The relationship between a landlord/tenant and their property manager is super important. This relationship is based on trust, consistency, communication and mutual respect.
When choosing an agency to manage your investment property how important is it for you to ensure that your property is in the right hands? What sorts of questions do you ask your agent? What drives your decision and does it generally come down to the commission structure or the brand and if so, why?
In my humble opinion (maybe I am biased) I would rather pay the higher commission and have peace of mind that my investment is being looked after. After all, it is an investment and could very well be one of your biggest assets.
Now let’s assume an average investment property costs $550,000 with a rental return of $550 per week and you have done the “shop around” for prices with the difference of approx. $9 per week between the agents.
Rental Price per week Management Fee Commission per week
$550 7% $38.50
$550 8% $44.00
$550 9% $49.50
Overall they all offer similar services, promise to do regular inspections, have an arrears management process and so on. Who would you choose and why? My advice would be to A. choose an agency who have the systems and processes in place and B. don’t be driven entirely by commission. You want your “asset” managed by not only the most reputable agency but also an agency who have a team of equally reputable and knowledgeable property managers.
The relationship between a landlord/tenant and their property manager is super important. This relationship is based on trust, consistency, communication and mutual respect.
It is also imperative to choose an agency where they are able to establish and value the skill set of each of their property manager’s to ensure that your asset is placed in the right hands. By having processes and procedures in place to ensure that each property is effectively managed, whether it be repairs required or tenancy issues updated, prevents mistakes and often saves landlords money if managed effectively. Know your agency’s structure and question the history of your property manager and the rest of their team. You have the right to do this!
An inexperienced and ill-informed property manager who may not have the skill set to manage your asset will be your biggest headache. If they don’t understand why you have that investment and what your intentions are with it, they will become almost robotic and miss things which could potentially cost you thousands of dollars- all because of choosing an agent who offered 1-2% less commission. It was most definitely attractive then and now- not so much!
Just like the old saying goes, you pay peanuts…. you get monkeys!