What to look for in a rental manager
Property Advice Melbourne
What to look for in a rental manager
Dealing successfully with rentals does require agents to have the knowledge, expertise, and systems in place to ensure that the property is managed properly.
When Things Go Wrong (And They DO!)
Whilst there have been horror stories of ‘trashed’ properties and months of unpaid rent, it is fortunately comparatively rare. Often these situations occur when the landlord tries to deal directly with the tenant without following the due process. In this scenario, when things go wrong, the landlord is left to deal with the aftermath and has no back-up.
Agents should be chosen carefully after some background research to avoid settling for someone that is somewhat remiss about the whole process. If an agent is involved and their actions are found to be negligent or at fault then at least there are some avenues for compensation.
On the flip side there have been some landlords who take advantage of a desperate tenant (e.g. students, migrants, and — sometimes — illegal immigrants.) These types of landlords need the full weight of the law to come down on them. On a more positive note, the majority of landlords are normal people who have one or more rental properties and require them to be run properly in order to pay the due mortgage.
What to Look For in an Agent
A well-established company with a good sales team and well established rental division
Ensure the commission paid is well spent. This is generally 7% plus GST for their management fee to collect rent and one to two weeks’ rent for leasing. From time to time a landlord will upgrade or add to his/her portfolio. In this instance the landlord will often look to the agent to sell the unwanted property. If keeping the property, they can try to negotiate a lower management fee (when having multiple properties managed by the same agent.) This ensures an ongoing and mutually beneficial relationship with the agent.
Agents managing properties often ask for references, usually from previous landlords or agents. Often these references are written as an inducement to leave rather than being a genuine reference, which can negatively impact on the applicant who, in actual fact, is a good tenant. A good agent will check the references via a follow up phone call to the agent or landlord, and also check that the applicant does have a regular job, time of tenure etc. In this instance a good agent will also call upon further references such as those from a central credit agency that will show up any bad debts or adverse credit history relating to the applicant. Background on the tenant should include: gaps in rental history, employment, salary, references etc. An ideal tenant is renting through a real estate agent and has rented through a real estate agent previously.
The main reason for this is because a solid rental history can be obtained from the previous agent, whilst a tenant ledger can also be requested, which often re-affirms what the managing agent has told the new agent. If the tenant is renting privately, ownership searches are completed on the property to ensure the specified owner is indeed the owner; if a person owns their own home a good manager will ask for a rates notice as proof of ownership and generally speak to their sales agent for details.
Dates this person has been in the property are checked to ensure there are no gaps; if there are gaps the case is more often than not that this person is not specifying the details for a reason and this casts doubt over the honesty of the person. Once their residential details are confirmed, the focus is then on their income. If they are self-employed, an ABN check is done, and contact made with their accountant to request end of financial year summaries.
If a person is working for a company, a good agent will do a web search on the company and do ABN searches to ensure they are a legitimate company. Mobile numbers should not be called for references — only landline and business numbers should be confirmed. Furthermore, only head members of staff should be spoken to (i.e. managers or directors) to ensure the applicant’s friend is not being spoken to.
If a person is not employed and is receiving Centrelink benefits, a Centrelink statement and a bank statement would be asked for to ensure the income coming in is sustainable and sufficient to accommodate for rent and everyday living expenses. Once these thorough checks are completed, all applications will go to you, the landlord, to make the ultimate decision, accompanied with recommendations. A bad rental agent will probably be too lazy to provide recommendations (including feedback on quality of references, etc., which would allow the landlord to make an informed decision.)
In Summary, rental managers are and should be expected to represent the landlord’s best interests, many rental managers forget who pays their wage and they start to become too close to the tenant. Seek testimonials from existing clients; ascertain how many clients in the agents rent roll to determine if it is too many or too few. Finally, be prepared to fire your agent at the first sign of laziness or inability to perform their duty. It is a duty.
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