Unfortunately, the current lack of regulation in the New Zealand property management industry means too many bad property managers exist amongst the good ones.
In light of this, here is some insight from us on how to choose a good property manager for your investment property:
1. Experience matters!
How long have they been in the industry? What type of properties do they manage? It’s important to choose an experienced property manager who deals with similar properties to yours. Experienced property managers will know what to look out for and will be quick to make sure problems are remedied quickly and efficiently - without causing undue stress to you (the landlord) or your tenants.
2. Portfolio Size
Experienced property managers will also know their limits in terms of how many properties they can manage efficiently (without burning themselves out). Try and find out how many properties they manage and if they have any staff to help them manage their workload. Some property managers may not like to tell you how many properties they manage (this may indicate they are managing too many properties). If they are managing too many properties, they may not have the time to care for your property as they should.
3. Check them out by doing your own research
You should be able to get a good feel for the quality of a property manager by doing a little bit of research. In this day in age, most property managers have some form of online presence and you can spend some time browsing the internet to gain some insight into the quality of their service.
Here are a few things we suggest you look for:
- What properties do they have listed for rent on the likes of Trade Me or their own website? Do they have empty properties? If so, have they been empty for long? A good property manager probably won’t have properties advertised for long. Additionally, if they don’t have many properties advertised compared to their competitors, they may have already rented them!
- What is on their website? Is the information available of reasonably good quality?
- Are they local? Local property managers have inside knowledge of market rental rates and trusted networks of tradies in the area. They will also be able to attract tenants quickly as they know what tenants in the area are looking for and will advertise your property in a way that highlights its most popular attributes.
- Search them by name at the Tenancy Tribunal. What are the results of the tenancy tribunal cases? Are they winning or losing? A lot of tribunal cases could mean they set up problematic tenancies.
4. Do they have any online reviews or referrals?
Good property managers will have lots of good reviews and referrals - there may be some evicted tenants with a bone to pick but if the overall vibe of their reviews is positive, that speaks volumes. You can usually find testimonials on a property manager’s website, Facebook or via a Google search of them or their company. Property investor Facebook groups are also a gold mine for referrals. If you’re a member of one of these groups, do a simple search for the property manager by name and see what pops up!
5. Ask about their processes, flexibility & responsiveness
A good property manager should have clear processes they follow when it comes to dealing with things like tenant applications, rent arrears, and property maintenance. Ask them what their process is when tenants don’t pay rent on time. If they tell you, they have “zero tolerance for rent arrears” take that with a grain of salt. No property manager ever wants rent arrears, but the reality is, sometimes tenants fail to pay their rent (for all sorts of reasons).
You should also find out how flexible their working hours are and test their responsiveness to phone calls/emails. A property manager’s work isn’t limited to regular office hours. Tenants will have emergency repair requests at all hours (a pipe bursting in the middle of the night needs to be dealt with promptly to avoid causing irreparable damage to your property). Good property managers are on call 24/7 and will respond to queries in a timely manner.
6. Do they back themselves?
Find out if your shortlisted property managers offer any form of guarantee to back themselves in the services they provide. Here at Propertyscouts, we back ourselves with a Rental Guarantee. We’re so confident in our ability to place great tenants that if for any reason, they miss a rent payment we will continue to pay the rent for up to 4 weeks - so you aren’t left out of pocket while we deal with the issue in the background.
7. What level of involvement do you want?
Do you want to be completely hands-off or would you prefer to maintain some level of involvement (such as the final approval of tenants)? Have a think about this and discuss it with your potential property manager, they’ll be able to provide you with options and examples of situations where landlords have had varying levels of involvement and the outcomes. If you opt for a completely hands-off approach, a good property manager will know when they NEED to involve the landlord and will be able to deal with every other scenario whilst keeping the landlord's best interests front of mind.
8. Are they part of any recognised organisation?
Check to see if your prospective property manager is part of a recognised organisation. Propertyscouts property managers are members of the RPMA (Residential Property Managers Association). The RPMA has a Code of Ethics, a complaints process, and is dedicated to the continuing professional development of residential property managers. They also conduct background checks of their members so you can rest assured you aren’t dealing with anyone dodgy!
9. Remember, cheapest isn’t necessarily the best!
When you hire a property manager to look after your investment property, you are putting them in a powerful position and trusting them with what is quite possibly your retirement fund. Are you willing to risk receiving a lower level of service in exchange for a few extra dollars? 90% of the time you get what you pay for when you opt for the cheapest product or service. If a property manager is charging a mere 6.5% + GST it probably means they are managing more properties in order to make a profit. As mentioned earlier, managing too many properties can result in them stretching themselves too thin to provide adequate care for your property, compromising the quality of their service. If in doubt, ask prospective property managers what their fees cover, they should be able to justify them and clearly explain the work that goes into managing each property.
At the end of the day, hiring a property manager is a bit like hiring a lawyer or accountant. Trust your gut. If you’ve taken the time to do your own due diligence you should feel confident in making the right decision for your property.
At Propertyscouts, our property managers are fully trained and work to very defined (proven) processes. We have systems set up to minimise problems and ensure after hours issues are dealt with effectively and efficiently. If you’re in the market for a property manager, get in touch! We have a nationwide network of property management experts who would be more than happy to assist you.
DISCLAIMER: The above advice is written by Propertyscouts New Zealand (2020) Limited and is intended as a broad guide for educational purposes only. The advice should not be regarded as legal, financial or real estate advice. In all instances, you should make your own inquiries and seek independent professional advice tailored to your specific circumstances before making any legal, financial or real estate decisions.