What's your experience with property managers?

[Michael Robertson]

Hey everybody,

I'm new, and trying to figure out my plan for the foreseeable future. As I am very interested in buy and hold investing, I'd also like to automate this investing as much as is reasonable. Thus the property manager. As a newbie I'm left wondering about how these guys really fit into the overall dream of living off cash flow and quitting your job. 

I know they are important, and I know there are plenty of resources to find and evaluate property managers, but what is YOUR experience like?

What do they actually do for you?

How much time do they save you?

Are they worth the cost?

Are they actually that hard to find?

How much managing the manager do you do? 

How is your interaction with the manager if you are investing out of your market?

Any thoughts, experiences, stories or advice in dealing with property management is greatly appreciated.

[Helen Rolls]

Hi @Michael Robertson.  I'm in AU so my experience may be a little different.  I think my Property Manager is well worth the $100 or so I pay her each month.  

In the nearly 3 years I've been renting my home in Melbourne she has organised for a string of repairs, maintenance and replacement of a dishwasher (I got a 40% discount off retail).  Her database of tradespeople is fantastic and she has gotten better prices than I used to for the same service.  My house was built in 1940 in case your wondering about all the repairs.

I have had tenants break the contract twice, both for legitimate reasons (new job, bought their own house) and there was no break in occupancy.  Although the laws in Victoria are pretty good and tenants breaking a contract have to pay rent until a new tenant was found.  She handled everything with a minimum of fuss and ensured that everything was in good condition for the new tenant.

Being a complete novice and not knowing anyone in the area who was renting a property out I wasn't able to get a referral for a property manager.  So instead I looked at local rental ads on realestate.com.au.  I started by looking for good, professional looking photos of properties and good descriptions.  This provided me a short list, I then went and had a look at one property for each and experienced the inspection from a prospective renters view.  This narrowed my search a little, I violently disliked one of the guys on the list.  I then had 3 left that all seemed good and so I asked for them to come and take a look at the property.  In the end I liked two of them, but felt a stronger connection to one and went with them.   This may be harder to do if you don't live close to your investment.  I moved 800kms away after this.

Since then her business has grown dramatically, and except for a couple of months when she seemed to disappear she's been great.  That period was followed by her employing someone to help her in the office.

The piece of mind and convenience, not to mention her knowledge and people skills are well worth the cost.  Her fees are tax deductible here as well.

I've already written an essay, but I will share one experience with you, if you're still with me.  After my first tenants gave notice, I was inundated with 8 applications that all had passed Melissa's initial screening.  I was quite keen on one application, however, she then sent through an email from the applicant's property manager that said in summary, direct quote, "do not take x unless you want a permanent migraine".  There's no way I would have known that the applicant was a complete PIA without her connections.