Selecting a PM

Hello there...

Just looking at the Property Management Fees charged in a certain area I'm investing in at present and they are crazy....9% (I just can't get my head around it)....does anyone know of where I could search for a better rate? Is there any way that one can contract a person privately to manage the property on some kind of agreement (say for instance a local who has a few IP's in the town)???? Just a thought! What do you guys do out there? This place is a couple of hours drive from me and I just don't know that I have the confidence to do it myself. I will be getting Landlords Insurance. Any help or tips on this matter would be appreciated...cheers SQ

Hi Suzieq
Interview the PM and ask what they will do for you for the 9%. Let them know what you expect from them. Interview them as they would a prospective tenant.
We have PMs for three of our IPs and they are all 3000+kms away. Wouldn't be without them, especially when things go a bit awry, then they are worth the percentage we pay them and more.

Hi

Using a PM depends on how much time you have to look after your tennants yourself.

I use a PM look after my 10 IPs even though I live within a five minute drive of all of them.

Let the PM have the hassle of dealing with leaking taps, finding tennants, lodging bonds, chasing rent etc. This frees up more time to do the things you enjoy. I only ever get a call from her now if something major happens (four months ago a hot water system went. After a chat with me she had a new one installed next day)

With regard to the property insurance, if your PM is a good one you shouldn't need it. Find out if th PM can offer you this type of insurance. Some insurance agencies will only let PMs with a good track record offer their insurance to landlords.If they have too many duds, the agency may refuse to let them offer it. In the six years that I've been using a PM I've only had one tennant skip without being up to date on the rent, and most of this was covered by the bond. The PM felt so bad about it that she didn't charge a placement fee for the next tennant, so I actually can out slightly ahead
If I'd paid insurance on all of the IPs I'd have been up for over $50k by now!! Think of how many deposits that covers on new IPs! Guess I've been lucky ...my next tennant could be a tennant from hell straight out if Steve's book.

I my opinion the (tax deductable) percentage you pay the PM is worth every penny. As you get more IPs you can use your position to bargain with the agent to get a better rate.

My PM is a single agency and doesn't have many properties listed for sale, but has a very large rental "stable". Every time I pop in for a chat, her "available for rent" list is very small. Most of the properties are tennanted with long term tennants.

Another good thing about using a PM is that they may let you know as soon as they get a listing and you may get first shot at it.

If you are in Brisbane on the inner east side let me know your email and I'll send you the details of what I consider to be a PM worth her weight in gold.

T

Hi Truska
you say that the insurance would have cost you >50k so 50000/6 years/10 properties = $833
The average I pay is 220/yr and it tax deductable.
Do you insure yourself or your car or ppor just because nothing has happened doesnt mean nothing will.

quote:
Hi Truska
you say that the insurance would have cost you >50k so 50000/6 years/10 properties = $833
The average I pay is 220/yr and it tax deductable.
Do you insure yourself or your car or ppor just because nothing has happened doesnt mean nothing will.

OOPS! Your Right

Somehow my calculator told me that $200 x 10 x 6 yrs was $50K. Sorry . I was guessing at the current price of insurance as I haven't priced it for 6 years and was going on my memory.

As to the insurance.. yes I have insurance on everything else, including the IPs.
I just don't insure again deliberate melicious damage by the tennant. I have complete faith in my PM and her checking of new tennants. I only insure things where I feel that there is a risk involved, and I feel that the risk here is minimal. I know it may happen (melicious damage) but I'm prepared to take what I preceive to be a very low risk.

I guess it boils down to your experiences,and how much faith you have in your agent and how lucky you feel.

T

Hi all,

I have created a number of question sheets for professionals. Some of the questions I ask are quite direct but hey its my money! I have posted the question sheet for a property manager - use what you want. The other sheets are on my site - (you need to be a member but its free).

marc@propertytalk.co.nz

Company Information

1.Please show proof of current membership to REINZ (if in Aus then Aus version)

2. What is the management fee percentage? (GST Inclusive)

3.What other charges and/or fees are applied to managing the property for rental?

4.Do you have a separate property management department which are dedicated to the management of property?

Property Manager Information

5. How contactable are you (mobile, weekends)? Do I get a direct number?

6. How was the rent calculated?

7. How many properties does the property manager (who will manage my property) manage?

8. How long has the property manager which will look after my property been with the company?

9.Who takes over when the assigned property manager is on holidays?

Insurance Information

10.What insurances do you set up for the landlord?

11.What are the prices and conditions?

Advertising Information

12.What are the options for advertising?

13.What are the prices?

14.Where and how do you advertise? (newspapers, Internet flyers etc…)?

15. What is the advertising period?

16. What happens after the advertising period has expired and there is still no tenant?

17.Do you charge for advertising after you have signed up a tenant or before?

18. What happens to the advertising money if you cannot sign up a tenant?

Inspection Information

19.Will you be present with all prospective tenants’ when viewing of the property?

20. What is the property inspection schedule for my property?

21. Will you provide a report after each inspection detailing the inspections findings?

22. Please show me a sample inspection report.

23. Do you make copies of keys?

24. Do you hand out keys?

25.Open for inspection sessions on the weekends- will the assigned property manager handle them or does someone else take over?

26.Will you perform ingoing inspections reports?

27.Will you perform outgoing inspection reports?

Tenant Information

28.What is your view of tenants?

29.Do you have a direct debit system for rental payments?

30.How do you screen tenants? Do you perform a credit check?

31.How do you handle disputes?

32.How often is rent paid? If tenants wanted to pay more often (ie, so it fell in sync with their pay), would this be possible?

33. What do you do when rent payment doesn’t arrive on the due date? What is your procedure? Do you wait until the two weeks period is up before starting proceedings or do you send out reminder letters to the tenant?

34. How would you know if tenant wasn’t looking after the property? Would you find out at the end of the lease?

35.What do you do with tenants who damage the property?

36. How clean will the tenant leave property? Are they expected to steam clean the carpet before they leave?

37. Do I get the one property manager looking after my property or is it whoever is available?

The purpose of this document is to gain a clear understanding of the processes and commitment of XXXX to perform the duties of property management.

Thanks for your replies guys, it all helps and I will certainly ask more questions of the respective PM's in the town (there is about 3). I will have to think more into Landlords Insurance as I agree if the PM is any good, the risk should be relatively low and it would be a risk I would be prepared to take if that was the case. cheers suzieq