When it comes to buying an investment property and building a property portfolio, the most frequently asked question by most investors is, “How are we going to manage the asset?” There are two answers to this question. You can either manage the property yourself, or you can hire a property manager to manage the asset on your behalf.
Managing the Property Yourself
If you’re time poor, don’t have good organization skills and you’re not a people person who is good at negotiating, then avoid managing your investment property yourself. Why? Well you’ll need to advertise your property, interview tenants, check their credentials and determine their suitability, and then when you find a suitable tenant you’ll have to meet with them to sign rent agreements and manage bond and rent payments. Plus, when things go wrong, such as overdue rent payments and property damage, you’ll need to liaise with the tenant to rectify the problems. This is not for everyone and can lead to difficulties. Thankfully there is another alternative.
Finding a Property Manager
Hiring a property manager makes owning an investment property a simpler process as the manager becomes the ‘go to’ person for the tenant, which means you can go about your own business. The ideal property manager acts as a middle-man between you and your tenant so when things go wrong the manager, not you, deals directly with the tenant and helps you to resolve any issues.
But, not all property managers are created equally. Some are fabulous at their job, while others leave a lot to be desired. So how do you find the right property manager for you?
Most real estate agencies have a rental property list, also known as a roll. Real estate agents that work for the agency manage these properties on behalf of the property owners. To find the right property manager for you, ring local real estate offices and make an appointment to meet with the property manager. At the meeting ask the a series of question. These are as follows:
- What is your background?
- How many properties do you manage?
- What are the agency’s vacancy rates?
- How do you advertise for tenants?
- How do you screen tenants?
- If a tenant doesn’t pay their rent how do you deal with this?
- Do you do regular property inspections?
- How much are your fees and charges?
- What do these fees and charges include?
- Why should I use your service?
A good property manager will be willing to answer all of your questions. They should be able to communicate with you easily and make you feel comfortable. Ideally you want an experienced property manager who is well presented, but not over dressed. They should charge you a percentage of the weekly rent collected on your property, this is usually between 2 and 5 percent and includes a list of services. Some agencies will include garden maintenance and property advertising in this fee. Low vacancy rates are excellent. If the agency has high vacancy rates this may suggest that they manage property and tenant relationships poorly.
Are you looking to buy an investment property? YES, then contact eChoice and find the right investment loan for YOU today.
Written by eChoice