How to choose a property manager and why it matters

Some landlords baulk at the idea of handing over a portion of their rent each month to a property manager – and may also face additional costs depending on the agency, such as advertising and tenancy renewal fees.

But experienced property managers can be well worth their money, says Luke Bindley, the founder of Sydney-based Austin Buyers Agents. And it’s such a crucial role that you may want to take the time to find a good one.

He says a good property manager can play a valuable role. “When you’ve invested hundreds of thousands of dollars into a property, it doesn’t make sense to trust just anyone.”

Good property managers are often great communicators, forming the all-important link between tenant and owner. “A strong property manager aims to support clear, consistent communication between both parties, focusing on solutions rather than problems and resolving issues before they become costly or stressful,” Bindley says.

A good property manager will typically vet applicants and know how to strike the right balance between rental income and tenant retention, he says.

They can also help you understand and meet relevant compliance and tenancy law obligations, and through inspections and communication with tenants, can help you keep on top of any maintenance or repair requirements – something that is not only good for tenant relations and the long-term value of your property, but may help reduce the risk of legal liability claims, according to landlord insurance specialist Terri Scheer. Similarly, a tailored landlord insurance policy may help protect you from the risk of legal liability, property damage and loss of rent, subject to the policy terms and conditions.

And if relations with tenants go pear-shaped, a good property manager can support you by representing your interests in line with the law, including at tribunals where permitted.

So how do you find one?

Ask the right questions

Bindley is a fan of boutique, specialist property management agencies, where, he says, you’re more likely to find staff continuity, attention to detail and a focus on building long-term relationships.

On the other hand, larger agencies can have their pluses, too, he says, such as bigger teams (meaning less reliance on individuals) and lower fees.

It can be helpful to compare a few managers from different agencies before you sign on the dotted line. Bindley recommends asking them some key questions:

• How many properties do you manage? 
• What is your communication style (phone calls, email, etc) and can you communicate using my preferred style?
• How do you select the right tenant, and what is the screening process (including reference checks conducted in line with applicable privacy and anti-discrimination laws)?
• What do routine inspections involve, and how frequently are they carried out? 
• How can you help me stay compliant with current tenancy laws?
• What is staff retention like within your business?

Red flags to watch out for include large portfolios per property manager, high staff turnover within the business, a weak knowledge of legislation and poor communication, Bindley says.

Unusually low fees can also be a warning sign. Your property manager may be responsible for tasks that help protect your property, support rental returns, and reduce administrative burden, so it can be worth understanding what is (and isn’t) included in any fee proposal.

Take your time finding someone, and don’t be shy about grilling the candidates, Bindley says. “This person will manage [one of] your largest assets. It’s not rude to ask questions.”

Terri Scheer is Australia’s leading landlord insurance specialist. For more information, visit www.terrischeer.com.au.

General information only.

This information does not take into account your objectives, financial situation or needs. Consider whether it is appropriate for you and seek independent advice before making any decisions.

Insurance is issued by AAI Limited ABN 48 005 297 807, trading as Terri Scheer. Before buying insurance, read the Product Disclosure Statement (PDS) and Target Market Determination (TMD) available at www.terrisheer.com.au.