Landlords FAQ
Even the most experienced investors can have many questions about property management.
Some of the most important questions an investor can ask a property manager are:
How many staff are in the property management department and how many properties are under management?
At Investors Direct we have a dedicated property management department – I.D.P.M. – specifically created just to service our client and it’s a different concept to the usual real estate agency model. Our focus is on providing superior service to our already established client base – not the general public.
Is a department head/owner of the agency involved in the day-to-day management of the property management department?
Our department head is very “hands-on” – just as she was when she owned her own business. Jan worked with the property management team to ensure her landlord clients were being cared for as they should be. As a result she grew her rent roll to over 1,000 properties because of the service that she and her team continued to provide. Jan has the same goal here at Investors Direct.
How many years has the property manager looking after your property been working in real estate?
While I.D.P.M. has only been part of Investors Direct for almost 6 years, the team has two senior people who have been in the industry for 40 and 23 years respectively. Other members of the team have varying periods of time in property management but we are lucky in that some of our current team have been with us since shortly after I.D.P.M. commenced. Stability is very important to all landlords and it’s what we want as well.
The Head of Property Management at I.D.P.M. is a past National Property Manager of the Year, selected by the National Real Estate Institute of Australia as well as many other industry related awards and recognition. Jan still has a passion for the property management industry, a quality that’s very important for a property manager to have.
Does the property manager give you a written proposal?
Every Investors Direct investor client is given a written management proposal, so that our services, plus our fees and charges, are in writing and fully transparent.
What geographic area does the property management service cover?
While you could look for a property manager with expert local knowledge, consider what your property portfolio may look like in a couple of years’ time. Will you own a number of properties spread throughout the suburbs? You could either employ a specialist property manager in each geographic location or you could instruct a large property management company that covers a larger geographic area and has complete client focus, for the whole property portfolio.
Australia is now following the overseas trend in the formation of agencies that are solely dedicated to property management and cover a larger geographic area. With the advent of internet advertising and electronic banking, these “super offices” no longer need to be located in the local shopping strip to manage your properties. Many professional property investors are turning to this type of asset manager who can then be responsible for their entire property folio, which gives them the complete picture of their investment strategy.
Our clients have property all over the metropolitan area, but specifically in the locations where I.D. build property. We aren’t promoting our services to the general public but operate a property management department dedicated to our established clients. Technology allows us to manage property almost anywhere in the metro area – it’s a much more professional approach to property management as its more client focused. We have a real understanding of what customer service really means. Investors Direct aims to provide the full range of services that the professional investor/landlord may need.
Does the Property Manager hand out keys or do they attend property inspections with prospective tenants?
If the Property Manager you are considering just hands out the keys and lets the tenant inspect your investor by themselves, move on to another agency. Too many things can go wrong when keys are handed out to unknown people and the security of your property may well be compromised.
At I.D.P.M., we never, ever give out keys for any rental property! We inspect your property in person with the prospective tenant so that we have a better opportunity to promote your property as well as a chance to get to know the tenant a little better. Sadly handing out keys still happens with some agencies and we cannot understand why a business owner allows this, because: (a) the security of future tenants could be compromised (b) the security of the property is at risk (c) you can’t ‘sell’ a property to a tenant from behind a desk!
How many properties does the manager look after?
A property manager who looks after too many properties may not have time to devote proper attention to your property. Some busy agencies have 250+ properties per property manager. In general this is far too many to be able to give your property individual attention.
At some boutique agencies each property manager looks after approximately 150-200 properties. While these agencies may charge a little more for their property management services, landlords find this extra expense translates to a trouble free investment that often produces a higher return.
Our aim is to have portfolios of 150 properties per head of staff. This may mean a property manager will be responsible for 150-200 properties but will have an administration assistant to allow them to concentrate totally on managing the property without having to do all the paperwork.
Do you have staff available to show my property to prospective tenants 6 days a week?
The hectic pace of life and the advertising of rental properties on the Internet 24 hours a day means a good property manager must be available to show prospective tenants your property when it best suits the tenant.
We aim to have Open House appointments once during the week and then on Saturdays, but we will still be available during the week should tenants require another inspection time. Our aim is to rent the property in the shortest possible time to the best possible tenant.
Do you have a system for checking prospective tenants with regards to credit worthiness, past rental history and their current employment?
Ensure that your property manager subscribes to a major tenancy database and screens all prospective tenants carefully. We have membership of TICA (Tenancy Information Centre of Australia) which is the largest database in Australia and is also located in New Zealand and the U.K.
We wouldn’t consider an application without processing through TICA first. We have a comprehensive application form, that requires a 100pt checklist, verification of employment or income; 2 previous rental references; 3 personal references; next of kin; driver’s license or photo I.D.; car registration; and a personal conversation with every potential tenant. As well, we see how a prospective tenant behaves at the inspection and a lot can be learnt through conversation at this time.
Do you have a system that daily checks rental arrears and takes the appropriate action immediately?
A good property manager who uses electronic funds transfer methods for rent collections and up to date computer systems should be able to monitor rental arrears daily and minimise late rental payments by regular communication with tenants by phone, email and SMS.
We use Console, one of Australia’s leading computerised Trust Account systems specifically designed for real estate agents. Arrears are checked daily without exception and notices served as allowed by legislation. We have an arrears process of SMS, letters, phone calls to ensure we receive payment. Collection of rent is a priority and we have a Zero tolerance policy towards rental arrears.
The more reference checking done with any application will assist in keeping arrears at a minimum so any Property Manager who has an arrears problem may not have properly checked the application form or the prospective tenant!
Will you go to court for me if need be and what is your success rate for previous appearances?
Unfortunately you just might have to go to the tenancy tribunal to protect your rights as a landlord. If this happens you will need an experienced property manager to represent you as tenancy laws have become quite complex. We would certainly appear at the Tribunal/VCAT if necessary.
In our past agencies we would only have attended the Tribunal two or three times a year as our focus was on finding the best tenant, thoroughly checking their references and making sure they understood our zero tolerance attitude to arrears. The Tribunal is not a nice place to be in so we made sure we didn’t have that experience any more than absolutely necessary. Mediation was and still is used as a measure to obtain a positive outcome. We have a similar attendance rate at I.D.P.M. and our success rate has been 98% in our landlords favour.