for the long, long term? Don’t you have to pay something off the principle eventually?

You can also go to realestate.com.au and click on ‘Find me a buyer’s Agent’. This is where I found mine.