Have you got an unprofessional property manager handling your investment property? Here’s how to find out, and what you can do about it.
You glance down at your phone.
It’s been a week since you called your property manager — still no response. The rent hasn’t hit your account, and you suspect they’ve been skipping property inspections. Hardly a welcome development!
If you’ve had these kinds of problems with your property – you’re not alone. Not all agencies that manage investment properties are created equal, and it’s important to know whether you’re getting what you pay for with your agent, to keep your investment in the best hands.
What are a property manager’s responsibilities?
So, what exactly should your property manager be doing for you and your property?
This depends on what was agreed to in the written Exclusive Management Authority.
Some landlords negotiate a basic service for a moderate fee, others want ‘the full Monty’ — either way, pay close attention when entering the agreement. Click the following link for more information about typical property management fees in Western Australia.
For example, some agencies don’t complete important tasks like routine inspections, PCR’s, and final inspections in-house, but will outsource them to a third-party agent or company instead. It’s a good question to ask before you’ve signed on the dotted line, so, as the property owner, you know what you’re paying for, and your expectations get met!
Your agent can help with finding tenants
Property management agencies almost always help landlords find tenants for their property.
They should start the re-letting process as soon as the previous tenants give notice, consulting you about any work that needs doing and what rent can be achieved for your property.
You are entitled to expect effective marketing and thorough reference checking.
Your property shouldn’t take significantly longer to let than others on the market (unless you’re aiming for above-market rent).
Negotiating with incoming and outgoing tenants
Your property manager will handle beginning/end of lease processes for your property, including:
- initial and final property inspections, and mandatory Property Condition Reports (PCRs)
- negotiating lease terms that comply with the Residential Tenancies Act (RTA)
- collecting bond and advance rent for your property
- signing the lease with your tenants
- lodging and disbursing/claiming the bond for your property.
Managing the property and tenancy effectively
Landlords can expect property management companies to monitor their property’s condition and keep payments on track.
- conducting regular property inspections to pick up necessary maintenance or property damage
- arranging periodic property maintenance for key items
- arranging urgent and non-urgent property repairs as required by the RTA
- collecting rent payments from tenants
- day-to-day administration, paying bills, etc.
If these property matters are not happening in a timely way, you have a right to complain!
Effective financial management
Your property manager should handle financials as per your agreement. As the property owner, you don’t have time to worry about the minutiae – this is what people pay a property management companies for!
Incoming rent should go into your nominated account soon after it is paid — check that an agency’s payment cycle suits you before signing up.
Unlike other property management agencies, at We Love Rentals, we offer the flexibility to pay your rent in a way that suits you.
Payment of outgoing expenses should also be agreed upon in advance. The agency may have your authority to pay all bills, but will usually need your authorisation above a certain value.
They should only stray from this if you’re uncontactable in an emergency.
Outgoing costs for your property may include:
- utilities – electricity, water and gas
- maintenance/repair costs
- strata fees, levies and rates.
What makes a property manager ‘not up to scratch’?
If you’re new to being a landlord, it’s not easy to know what level of service you can reasonably expect from your property management agency.
Here are some common problems with property management companies you need to be aware of:
Agreed tasks being missed
If your property manager is not responding to emails, tenant requests or paying bills on time, it can be a nightmare. Tenants/tradespeople may start to contact you directly, instead of your agent.
Bad tenants not paying rent on time can also cause you major stress!
Poor communication between landlord and property manager
Your property manager should respond to phone calls, messages and emails promptly. If they don’t, it might be a sign they have too much on their plate or aren’t putting enough effort into managing your investment property.
Ineffective property maintenance/repairs
If a property is becoming run down, your property manager might not be inspecting or booking maintenance/repairs as often as agreed. This can devalue a property and expose you to the risk of tenant injury.
Appliances like gas heaters and smoke alarms in your property must be serviced regularly and repaired quickly.
Knowledge of tenancy law
In real estate, the RTA covers a range of legal issues and property law that landlords are bound by. It’s crucial that property managers are highly knowledgeable and compliant.
The RTA governs issues like:
- tenant privacy
- serving breach notices to tenants
- timing of urgent property repairs
- lodgement and disbursement of bonds
- rent increases and giving tenants notice
- and more!
Failure to comply can expose you to fines or legal action, even if it’s your property manager who broke the rules! Ultimately, the landlord is responsible.
Property managers stretched too thin
Some rental managers take on way more than they can handle — if your manager is managing upwards of 120+ properties, you might want to consider switching to another agent.
Being overloaded leads to property managers neglecting tenant enquiries, making mistakes and the landlord’s investment suffering.
NOTE: At We Love Rentals, we cap our property management team at just 80 properties each — this means our staff manage each investment to a high standard. Get in touch with us to find out more about our specialised property management service!
How do you deal with a bad property management company?
If you’re feeling let down by your property management company, or are tired of dealing with unethical property management companies, here’s what we recommend:
Tell them how you feel
First, communicate. If you feel your property is getting neglected, state your case. Let them know what your issues are, whether that’s rent taking months to reach your account or property inspections being a touch slapdash.
Assess their response
What do they plan to do to remedy the problem? If they’re cooperative, helpful and promise to do better work with you and your property, you might want to stick with your agent and give them another chance. If they brush you off, respond in an unprofessional way or offer platitudes, consider finding a new agent to manage your property. A rude property manager is unpleasant to deal with, but you have to keep your emotions in-check. The last thing you want is to be perceived as an unprofessional landlord.
Your next step
If you do decide to take your property elsewhere, do your research carefully. Ideally, you want a property management agency that just manages rental properties (like us!), with experienced agents and a team dedicated to helping you get the best result possible from your investment. (Find out if We Love Rentals is the right fit for your property investment goals!)
Can an owner sue a property management company?
If you feel your property manager didn’t do what was agreed in the contract, and you suffered a loss as a result, you may have the option of pursuing them in court. We recommend getting expert legal advice before doing this.
Where to report bad property managers?
You can lodge a complaint against an unprofessional property manager with the industry regulator (the Department of Mines, Industry Regulation and Consumer Protection) or ask for advice on your next steps.
However, it’s always better to choose a professional property manager who’ll give you no reason to complain. You want to deal with a rental management company that stays up to date with laws, rules and regulations.
Professional property managers guaranteed at We Love Rentals
At We Love Rentals, our property management team is experienced, specialist and dedicated to helping you achieve your rental goals. We answer phone calls and emails quickly and we’re thorough in every aspect of management. You and your property will never be ‘just a number’ to us!
We can help you take your rental property to the next level. Get in touch today for a free rental appraisal or give our friendly management team a call on (08) 6254 6300!