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How to interview for your next property manager?

Monday, March 21, 2016

Aside from those who operate as part of a licensed real estate agency, property managers in New Zealand are largely unregulated.  While this promotes a culture of consumer choice, the lack of uniformity in service delivery standards can cause landlords more headache than what a management package is worth.  A good property manager is a valuable asset to your portfolio, a bad one is the first step into the nightmare scenario no landlord wants to fathom. 

Related: Vesna Wells - Investing in a property manager

A lack of an independent body providing sanctions and oversight over the property management industry means that it is up to individual landlords to hold their property managers accountable.  In this market, no landlord can afford to be a passive customer.  So how do you make sure you have the absolute best candidate looking after your properties and how do you maintain a good working relationship with them? 

Related: NZ Herald - Property managers a risk, say critics

Role clarity 

A lot of times when you first sit down with a property manager, you will find yourself being asked many questions.  Where is your property?  What is the rent level?  What are your preferred types of tenants and tenancies?  And so on.  This is a fact gathering exercise to help the property manager gauge your service requirements.  But the barrage of questions can often cause role confusion which can result in you walking away from the interview feeling disempowered.  

So before you start shortlisting potential managers, make sure you are aware of your role to the landlord-manager dynamic.  Once engaged, the property manager becomes an agent to your principal.  In essence, he is an extension of you throughout the tenancy.  Which means you stay in control.  To maintain that control you must approach the first conversation as the interviewer rather than the interviewee.  

Ask open ended questions such as how they are planning on managing your property, what will they be checking on a regular basis, how are the accounts maintained, what is their manager:tenancy ratio, what has been their proven service record to date?  Are any of their answers documented in their standard service contract?  What is the in-house complaint process should there be customer dissatisfaction?  You need to be clear about what you expect from your property manager.  Be specific, if you want full inspection report with accompanying photographs and copies of 14-day notices on a monthly basis then make sure that is communicated and agreed from the outset.  

Do your research 

You know to background check your tenants before granting the tenancy so why wouldn't you background check your property manager?  Do not be too shy to ask for testimonials of current and past landlord clients and follow them up.  Find out a list of current rentals your property manager is looking after and do a casual drive-by to see if these houses are well maintained.  Ask them what their arrears and collections rates are and review their rent arrears protocol document to your satisfaction.  Take a look at their listings on TradeMe to get a sense of how quickly they are able to let out a property.  Remember, you are the customer and you are in control. 

Related: 30 questions to ask before you hire your next property manager

An agreement that works for you

You are not a cookie-cutter landlord so why would you sign a cookie-cutter service agreement?  

A top-notch property management firm understands that all tenancies are unique and will be willing to negotiate on terms for a mutually beneficial long term working relationship.  Which means there are ample scope to depart from their standard service agreement to include customisations that suit you.  Do you want more regular property inspections?  Do you want to be paid on out a certain date of the month?  Do you want a different limit on the yearly maintenance budget?  Are you satisfied with the termination policy?  Negotiate these preferences into your contract before you sign on the dotted line.  

Getting the most out of your property manager

Now that your property manager is on board, you guys are on the same team.  A successful team comprises of team members who are interdependent on each other and work in a collaborative manner.  

What does that look like in a landlord-property manager relationship?  Firstly, make sure there is a clear chain of command.  If something goes wrong with the tenancy, the property manager should be the first port of call for response and solution with you maintaining a broad oversight by way of regular reports.  If a situation is to arise that is outside of the scope of the agency then the property manager should consult with you in the first instance for the appropriate response.  Do not disrupt the chain of command by contacting your tenant or tradespeople direct without consulting your property manager.  

Secondly, and perhaps most importantly, communication is key.  Make sure you give your property manager constructive feedback as to the service you have been receiving.  If you want more detailed photographs taken at inspections, say so after you have received your first report.  If you want to review all 14-day notice and remedied outcomes then ask for them the moment you become aware of any breaches.  By giving regular feedback you are giving your property manager to step up to the plate to be the best manager for you. 

Finally, know your boundaries.  There is often a certain time in the month (usually month end) when property managers are extremely busy tending to monthly reports and reconciliations.  If your enquiry is not of an urgent nature then refrain from making phone calls and instead write an email.  Have a bit of patience and give your property manager the space she needs to be a good manager to all of her clients.  

Do you have a successful working relationship with your property manager?  What are some of the tips that we have missed out here?  Share them below!

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