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Oh TheFrugalSamurai I missed you so much, please don’t ever leave me.
There there, it’s OK – I’m back now!
But wait – where did you disappear to?
Adelaide people, Adelaide.
What’s Adelaide? Is that a cool and refreshing drink?
No no – it’s a city in South Australia renowned for… umm… renowned for…
(Cue dream-like music as scene travels back in time and fades to black. New scene, camera pans to car cruising down a busy road. It is night.)
“HEY THEFRUGALSAMURAI WHAT’S YOUR BLOG ABOUT” said the person in the front passenger seat as we drove from Adelaide airport to our City hotel last Friday.
“Well MrsFrugalSamurai-to-be’s friend, it’s about personal finance and development”
“I’VE READ IT – I DON’T GET IT, WHERE ARE THE PERSONAL FINANCE AND DEVELOPMENT?”
“You blind old duck, do you know how to READ, it’s here, here and here” I almost blurted, instead of “thank you for the feedback, I’ll take it on board Emili (not her real name), greatly appreciated”.
For the rest of the drive to the hotel however, I realised Emili had wisdom in her words – damnit she always does.
That’s why between all the food, wine and good times I was so glad that a couple of other ladies on our trip asked me my thoughts regarding property management.
Finally something on personal finance and development to talk about in correlation with our weekend getaway! I was stoked.
One of the ladies had a very poor experience with her previous property manager, “he was shit, how do you find someone who is not you know, shit”.
We all have a little shit in ourselves ma’am is what I was thinking of saying, but again I didn’t back myself – I’m just shy.
Coincidentally another friend of mine also asked me in a separate conversation regarding property management when we returned from our trip.
RISE good property managers – you guys are the most sought after people apart from amazing personal finance and development bloggers.
I’ve gone through a few in my time and can tell you that when you find a good one – stick to them like glue. Mind you, not physically, that would be difficult and socially awkward in modern society.
Below is what I did to find good property managers both local and inter-state:
Talk to people – wow such a profound and insightful comment.
No seriously guys, word-of-mouth marketing is the most powerful form of marketing there is.
If you receive positive service or value, you may tell people about it. But I guarantee if you receive negative service or feedback you will tell people about it.
It’s just who we are deep inside.
There are plenty of forums and websites out there just waiting for your perusal. Once in, read the reviews and then private message the posters – you’d be amazed how talkative people are online, especially if they had a bad experience.
Shortlist a few property managers – once I discerned which ones had positive feedback, I called them direct and basically interviewed them with the following questions:
- How long have you been a property manager?
- How many properties are you/your staff managing right now? (Too many and they may not “service” your property with enough attention. Too little and it may be a sign the business is not mature or floundering. A good rule of thumb is around 70-90 properties per manager).
- How many vacancies are on your books currently? (Is it because of their lack of initiative, or because of the specific area?)
- How long does it take to fill a vacancy? (Gives you a good guide as to what to expect for the suburb you invest in, shorter the vacancy time, better it is – vacancies will make or break your net rental yield).
- What is your eviction process? (GTFO of my property, oh wait, there’s a process to follow… what is it?)
- What is your late rent policy? (Ditto to above, late rent is a sign but not necessarily a red flag unless it is consistent).
- What are your fees? (Remember everything is negotiable. Fees include: management, advertising, leasing, lease renewal, routine inspection, admin, taxes e.g. GST and a whole bunch of others which gouge into your returns, be mindful of this necessary evil).
- How do you screen prospective tenants? (It’s normally a standardised process of references, references and more references cross-referenced with the tenant register which is also a reference).
- How do you collect rent?
- Which contractors do you work with? (This is a tough one as you won’t know the quality of their maintenance contractors until they actually go out and fix things).
- How long do I have to give notice if I want out of our agreement? (If things aren’t working out, I don’t want to be locked in for 90 days whilst a shitty property manager continues to collect fees off me, I’d want to move asap, try to negotiate for 30 days, less the better).
However the most important consideration in my view is communication – like any good relationship they need to communicate well, that’s why I am mindful of value but I am even more mindful of communication.
Communication begins at the start with all the little things – do they return phone calls, how soon, do they keep me updated with what’s going on, are they quick to reply to/action requests etc. You know the drill.
You could of course self-manage the property but personally I’d rather pay a professional to allow me to concentrate and focus on other things.
Also when the shit hits the fan, you’d want someone there who’s good at cleaning shit from fans.
A good property manager is an integral part of your property portfolio as they are your eyes and ears on the ground.
End of the day you are paying them for a service so why shouldn’t you deserve the best?
Unfortunately, you won’t really know whether they are good or not unless you partner with them so please make sure you constantly review whether what you are paying is worth it.
If it’s not worth it and you are continuing to pay them, pay me instead – I’ll sing and dance and make you jolly for the same price but for a much better outcome.
What do you think? Did you enjoy this post? Please help me out if you enjoyed this and click on the little “follow” button at the bottom right and be a follower. This way, you’ll never miss my words of awesomeness!
Excellent post. As a manager of a large rent roll I half expected this to be about saving on fees and (gulp) managing it yourself. A couple of points:
1. Don’t dismiss simply because a rent roll is large or the numbers aren’t 70-90 per manager. For example, I manage 1870ish properties. But I deploy 12 property managers in 4 teams of 3 to do it. Wait, that’s a lot per person you say. I also deploy 4 admin staff who take a lot of the burden out of their day to leverage them better.
2. Don’t always judge on fee. It’s almost always the first question I get asked. And I find a lot of clients don’t make the correlation between rent and fee %. Client who own property in inner city suburbs (where rents are double or more) don’t understand why they pay 3% but I charge 7%. Math people. Your property manager in Bathurst does the same amount of work your property manager in Ashfield does…well if they are both doing their jobs properly they do.
3. Also ask about their experience at Tribunal (the shit hitting the fan part). Smaller offices with younger staff will have less properties and therefore less attendances at Tribunal = less experience. If Heaven forbid you end up there (and it happens) you NEED someone who knows what they are doing.
4. Always take out landlord insurance. If your property manager doesn’t recommend it, get rid of them.
5. Your best point was asking questions. If you don’t ask me, I don’t get to tell you the above. And in my market I’ll be talking to you again in 6-12 months when you need help fixing a mess.
The Frugal Samurai
HUGE points raised here just huge
Mr Frugal Samurai, once you reach 1 million followers (heck, I’d consider doing this at the 100K followers mark), I think it’d be the time for you to open your own property development/management/real estate business. 3 pronged attack alas McGrath, Fleming and Gilliespie.
Love 3 pronged attacks…
Messi neymar shwarez
Jordan pippen kukoc
Horgay turbo uate
Goals, buckets, tries
The Frugal Samurai
w…what are you talking about Julian…?
The Frugal Samurai
HAHAHAHA almost choked on my cornflakes with full cream milk reading this
Why are you eating cornflakes at 9:50pm… are you running a midnight marathon?
The Frugal Samurai
only thing on hand sir