Everything you need to know about changing property managers
The core duties of a property manager are to market a property, screen suitable tenants, handle rental income and maintenance expenditure, as well as a wide range of other functions.
When landlords and property investors appoint a property management company to manage their property, they expect that property manager to preserve their property’s capital value while maximising return on investment.
There are a range of reasons why a landlord or property investor might start considering whether the property manager they appointed might not be achieving this. Often, it may not even be a single reason but a combination of reasons over time.
While a switch can seem like a challenging process, the reality is that changing property managers is incredibly easy.
In fact, when you choose HERE Property to take over the proactive management of your investment property, we take care of the entire changeover process for you.
From liaising with the outgoing property manager to engaging with your tenant to ensure a seamless transition, we’re here for you.
Why do landlords and property investors change property managers?
Here are the top 10 reasons why landlords and property investors change property managers.
1) Trust has eroded
Trust is one of, if not, the most important factor underpinning the relationship between a landlord or property investor and a property manager. If that trust is compromised or eroded over time due to a range of adverse incidents or outcomes, with some possible scenario examples listed below, then it makes sense why a landlord or property investor might start considering changing property managers.
2) No correlation between management fees and value for service
The best property management company for your property delivers service excellence at a price point that represents and correlates with the value being provided. If there is a perception that the value delivered no longer lives up to the fees being charged, it makes sense for a landlord or property investor to reconsider property managers.
This perception though can sometimes be erroneous if the value of a service isn’t completely understood. This means that changing property managers on price alone can potentially mean losing out on the value of the service offering if the new property manager delivers a more limited service offering at a lower price point.
3) Lack of service offerings
If a property management company has a limited service offering, this can adversely affect outcomes and result in landlords and property investors look to change property managers. They will be looking for a property manager who can deliver more comprehensive services, as well as provide access to a wider range of solutions that can positively affect investment strategies. These additional solutions could include property finance and insurance solutions.
4) Lack of local market expertise
If a property management company doesn’t understand or have specific expertise in a local market, they may not know all the intricacies surrounding this environment, the regulations or potential tenant needs. It makes sense that a landlord or property investor would want to change property managers to ensure they are teaming up with a property management company with local market expertise.
5) High staff turnover
It can be challenging to foster a trusted relationship with a property management company if there is a high turnover of staff. This may result in unfamiliarity with the property and the local market. Worse, high turnover might indicate deeper problems within the company. It makes sense a landlord or property investor will want assurance of stability and will look to reduce high turnover in the management of their property.
6) Poor communication and not easy to work with
A property management company should be communicative, accessible, and easy to work with. When it’s a challenge to know whom to contact at an agency, or if the agency is unresponsive to queries or concerns, the poor or lack of communication can create a negative experience.
Landlords and property investors may look to property management agencies that can provide a portfolio style of management that adds value and streamlines communication. By having a single point of contact and access to a dedicated property manager, it can be much easier to know whom to turn to when you need.
7) Irregular or inadequate inspections
Routine inspections are an important way to make sure a property is being taken care of. If inspections are not happening regularly, or at all, then there may be a problem with the property manager’s service.
Inspections also need to be thorough, with photographs and a written report. If these are inadequate, this may also be problematic.
8) Rental payments are consistently late
Tenants need to pay their rent on time. If a property manager has a consistent history of not ensuring timely rental payments from tenants, then there may be an issue with how lease policies are enforced.
9) Untimely property maintenance
Keeping your property in good condition is critical to maintaining a healthy and safe environment for tenants. When maintenance issues are not resolved in a timely manner by a property manager, unnecessary risk is introduced. This can include failing to keep up with rental agreement inclusions, shortening a tenancy due to tenant dissatisfaction or increased maintenance expenses due to critical issues not being resolved quickly. A property manager that does not address property maintenance in a timely manner may need reconsidering.
10) Not taking a proactive approach
Property management service offerings that simply respond to handle tenancy issues in a passive way as they arrive may be missing out on significant opportunities of adding value. It makes sense that a landlord or property investor would look for proactive property management to ensure good customer service and that the investment maintains profitability and value.
What misconceptions keep landlords and property investors from switching property managers?
Despite the reasons why a landlord or property investor might consider changing property managers, there are primary reasons that can keep them from planning to change.
The following reasons that inhibit a decision to change are largely based on misconceptions.
1) Property managers are all the same (but they’re not)
There is a misconception that if all property managers are essentially the same, then there’s no real point in switching property managers. If they have the same undifferentiated offering with the same outcomes and the same challenges, then it doesn’t really matter.
The reality is different, and the level of services, expertise and outcomes vary widely. That’s why it’s so important to know how to differentiate property managers. To help with this, refer to our Ultimate Checklist for Selecting the Best Property Manager for your Property.
2) Switching will be a hassle (but it’s not)
When life is already as busy as it is, the last thing landlords or property investors want is the hassle of additional administration. When there is a misconception that switching property managers will require extra admin hassle, it almost seems easier to put up with or accept the issues experienced with a current property manager.
The reality is that changing property managers has virtually no administrative impact to you or your time. That’s because we make it simple and take care of the entire end-to-end process for you.
3) Changing property managers will be expensive (but it’s not)
There is a common misconception that changing property managers is expensive and not worth the cost.
The reality is that while there may be a termination or exit fee in the management agreement with the outgoing property manager, the value of a proactive property manager will outweigh any exit fees.
If you’re unsure of what the termination fees are in your existing agreement, talk to us. We’ll help you identify any applicable fees.
4) Switching isn’t possible mid-lease (but it is)
A common misconception is that the only time a property manager can be changed is at lease renewal. The reality is that the lease agreement is between you and your tenant.
The management agreement is between you and your property manager. The management agreement can be reviewed at any time and will have termination clauses in it, commonly 30-60 days. This means you can change property management companies at any time.
In fact, switching mid-lease can even be beneficial as it allows adequate time for your new property manager to assess your property and re-appraise in the lead up to a lease renewal.
5) Switching will disrupt tenants and rental income (but it won’t)
A common misconception is that tenants will be inconvenienced by a property manager change.
The reality is that tenants aren’t disrupted or inconvenienced in any way. They do not need to sign a new lease agreement and will only need to update bank account details where they pay rent. Clear communication throughout the changeover ensures that tenants are engaged throughout a seamless transition.
Also, keep in mind that if you as a landlord or property investor were having issues with a property manager, it’s possible the tenant was having issues as well. This means changing property managers can be an experience that resonates with the tenant, contributing to potentially longer-term tenancies.
How to change your property manager
When you choose HERE Property to take a proactive approach to your property management, we take care of the entire process of changing property managers.
We understand the importance of managing the switch professionally and with care. You do not need to do anything.
We complete the entire property manager change for you
When you sign a new management agreement with us, we take care of all the details.
Our end-to-end process includes:
- Liaising with the outgoing property manager
- Complete a smooth transition with the tenants
- Resolve any outstanding maintenance or dispute issues
We handle all communications
To make the changeover process as easy and efficient for you as possible, we take care of all the communication.
This means that we will:
- Call and email the outgoing property manager to inform them of your decision.
- Ensure any relevant termination periods or early termination fees are understood by all parties.
- Agree on next steps to transfer relevant documents to us.
- Decide on whether to pay out any outstanding management fees which would transfer management of your property immediately.
- Take great care with introductory communications with any existing tenant and ensure a smooth transition.
We collect all important documents for you
It’s critical to always have important documents on file. That’s why we ensure all important documents are transferred to us.
These documents can include:
- Rental application documents
- Signed Residential Tenancy Agreement
- Signed bond lodgement form
- Signed entry condition report documents and photos (if available)
- Keys and garage remotes, including signed key receipt
- Last two (or more) routine inspections
- RTA Form 5 – Change of property manager/owner
- Compliance documents, such as smoke alarm compliance certificate and pool safety certificate (if relevant)
- Documentation about any ongoing maintenance or dispute issues
- If relevant, Form 11 or Form 12
Ready to switch to Perth’s best property manager?
If you want tailored and knowledgeable support from a property manager that knows how to accelerate your return on investment, we’re here to help.
HERE Property offers nearly 40 years of experience in the Perth market. Our expert team is 100% focused on simple, smart, and proactive property solutions.
To discuss how we can help you take a holistic approach to your property investments, contact us today.