Three questions you should always ask your property manager
- September 5, 2017
There are two times when it’s easiest to reach your average property manager – when you haven’t yet signed the contract, and when you want to end the contract. In either case, here are the three questions you should ask your property manager to help you decide whether to start with them or leave them.
1. Does your firm only do property management, or do you do sales too?
The average property manager turns over after 9 months. And if you’re lucky enough to get one who even remembers you, they’ll invariably move into sales. That’s because even though the base salaries for sales and property managers are similar (around $65-70K), only sales pays juicy commissions that agents can take to the bank. The commission on the sale of a single $1M property is equivalent to about 8 years in property management fees. In fact, many agencies will pay property managers a bonus if they can convince you to sell your place.
That’s why, regardless of whether the market is up, down or sideways, your agent will tell you it’s a great time to sell.
Ask your agent whether their agency handles both sales and property management.
Whose interests do they really have in mind? Yours, or theirs?
2. Why do you charge me a percentage fee to manage my property?
Percentage fees aren’t fair to landlords. The amount of work to manage a $1000/wk place is certainly not twice that of a $500/wk place. And if the market becomes stronger and supports a higher weekly rent, your agent takes the gain for doing nothing.
WAsk your agent what is the cheapest property they manage, and what percentage fee that client pays. Then do the maths and compare what they’re paying to what you’re paying.
You are paying more. Are you getting more for your money?
3. Do you really have my back?
Everything might be peachy right now. But what happens when things go pear-shaped? Of course, good tenant selection is a critical first step to avoiding problems. But even the best tenants on paper might not be what you expect.
Ask your agent if they’ll protect your wallet from rent default, tenant damage, or public liability.
Do they expect you to get your own landlord insurance?
Whatever decision you ultimately make, make sure you know the answers to these questions first. If you don’t like the answers you hear, and you’re looking for something different, contact us.