Throughout his journey of creating a nine-property portfolio, Eric Wu has made sure to engage property professionals in order to make the best decisions and ultimately achieve his financial goals.
One of the most important parts of his financial team are property managers, who oversee the maintenance of his properties as well as the operations associated with his investments. Whether or not the property manager was referred to him by fellow investors, Eric makes it a point to have a meaningful conversation with them before he gets them onboard. Effective property management is crucial for Eric’s success in maintaining and growing his property portfolio.
Some of the questions he asks are:
- ‘How many [properties do] you manage?’
- ‘How many years [have you] been in the industry?’
- ‘How do you deal with a tenant runaway on an insurance claim?’
“Once you talk to them, you will know, roughly, whether you are on track or not,” the property investor said.
Commission
Many property investors often think twice when property managers take a high percentage of their rent. However, Eric believes that while the commission is important, it should not be very critical when choosing a professional to work with.
He said: “Very likely, they’re only [getting] 1 per cent or 1.5 per cent, [and] that’s only a few dollars away.”
“[It] doesn’t really matter much because not only can they manage your property well [and] keep everything in order, [they can also] keep the tenant happy [and paying] on time—all the issues [are] addressed on time.
“I’m happy to pay the person more. There’s no problem at all,” Eric added.
At the end of the day, he’s paying for a lot more than the quality services that the professional provides. Eric is also enjoying the benefits of having more time and less stress in his life.
“You’re paying your property manager to take the headaches away from you,” Smart Property Investment’s Phil Tarrant said.
Replacing property managers
Eric believes that dealing with property professionals should be a “reciprocal business”—as long as they enjoy the benefits of working with each other, then it remains a good relationship. However, if an issue has not been resolved for months or the tenants complain or leave, then maybe it’s time to reconsider the members of your financial team. Ensuring you have the right manager for any investment property is essential to maintaining tenant satisfaction and maximizing returns.
Moreover, property professionals must also remain proactive and consistently seek opportunities to help him succeed.
The property investor said: “I really like the proactive managers. They can look at opportunities.—whether they can increase rent or not. Managing your own rental property without a real estate agent can offer a sense of control and potentially save money, but it requires careful attention to detail and responsiveness to tenant needs.
“If the market’s not good, they should tell me, ‘Rent should be kept at where it is,’ or they can say, ‘This is what you can do to your property to increase the potential of increased rent,’ ” he added.
Property managers are also expected to be transparent around bills and maintain good inspection management and reporting.
“It’s like they are running their own business but they are running it for my own benefit—they also think like I think. [They put] their foot in my shoes for my interest, not theirs only,” Eric concluded.