The quality of your property manager’s skills significantly influences the success of your property portfolio. Partnering with a skilled and proactive property manager can add significant upside to each property, and strategies like yield optimisation (where weekly rents are gradually increased) and the prevention of unnecessary vacancies can add thousands of dollars each year to cashflow and capital growth. Compounded over a few decades, these strategies add up to some serious benefits for your portfolio.
On the flipside, an under-skilled, under-motivated property manager can cause conflict amongst stakeholders, give you a bad reputation, and lead to significant financial losses.
The stakes are high, and investors must carefully select their property manager to ensure their portfolio grows as intended. This article explores the skills and qualities of an exceptional property manager… and some strategies for finding and vetting them.
What are the skills of an exceptional property manager?
Let’s assume that your property manager has the ‘basic’ skills under control:
- They possess basic professional skills
- They act as the representative for your property
- They find and secure tenants
- They look after weekly and monthly tenancy obligations
- They ensure the property is maintained, and items are fixed/replaced when needed
- They deal with issues and emergencies
Here are some attributes that separate an outstanding property manager from the rest…
They’re committed to your REAL goal
An outstanding property manager understands the REAL reason you’re embarking on a property investment journey: to grow your wealth. As such, they weave this ultimate goal into their day-to-day operations with you. For example, they’ll attempt to boost your yield, and decrease vacancy rates as much as they possibly can.
They have strong 360-degree communication skills
Your property manager’s ability to communicate with you, your tenant, and other stakeholders is critical. Failed communication between rental agreement stakeholders (eg. Not returning calls, slow response times) can lead to frustration, conflict, financial losses from vacancies, or worse.
Having strong communication skills ensures property managers prevent any frustrations or conflicts from escalating larger than they should be.
They have knowledge of their local territory
Local knowledge is invaluable to a property manager. As such, your property manager should have a deep understanding of the macro and micro property environments surrounding your properties. This includes:
- Understanding local market forces
- Keeping a close eye on market rates for possible rent/yield increases
- Keeping an ear to the ground for any relevant information that may assist you
- Having an understanding of body corporate by-laws etc.
They have a strict application vetting process
Your property manager should have strict vetting processes that bypass their performance KPIs (in other words, the quality of a tenant should be prioritised over ‘just getting a tenant in the door’).
This includes strict reference and rental history checking.
How to create a shortlist of potential property managers
Listed below are places to search for potential property managers:
- Internet/Google/Bing search
- Facebook/social media search
- Property manager aggregator websites
- Asking industry bodies in your local area
- Asking other investors for referrals (this is often the best way—consider joining a property investor networking group to tap into their experiences)
Questions to ask (and criteria to assess) when vetting property managers
About the property management agency
- Is your service different to your competitors? If so, what are the unique benefits of partnering with you?
- Do you have any testimonials or reviews I can read?
- Can I speak to a few of your current clients, as references?
- Is your company director involved in the day-to-day running of the agency?
- How big is your agency? How many properties does your agency manage in total?
About the property manager you’ll be working with
- How many properties do you personally manage?
- What do you do if a tenant falls behind in the rent?
- Do you have an emergency response plan?
- How long does it take you to respond to tenants when they contact you with a non-urgent issue?
- What questions do you ask when assessing potential tenants?
- Have you been to court before (to represent a tenancy), and if so, what happened?
Things to look out for when reviewing potential property managers:
- The speed and proactivity of their communication. If they’re slow to get back to you, they’re probably going to be slow to get back to your tenants.
- Their attention to detail. Missing minor details in early conversations with you could mean they miss minor details when working with your tenants.
- Their language choices around your actual end goal: which is growing your portfolio’s value.
Securing an outstanding property manager is an art and a science. Trust both your ‘technical’ analysis of each property manager and your ‘gut’ feeling too. Ask yourself… Numbers aside, do you ‘like’ them? Do they seem like a ‘fit’ for you?
An outstanding property manager will grow your portfolio and contribute to your wealth creation. Investing the time upfront to curate and carefully vet a shortlist of property managers will pay dividends in the long run.
Please note, the numbers and assumptions listed in this article are for educational purposes only. Individuals should seek specific advice pertaining to their unique situation and the real estate market before making any decisions.
Trilogy Funding Two is a corporate credit representative (Representative Number 506131) of BLSSA Pty Ltd, ACN 117 651 760 (Australian Credit Licence 391237)