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In This Video:

00:19 Question No. 1. Do they own Property themselves?
02:30 Question No. 2. How many properties do they have under management?
03:02 Question No. 3. How many staff in their rental management department to manage all the properties?

G’day there, Daimien from Integrity Property Education. If you’re into property investment, property investing, looking for property investing strategies, or property investment advice, you’ve come to the right place.

Today’s blog post is 3 questions to ask your rental manager to make sure they’re going to be a good one.

Question No 1. Do they own property themselves?

Now some people may find this a bit odd. Just think about it this way, unfortunately in Australia, most real estate agents are owned by old dodgy men, and that may sound a bit weird, but they tend to employ young attractive females in the rental management department. I don’t know why this is the case, but 50% of the time it’s true. Not that may seem inappropriate, but it’s true.

So, the questions you have to ask yourself is, do you want a young 18, 19 or 20 year old girl managing your investment property, or do you want someone who is 30 something and owns property themselves. Let’s go through some scenarios.

So, your rental manager is going to do an inspection on your property, and you got a couple of rough, tough bikies living there or something like that and they stand there and stand over. Now what sort of response is that young person going to do? Also, if the rental manager is a renter themselves, who are they going to be more sympathetic towards? You, the landlord? Or the tenants? Now, in Australia, we have an egalitarian society, even the tem landlord is very offensive to some people because nobody is my lord. The whole psychology changes, this is why it’s really important to make sure your rental manager actually owns property themselves because once you own a property yourself, you cross over the thresh hold in terms of your attitude towards landlords and your attitude towards owning property.

They will treat that property the same way they would want their property treated by a rental manager and you will get a much, much better rental manager as a general rule. Now of course what I’m saying is a generalisation and of course what I’m saying there are exceptions to these rules, but most of the time these rules are very accurate and if you are desperately trying to find a rental manager and you are trying to sort the wheat from the chuff as soon as possible that rule is going to help you out dramatically.

Question No 2. How many properties do they have under management? Ask them that.

Now most rental managers will tell you that in full and probably try and inflate the number a little bit to try and impress you. Who are you going to be more impressed by? Someone who says they only manage 5 properties or someone who says they manage 100. Now most people think that the person who says they can manage 100 is going to be better because they have more people to put faith into them, but that may not necessarily be the case.

So first question you want to ask is how many properties they have under management and then the 3rd questions is.

Question No 3. How many staff have they got in their rental management department to manage all those properties?

Before they’ve wondered why you’ve asked. You’ve worked out what their ratio is, with the answer to their second question and the answer to their third, what is their ratio of staff to property managers.

Now this is really, really critical, because if you think about what you want your rental manager to do for you, now in most states, inspections have to be done every 3 months and there is only 220 working days in the year, so if there are 220 working days in the year and the rental manager is got to manage 4 inspections on your property, well how many days work do you need the rental manager to be doing for you throughout the year.

Now rental inspection is about a 3 hour task. When you think about it, your sitting at the office, you have to print off the previous report, and a fresh blank report, then they have to get in their car, they have to go to the property and you want them to spend at least an hour there doing that inspection properly. Going through, looking at all the stuff, every room in detail and making sure that there are no damages and all those things that need to be fixed have been noted. Then they have to get back in their car, go back to the office and type up the report.

They have to do that 4 days a year. So that’s two days of work straight away. Then, we’ve also got the books, pay us our rent and organise tradesman and if our property is vacant they have to do open homes and the days are gone where some of you may remember that you can just hand over a $50 deposit and get a set of keys for a vacant property and you can go in and inspect if yourself. Can’t do that anymore. The rental manager has to go with them. Some enterprising themes inspected a whole heap of properties and made copies of the keys, and then went and robbed the new tenants later, so they changed the legislation Rental manager must do the open home now. So you probably need about 3 days’ work out of a rental manager per year and if they are managing any more than 100 properties, then that’s a real problem for you because they must be neglecting something. So, very important ratio 1 to 100 is about ideal. Any more than 150, run the other way.

Now I’ve been stung by this before, I had a rental manager who sold their rent role to another management agency, and then I had all sorts of disasters. I then found out that rental management agency was running 1 to 250 ratio. Now 1 to 250 ratio is ridiculous and not manageable! So, ask those questions.

Do you own property yourself?
How many properties do you have under management?
How many staff do you have to manage them?

If you get the right answers then give them a go, If you don’t, then go somewhere else.

That’s it from me today. Remember we run one day courses all the way around the country. They are absolutely free and no obligation to do anything afterwards. Go to http://www.propertyinvestmentmentor.com.au, and click on the training tab, and you’ll see when we’re next going to be in a city or regional centre near you. Get yourself an education. All of these things we cover on the day, and happy property investing. Until next time, that’s it from me.

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