“It’s not you, it’s me.” A classic phrase, fit for any break up. Maybe not your break up with your substandard property manager though. Why? Because there’s a high chance that its not you, its them. In an unregulated industry, bad property management can raise its ugly head a little too often. You only have to look online or to the papers to see the horror stories around property managers. But in an industry where changing regulation is frequent and landlords are being asked to jump through hoops more regularly, a property manager can be worth their weight in gold.
They can be your knight in shining armour and they can be someone in your corner to help you fight the battle that is managing investment property?
So how do you choose your property manager? What are the most important things to base your decision on, what matters less and more importantly, if you chose a bad one at the start, how can you move on so you can begin your relationship with your new shiny property manager? As with any business relationship, the most important aspect of this entire exercise is trust. Do you trust that your property manager is going to bat for you every day? Do you trust that they are doing their utmost each and every day to make sure that the running of your investment property is going smoothly?
Do you trust them to answer the phone at 2am in the morning to deal with a burst water pipe?
If you answered no to any of these, you’re probably with the wrong property manager. Good property managers get the job done no matter what. They are solution oriented and have an intuitive understanding of your wants and needs as an investor. The really good ones will understand that not all property investors want the same thing and cater their service to you. Having a level of trust with your property manager stops the worry and allows them to get on with doing an amazing job for you and your tenants.
At the end of the day, if you trust one more than another, your decision has been made for you!?
The average period of a tenancy in Wellington is roughly two and a half years. This is echoed throughout most of the country. Why? Because the changes in legislation are making properties nicer places to live. Tenants want somewhere that they can call home and don’t want to be jumping from flat to flat, house to house every year. Likewise, the summertime property rush is arduous on tenants, so why bother? A lot of tenants prefer to be in one place for an extended period, minimising your vacancy and making life easier with a good tenant. Another massive area of importance is the knowledge that your property manager or prospective property manager has. A warning at this stage, that experience does not equate to knowledge per say. Old habits can die hard and in an industry which is being revolutionised rapidly, old hat thinking can quite quickly become unstuck. Of course, there are still occasions where the old ways are the best, but your property manager should know the Residential Tenancies Act back to front and upside down. They should understand the issues that you face as a property investor and have a knowledgeable and proactive approach to solving these issues for you. Most property managers are all over this, after all we have to be!
Make sure you are comfortable that you are dealing with someone who really knows what they are doing – after all, having your finger on the pulse is essential!
Believe it or not, fees aren’t the be all and end all when it comes to choosing a property manager. Is it important to make sure that the rates you are receiving are competitive? Of course. However, what is more important is the VALUE that your property manager adds. Some companies may drop their rates, but this may also mean that some of the items you thought you would receive as a part of the service are wanting throughout the management of your property. Some companies may charge a lower fee to begin with but include additional costs throughout the course of the management which end up making them more expensive anyway.
Cheap and good don’t always belong in the same sentence, especially when it comes to property management?
So, now that you know how to choose your property manager, how do you leave your old one? Most property managers will require one months written notice for you to leave their services. It is important that you also understand the costs involved. You may be charged a break fee, so it is important to understand what costs you are liable for before breaking the lease.
It is also essential that your tenants are informed of the change in management and who the new manager will be?
This is a hugely important part of the process as it can be an unsettling time for tenants. Knowing who the new manager will be will offer them a peace of mind. Make sure that you get a copy of all the important paperwork that you need from your property manager. This should include tenancy agreements, bond lodgement letters, change of agent forms and a copy of recent inspections as well as insulation and smoke alarm statements.
This will allow your new property manager to hit the ground running and reduce the time period it takes for your new property manager to make an impact on your portfolio?
The last, and most important step is to make sure that there is a concrete plan in place between the two companies for the transition. The last thing anyone wants is for a messy transition and more confusion and headache. Leaving your property manager then isn’t as hard as it sounds. It is so important to make sure that your portfolio is being taken care of the right way and it is essential to know that you have the right people in important positions. Picking a property manager, while time consuming initially, can be crucial to the success of your investments.
