11 Questions to ask a Property Manager before you hire them.

[Orkibi]

Hi Team,
I have put together a list of questions to ask a prospective property
manager, if you are considering hiring one.

If you, like me, own properties in various parts of New Zealand or the
world, then Property managers are essential for keeping the portfolio
professionally managed with maximum returns.

Ha, and lets not forget, if just like me you would rather chase the deal
then the tenants or maintenance.

I hope you will find this helpful:

11 Questions to ask a Property Manager before you hire them.

1. What is your fee structure?

2. Do you charge an inspection fee?

3. How many properties do you manage?

4. How often and how do you distribute the income for the client’s bank account?

5. How much do you charge for Rant appraisal and manage maintenance or repairs.

6. Tenant selection: do you carry credit checks on potential tenants? And obtain a bond from the tenants for security? How much?

7. For how long do you make leases for?

8. How easy do you make it for prospective tenants to view a property?

9. What is your procedure of dealing with arrears?

10. Do you charge the Tenant a letting fee when they sign up for the tenancy?

11. What are Additional costs: advertising, etc.

[Keys]

Question to ask an owner.

Is there anything about this property that I should know about? (think about it)

[Orkibi]

Is there anything about this property that I should know about? (think about it)

Absolutely - good question, anyone feel free to add question as you find them important.

[PC]

Oh the two murders and the P lab?
Irrelevant surely.

[Orkibi]

Oh the two murders and the P lab?

Comprehensive landlord Insurance will cover that.

[flyernzl]

5. How much do you charge for Rant appraisal

If I'm going to rant, I'd expect them to appraise that at no extra cost.

[PC]

Normally free.
However a mysterious $25 "inspection" fee usually appears on the next statement.

[Hec]

give them a 6 month trial on one property that has issues and see if they can deal with it fast and professionally.......

[CSH]

Re the fees and charges - I personally will only hire a property manager who just charges one flat % fee that covers everything - advertising, inspections, managing maintenance etc - it may be bit more expensive in the % department - but you know where you stand - making it easier to budget for, then the only addtional charges are maintenance costs. If a flat fee is not on offer, then you can always negotiate one.

[WalkerServices]

ask for references

[Glenn]

No no no. You people are looking at the wrong things.

So many people ask about commission charges as the fist question.
It just lets me see where they store their brains. Pretty close to the wallet in their hip pocket.
Really you guys have missed some of the really expensive cost related things.
There is no reason what so ever why you can not ask to see the rent arrears list.
You should ask for the number of properties they manage and divide that by the numer of properties they have to let at the moment. That ratio might show up a thing or two. Then look more closely at the properties for let and see how many are empty (aka for available now).
After you have the list of vacancies go and look at the local newspaper. See how many are advertised and also look at Trademe.
Then start homing in on some really nasty stuff.
Ask if the property manager will let the property account go into debit.
This happens when some expensive maintenance is done. Or do they expect the owner to front up with money in advance because they do not trust you. Some managers even ask for an owners bond.
Find out if credit checks are done on all applicants.
Find out how they carry out debt recovery.

Just a few things that flash through my mind.

[WalkerServices]

good advice glen!


~~~~~

http://www.tradeapprentice.co.nz

[Property Man]

11 Questions to ask a Property Manager before you hire them.

1. What is your fee structure?
2. Do you charge an inspection fee?
3. How many properties do you manage?
4. How often and how do you distribute the income for the client’s bank account?
5. How much do you charge for Rant appraisal and manage maintenance or repairs.
6. Tenant selection: do you carry credit checks on potential tenants? And obtain a bond from the tenants for security? How much?
7. For how long do you make leases for?
8. How easy do you make it for prospective tenants to view a property?
9. What is your procedure of dealing with arrears?
10. Do you charge the Tenant a letting fee when they sign up for the tenancy?
11. What are Additional costs: advertising, etc.

Thought I would post here and comment and answer the questions above for how we as property investors have set up our company as the service we offer is what we would look for in a property management company if we didn't own our own (own our own??).

1) Fee structure is a flat 8.5% + GST. If however you are a member of Property Investors Association, Defence Force, Massey University staff, Palmerston North Hospital staff (maybe even Property Talk??) it is 8% + GST. Further discounts apply for more properties owned. Only items fee structure doesn't include is TradeMe (although we do this for $50 + GST), extra newspaper advertising and extra inspections on property. We are looking at doing a massive advertising campaign around mid 2011-mid 2012 so watch this space.

2) No inspection fee charge. Only if extra required. You get one on signing up to Manawatu Property, when tenant moves in (done at same time if it works out), follow up 4 weeks later, 6 monthly and on tenant vacating. We take loads of photos as our main source of evidence.

3) We manage around the 100 mark. We have only been operating for less than two years and plan to grow and be the biggest independent property management Palmerston North company. Currently we have a financial officer, property manager, and 2 active directors. Because we invest in property we know the market, what our clients want, and our tenants. Everybody that works for the firm also invests in property.

4) We distribute income monthly. Reason for this is because often expenses come due and at times there is not enough income in the owners account to pay for the rectification work. If a client is dead set on being paid mid-monthly, we will consider this, but 90% of our clients are happy to receive their income monthly. They only need to check once a month, and they receive their statement at the same time. If they did receive a mid-monthly payments then there would be no statement in the middle and they may wonder why they have received the amount they have rather than receiving the same amount as last time.

5) Rent appraisal on current properties managed by us is $0. Maintenance and repairs $0. If you were to get us to totally project manage a rebuild or a do up or something of the like then an arrangement would be made between Manawatu Property and the client.

6) Yes we carry out credit checks on all tenants via TINZ. We also take 4 weeks bond. We may take 3 weeks if the property is slow in renting and we have the permission of the landlord.

7) We vary the way we operate our leases depending on the clients needs. If they want fixed we fix. If they want floating, we float. We stay away from fixed leases lapsing around December-January. We fix for 6-12 months generally.

We meet prospective tenants at a property that meets their needs and ours. We aim to do showings in the evening and around lunchtime. We are flexible and very accommodating in this regard.

9) We use the latest property management software and know immediately when a tenant has missed payment. We send them a text on day one and expect to see the cash on day two. If it is still not there we follow up with a phone call. A 10 day notice for arrears can not be issued until they are in arrears but we do get the ball rolling immediately with a letter stating they have missed their payment due on x date. We also begin proceedings with the Tenancy Tribunal

10) We DO NOT currently charge a letting fee. This is to give the landlord more confidence in our company that we are finding them a tenant as soon as possible, without the delay due to the tenant not being able to also afford the letting fee.

11) Only additional costs were stated in section one. TradeMe, newspaper, and extra inspections. We advertise your property for free on our properties for rent page.

Well that was the questionnaire. Do we pass? Up to you, however we have had excellent feedback from our clients to date. To answer some of Glenns questions. We will provide any non sensitive information such as vacancy details, properties available details, rent arrears details if requested. The only issue with some of the questions listed by Glenn are the following

1) What if the properties that are in arrears are in arrears because we took them over that way? We can try and recover the arrears but it depends how long the client or previous property manager let it carry on for.

2) When the market is hot, properties can be rented overnight. When it is cold it can take 2-3 weeks. This is why seeing which properties are actually vacant and finding out why as Glenn suggests is good.

Look forward to some feedback and debate on this topic.

Regards
Aaron

[Glenn]

So do you allow the owners accounts go into arrears.
Do you go ahead (with permission) and get new carpets or major painting done and permit the owner to pay it off via their rents over two or three months.
What would you do in a situation like Christchurch with damaged properties. Do you act as a clerk of works like we do.

[Property Man]

So do you allow the owners accounts go into arrears.
Do you go ahead (with permission) and get new carpets or major painting done and permit the owner to pay it off via their rents over two or three months.
What would you do in a situation like Christchurch with damaged properties. Do you act as a clerk of works like we do.

Hi Glenn,

With regards to owners accounts, we make sure they have enough funds to pay for the maintenance. That is why we prefer end of month owner payments.

If we get carpets done or painting, we get the owners to pay the invoices, or get the owners to pay us, or hold their rent back and pay with that. We don't let them pay it off over 2-3 months because we are not a credit facility. Owners don't expect that either.

Yes we act as the agent for repairs and maintenance, but if it was a massive project then we may come to an arrangement with the owner for us to project manage their development. This wouldn't include things like carpet replacement, painting, or general maintenance like this.

Regards
Aaron