The next level is the cut-price property manager.
They’re the ones with big signage all over their building offering a slashed-rate percentage of management fees.
Generally speaking in the industry, anything below 7% is considered cut price.
It’s ironic that some investors want the highest rental price from the tenant AND the cheapest management fees from the property manager.
Of course, the percentage you pay your property manager will affect your bottom line, but like everything else, you will get what you pay for. You want a company to want your business because your business is going to be profitable for them.
Profit is what keeps businesses in business. It’s what motivates them to do a great job for you to keep you happy and coming back. Profit is also what stimulates our economy and causes small businesses, like most property management firms, to grow and flourish.
Cut-price property managers simply cannot afford to do a brilliant job for you.
They can’t afford to do these things well:
· Advertising (in a ‘mouth-watering’ way) your property to potential tenants
· Sourcing suitable and reliable tenants for the property
· Obtaining references and conducting credit checks on potential tenants
· Providing you with information on the latest safety regulations
· Preparing the tenancy agreement
· Organising and managing the collection of the tenant’s deposit
· Preparing the inventory and conducting a state of repair assessment on the property (junior property managers at cut-price agencies don’t have the experience to spot present and/or future concerns)
· Managing and arranging any necessary repairs
· Inspecting the property 3-4 times per year (and at entry and exit), and feeding back any comments to you
· Re-letting the property as quickly as possible and minimising any ‘down-time’
· Dealing with legal aspects of the tenancy/property, including evictions, non-payment, etc
They particularly have difficulty performing their job well for the time-sapping jobs at the front-end (marketing and securing a tenant), and the back-end (exit and entry reporting, regular routine inspections).
In a nutshell, if your agency is struggling to make a profit for themselves, how can they make it a profitable experience for you?
PS: If you’re with a cut-price property manager and would like to switch for a better experience, please call Coleen on 0477 369 584