Choosing a rental agent for your investment property is a bit like getting married: you need to do your research and get it right, because otherwise it will cost you dearly in the long run!
But how do you know if a property agent is a ‘keeper’ or a potential nightmare?
Like most industries, it takes some ‘inside knowledge’ to properly assess the claims and performance of rental agents. If you don’t know where to start, you might find this post useful – we’ve created an ‘Insider’s Guide’ on how to choose a rental agent for your Sydney property.
Verify that the rental agent has professional qualifications and membership.
If you want a rental agent to manage your property, you have to make sure that the rental agent you are hiring is properly licensed with NSW Department of Fair Trading. Property managers should have a license or certificate of registration and work under the supervision of a licensed agent. If any case you are having doubts whether your rental agent is licensed or not, you can have a license check here. They should also be a member of the Real Estate Institute of NSW
Make sure that the rental agent has a good reputation and reliable network of contacts.
Having peace of mind is hugely important for you as a property investor. Your rental agent should be able to eliminate stress, and should certainly not become an addition to any issues or worries associated with the property. Your agent should be capable, and armed with a good reputation and a reliable network of contacts. This is important especially if something goes wrong or if the property needs maintenance or repairs. He or she must have quick access to the right people for help, and be responsive to tenant’s requests.
Confirm that the rental agent is knowledgeable of the area of your property.
When it comes to managing your property, one must be knowledgeable of the existing laws in the area to fully carry out your tasks and responsibilities as a property investor. An excellent knowledge of your rental’s local market will also play an important role in negotiating with tenants or buyers who are interested in your property.
Check the company’s current listing on the website.
One of the easiest ways to determine whether a company is really focused on property management or not is to check their website listing and see how many rental homes they presently have for lease. If there are only a few under their management, it might be just a ‘part time’ service for them. You should seek a specialist where ever possible. A property management company that is actively pursuing new clients and maintaining significant lease inventories is a sign of good and dedicated property management skills.
Compare and check if the rental agent charges acceptable fees.
Although fees can vary from area to area, rental agents usually charge a small percentage of your monthly rent, which ranges from eight to fifteen per cent. You will be able to tell if something is not right if the agent charges too low or too high from what is standard.
Check and review the agreement.
The agreement between you and your rental agent is what will bind you legally during the term of the agreement. This will serve as a protection for you as a landlord and you must review carefully the important points of the agreement such as the fees. Watch out for any hidden fees or cancellation fees. A reputable company will have a clear and easy to understand agreement that won’t confuse or deceive clients.
Do not choose solely because of the fees.
While fees play an important role in your every transaction as a property investor, it is unwise to decide based on fees alone. It is ironic that people always want the highest rent yield from their rental property, but also want the cheapest management fees. Do not fall for discounted or cheap management fees. Either they are not worth your money or they may charge you more through additional and hidden services. It pays to remember the old saying “you get what you pay for”.
Do not choose based on the rental agent’s location.
A rental agent does not need to be just minutes away from your investment property in order to manage your rental well. As long as they have staff ‘on the ground’ in the same city, you should be OK. If you choose your rental agent based on location alone, chances are you will miss out on other specialist rental agents who may offer a better service than ‘the local real estate agent’. We are living in a world now where technology is creating exciting possibilities for agents and landlords.
Do not rely on years of experience alone.
Do not be deceived by the number years of experience a rental agent presents to you. There are more and more real estate agents today who are jumping into the property management business, but who don’t have any actual experience in managing a rental property. Or worse, they get into it as just a supplemental source of income to their ‘sales’ real estate business.
Do not choose a one man band management company.
While it is nice to have someone do everything for you, managing an investment property usually involves a lot of functions. It is impossible for your rental agent to do everything in an efficient and timely manner. If one person does the accounting, collection, and customer service division of the company, beware! There’s a greater chance that he or she will fail you when you need him or her to handle an issue at a specific time.
Do not bother to hire if you intend to manage the property yourself.
Lastly, what’s the point of hiring a rental agent if you intend to manage the property yourself? You should allow any rental agent you hire to do his job. Getting involved in negotiations with tenants will likely end in conflict and miscommunications between parties. Allow your rental agent to do her job efficiently and resist the temptation to meddle with the management of the property.