Engaging a property manager to care for your investment is a big decision. You’re entrusting them with finding the right tenants, protecting your investment and quickly replacing tenants who move out so you don’t lose income.
Done well, a property manager can take away a lot of the stress of owning an investment property. So, how do you know if the person or agency you’re engaging will do a good job?
Here are seven questions you can ask your property manager to make sure they’re the right fit for you.
1- How many properties do you manage?
Make sure your property manager has a portfolio that’s manageable. You want them to look after your property like it’s their own, but if their workload is too high, things can slip through the cracks.
Ideally, a property manager should have about 150-180 properties in their portfolio. Some agencies will load their property managers up with 200, or even 250 -300 properties. For many people this high workload is unsustainable.
If a property manager is spread too thin, your property may not get the attention it deserves. Small issues, if not dealt with promptly, can become major problems later. It’s important that property managers have enough capacity to deal with issues as they arise.
How Glasshouse works: Our principle of care guides our business practices:
Care is our Founding principle
Our property managers deal with all aspects of managing your property, from marketing, placing tenants and arranging viewings, to inspections and taking care of maintenance.
We keep our property manager’s portfolios to a level that’s sustainable for them, but generally this is fewer than 160. This ensures your property manager has the capacity to give your property the attention it deserves.
2- What are your fees?
Not all property managers charge their fees the same way, so it can be tricky to figure out which agency is giving you the best value.
Try to compare services like-for-like, being mindful of marketing speak, which can be used to hide additional costs.
Typically, property managers charge a management fee of between 7% – 12%. Keep in mind that a lower management fee doesn’t always mean lower cost overall – they may charge higher fees for things like maintenance, advertising, and placement fees. Some even charge for inspections.
A larger agency may have higher management fees because they have higher overheads, but they may also have a lot of knowledge, skills and experience that’s hugely valuable to the careful management of your property. Try to find a balance between fees and value; the best property manager might not be the cheapest one.
How Glasshouse works: We want to provide our customers with an excellent experience. Our fees are driven by our principles of care, ensuring your property is well looked after by us and your tenants.
What we charge:
- Management fees of between 8.5% and 12%, depending on the property.
- Maintenance fee of 8%. Some agencies include the maintenance fee in their management fee. We believe charging it as a separate fee ensures better service, keeping both you and your tenants happy.
- Placement fee (finding new tenants) of $515+GST. This includes a full marketing campaign with multiple platform listings, at no additional cost, as well as all credit checks.
What we don’t charge for:
- Advertising. This is included in the placement fee.
- Admin fees.
- Annual tax summaries.
3- How do you deal with rent arrears?
Sometimes tenants fall behind on their rent. It’s important to know that your property manager has robust systems for handling these situations promptly and correctly.
First, ask the property manager what percentage of their properties are in arrears. If they don’t know, it could mean their record keeping isn’t up to scratch. Anything less than 2% of their portfolio is acceptable, but the lower the better.
Then find out what processes they have for dealing with rent arrears. They should be able to tell you exactly what steps they take to find a resolution to the problem.
How Glasshouse works: We take any rent arrears seriously. While we empathise with our tenants who find themselves in tough financial situations, we are also responsible for caring for your property and our processes for dealing with this are clear.
As soon as a tenant is late with their rent, we establish contact with them to try to minimise any further arrears. They receive written notice that rent must be paid as soon as possible. within seven days. If it still is not paid after seven days, the matter is referred to the Tenancy Tribunal for breach of tenancy (rent arrears)..
We work hard to form constructive relationships with our tenants in an effort to find positive resolutions to any issues. We balance that out with our duty to care for your investment and ensure any problems are minimised as much as possible.
4- Do you outsource any aspects of managing my property?
Find out what tasks your property manager takes care of themselves, and which are outsourced.
It’s common for a property manager to outsource things like maintenance, because they may need a trades expert to take care of specific problems, like electrical issues.
Some agencies outsource their property inspections, which can lead to delays in problems being dealt with. Ideally, the same person will do the inspection every time because they get to know the property and exactly what to look for when doing the inspection.
Another task some agencies outsource is arranging viewings during the tenant sourcing process.
How Glasshouse works: We only outsource maintenance. All other aspects are managed in-house. Property viewings and inspections are vital opportunities for us to build strong relationships with tenants in an effort to provide an enjoyable customer experience.
5- How do you decide what my rent will be set at?
Setting rent at the right level can be difficult; you want to minimise the time your property is vacant, while maximising your long term financial return. You can do some of your own research to get an idea of what you could get for your property.
First, see what similar properties are being rented for in your area. The government’s Tenancy Services website has a helpful tool which gives you an estimate of market rent in your neighbourhood. Then, check out TradeMe and other property websites and browse the listings for properties similar to yours.
Don’t be fooled by agencies that claim to be able to get you a high rent amount. They may say this to get you to sign a contract with them, but if the rent is too high, it could sit vacant for a long time and you will find it impossible to get out of the agreement.
How Glasshouse works: Setting rent is a collaborative effort between us and our landlords. Our goal is to maximise your return on investment while ensuring rents are appropriate to the market conditions.
Once we’ve got a broad idea of market rent, we can then give you advice based on our expertise in the industry. For example, using the data from our many years in the business, we can tell you how many viewings generally convert into tenancies; how listing at different times of year can impact prices or the number of viewings; and whether the rent is too low or high for the current economic conditions.
6- How often will my rent be paid?
Different property management agencies have different policies for when they pay rent to landlords. Whether it’s weekly, fortnightly or monthly, you’ll want to make sure it aligns with your mortgage schedule if you have one.
How Glasshouse works: We pay rent to landlords weekly.
7- How would you advertise my property?
Good advertising is vital to securing good tenants. If your property is well presented on the most popular websites, it will attract more prospective tenants.
Ask your property manager which websites they advertise on, and whether they get professional photos done for their properties. These choices can have a huge impact on finding a good tenant for your property. For example, some agencies choose not to list on TradeMe, which is by far the most popular website for people looking for a property to rent. While TradeMe does charge fees for listings, the increase in potential tenants viewing the property far outweighs that cost.
The importance of good photography can also be overlooked as part of advertising your property. Presentation makes a massive difference, and good photography is a relatively minor cost that makes a big difference to how many people view your property. Ask your property manager what their approach to photography is, and look at examples of their ads. You want your property to be presented in the best possible light.
How Glasshouse works: We place a massive emphasis on good quality advertising. We take real estate-quality photos to advertise your property, and we place all of our properties on TradeMe as a Featured listing. These cost more than a standard listing, but attract a higher number of views. We don’t charge extra for this because we believe it’s so important to get your property in front of the best potential tenants.
There’s a lot more to property management than just listing and finding a tenant. You’ve got to have the right people looking out for you if you want to mitigate risk and get the best results. It’s important to know what you’re getting, and experience is key. Want to know more? Get in touch with one of our team to learn about the Glasshouse difference.