Hiring a property manager makes running a rental property so much easier. But what happens when you choose the wrong property manager? The results could be catastrophic.
Advertising the property, screening prospective tenants, filling vacancies, completing regular routine inspections, collecting rents, and responding to maintenance requests are a few of the important responsibilities of a property manager.
Choosing the right property manager is crucial in making sure that your property investment is well taken care of and is a success. So what happens when you choose the wrong property manager?
The following are some of the risks of choosing the wrong property manager:
#1 Rent Stays the Same
If you don’t see any movement with the rent for a considerable time, it could only mean either one of two things. The most common reason is that the market is not in good standing. When you rent your property “at market price”, your rent would have become dormant because of rising unemployment and vacancy rates. There are also instances where there is more supply than demand.
It is important that your property manager provides you with comparable properties that have recently rented and statistics and data on vacancy rates in the suburb your property is available. If the vacancy rate is lower than 3%, it is highly unlikely that there are no rent increases for a period longer than about 18 months.
Anticipating possible issues, ensuring rental return and dealing with legal issues requires a lot of hands-on experience. If your property manager is lacking in experience or maturity, they may not be able to fulfill their functions to the fullest.
#3 Does Not Care About Your Long Term Profitability
The thing with large full-service real estate agencies is that many of these companies are just concerned about signing up as many properties as they can without putting much thought into the long term profitability of the investment. On the other hand, there are specialist property management companies that really take the time to understand the individual goals of a landlord. These are the kind of agencies that take care of their clients by ensuring they do business everyday to secure long term profitability.
#4 Becoming More of a Burden Than Benefit
Property managers with less experience, as well as those who operate by themselves, are unable to provide full property management services. As a result, they would require property investors to be more involved with managing the property, assuming roles and functions that a property manager is supposed to take on.
#5 Does not have a Property Investor Mindset
It is important that a property manager understands that they work for you as a landlord. It is essential they understand the legislation and work within these parameters to guide and advise the landlord. Your property manager should be helping you build a more productive future. You need someone who knows how to look at details and is able to foresee the big picture.
#6 Lack of Repairs, Maintenance and Inspections
A lazy and unskillful property manager will not carry out regular routine inspections of the property. You will be surprised with how much the repair bills could cost come the time that you require maintenance to be done because of the extent of the property damage which could have been managed earlier if only identified beforehand.
#7 Inadequate or Absence of Support
A lot of property management agencies lack support and therefore property managers burn out. This leads to high turnover within an office and essentially you do not know who is managing your property. It is essential that an agency provides the support, systems and training that the property managers need to help them do their jobs efficiently.
#8 Lack of response
It is a gripe of many landlords and tenants that they contact their property manager only to not receive a response either via email or a returned phone call. A good property manager will always respond within 1 business day even if it is to say that they have received your email and are actioning your request or investigating a matter further.