Contracting someone to manage your residential property is like using an accountant or lawyer to manage your business affairs. It’s important to take time to choose the right person or business.
Having a good property manager can help to attract and keep good tenants. Most landlords expect their property manager to:
- receive rent on their behalf
- find suitable tenants
- handle maintenance
- deal with disputes
- sort any issues at the end of a tenancy.
The property manager becomes the landlord’s agent who looks after their investment.
What to ask a property manager
When you’re talking to a potential property manager, you may wish to ask them some of these questions to find out more about them.
- What are your qualifications?
- Are you a specialised property manager or a real estate agent who also does property management?
- How long have you been a property manager in the area?
- Do you invest in the area?
- How many staff do you have? What are their roles? Do you have staff that are just responsible for finding good tenants?
- Are you a member of a professional body with a code of ethics?
- How do you manage properties over holiday periods?
- How many properties does your business manage? How many are currently vacant?
- How long does it normally take to fill a vacancy in the area?
- What kind of insurance coverage do you have? Is there any fidelity fund coverage?
- What computer system and software do you use?
- Can I see an example of a monthly reporting package?
- Have you appeared in Tenancy Tribunal cases? If so, what happened?
- How do you keep up to date with changes in renting law?
Things to consider
When you’re choosing a property manager, consider these points:
- How close is the property manager’s business to your property?
- How organised and tidy are their offices?
- Do they present themselves professionally?
- What does their website look like? Is the content consistent with what they say when you meet them?
Setting up the property management agreement
Take time to carefully check and agree on the property manager’s responsibilities. You need to agree on all terms and conditions, and clarify any questions or concerns straight away. This will help to avoid problems later. You should always record your understanding in writing.
When setting up the property management agreement, consider the following:
- What fees do they charge? Do they fall within the average fee of 7.5–8.5% of rent received? What other costs will you need to pay in advance?
- How often will they be in touch?
- How often will they report to you? What’s included in the report? Do they offer online services?
- Will they provide market rent information? Will they let you know that a rent review is needed as part of their monthly reporting services? Will they have sole discretion to carry out a rent review or will they need your approval?
- How will they find and choose tenants?
- How will the property be marketed to tenants? Who pays for marketing costs?
- What does their tenant selection process include?
- How do they deal with tenant issues? How do they handle any questions or emergencies outside office hours?
- What do they do when a rent payment is late?
- How will they maintain the property?
- How often will they inspect the property?
- Which kinds of maintenance tasks are handled by the manager in-house? Which tasks require outside contractors? Can they show you a list of preferred service providers for maintenance work?
- What is their process for getting quotes for maintenance and repair work?
- How do they give contractors access to the property during the tenancy?
- What happens when a tenancy ends?
- At the end of the tenancy, how do they manage bond refunds and property inspections?
The Residential Tenancies Act does not cover the relationship between owners and property managers. You should seek independent legal advice on all contractual arrangements, including disputes.