How to find a good property manager
In the first instance it may not be as easy as you think. There appears to be a shortage of suitably qualified property managers with the experience and skills required to navigate an often challenging work environment.
There are more than 600,000 rental properties in New Zealand of which approximately half are professionally managed – and just like any industry there are going to be those who are shining stars and those who will do things to bring the industry into disrepute.
Industry knowledge and experience are important, however having life experience is somewhat crucial. A potential property manager should have expert communication skills – they spend most of their time checking emails, taking phone calls, gathering data and preparing reports. Being highly organised and having great time management skills is a must. They must have the ability to think quickly and solve problems especially in a rapidly changing environment. It is a good idea to discuss potential scenarios to ascertain how they will handle certain situations. Most importantly having an empathetic property manager will enable them to manage tricky situations when things go wrong.
Cheapest isn’t necessarily best
You’re talking about trusting someone to manage your investment property which is likely to be worth a significant amount of money. Like many things in life – wine and cars are two that immediately come to mind – cheapest isn’t always best. You’ll get what you pay for in terms of service and you want someone who is going to go that extra mile for you and focus on every little detail in relation to your property. You don’t want a property manager who is overloaded just to be able to balance the books as this can lead to high levels of stress and overloading.
Currently the industry isn’t regulated
The property management role is changing rapidly and has moved to encompass more legislative obligations than ever before. Currently the industry isn’t regulated by the government and anyone can set up a property management business – which is a frightening prospect as it means that:
they don’t have any industry/best practice training or ongoing education opportunities – REINZ provides this on a regular basis for all its members
they are unlikely to have a Police background check despite the fact that they hold the keys to tenants’ homes (your investment property!) – whilst currently only our real estate members have Police checks, this is something we imagine many people would think is a given
there is no requirement for any money they take on your behalf to be held in a trust account which means your money, and your tenants’ money, isn’t protected the way it should be – all REINZ property management members must have a trust account that is administered by an independent party
there is no legal requirement for property managers to have public indemnity insurance to protect them if things go wrong – all REINZ property management members must have public indemnity insurance should the worst happen
there is no Government regulated Code of Conduct for the property management industry to adhere to meaning that renters, who include some of our more vulnerable members of society, are often taken advantage of – however, all REINZ property management members must adhere to the REINZ Code of Practice for Residential Property Management which above all ensures that members act with professionalism, honesty and integrity to eliminate practices which may bring their agency and the sector into disrepute.
As the famous Warren Buffet quote goes: “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently.”
Reputation for those in the property management industry is everything. Things to find out from your new property manager should include:
How long they have been in the industry and how long their company has been running for
Have they won any industry awards
Do local media outlets come to them for commentary as trusted advisers/experts in the market
Are they using top of the line property management software so that they’re immediately notified when your tenant misses a rent payment or know exactly when their six-monthly property inspection is due
Ask for their referrals – from both landlords and tenants. Make sure you get referrals in writing and contact phone numbers for verbal references and ensure you follow up by ringing some of their referrals.
At the end of the day, property management is a people business so it’s imperative that your property manager is a people person who you can get on with, who your tenants can get on with and who can provide excellent customer service.