Changing property management companies in 2021
For most property investors, the moment you realise you should change property management companies is when it’s too late.
After speaking to many of my clients, it’s obvious there were a lot of red flags over the years that they should have picked up on but didn’t. This was either through lack of experience or not having a clear understanding of the service they should be receiving.
In this article, I’m going to highlight some obvious signs that something isn’t right with your current Property Management company, the most common reasons we’ve had clients move their properties over to us mid-tenancy and how to make the change to a new property management company.
Signs you should change Property Management companies.
If you’re already asking yourself the question, then that’s probably the biggest sign that somethings not right.
As soon as you start feeling your agent isn’t giving you the service you require, it’s time to look for someone who will. Here are some ‘red flags’ to keep an eye out for and if they’re ringing true, then it’s time to start looking elsewhere.
- Lacking confidence
If you’re wondering whether or not your property is being taken care of, you may need to rethink your choice of property managers. You should not have to worry about your property if you have a capable manager. Sure, you can worry if there’s something that needs repairing or there’s a major issue, but not the ability of the manager to handle everything cost-effectively and in a timely manner.
- Struggling to Communicate
If you’re battling to communicate with your property manager, that’s a big red flag. Your agent should be able to tell you if anything out of the ordinary happens with your property and should be readily available when you need them. You should be able to get hold of your agent directly – someone dedicated to your property and who will answer your calls or return your messages and phone calls.
- Watching the pennies
Sometimes it really is worth paying more for something and that rings true with a property manager. Paying a bit more will get you top quality management and a lot less headaches. You may also get less repair bills. You don’t want a manager who is making up repairs, for example, to try and get more money off you to fix the problems. With a manger who costs a little more and who is accessible, you can rest assured that if something is wrong, it’s legitimate.
The Bottom Line
When you hire a property manager, it’s exactly like hiring someone to work for you. So when something doesn’t work for you or you have any doubts whatsoever, you can do something about it. The investment; the property – they are yours. It’s worth making the extra effort to find property manager who will deliver on your expectations.
Why do landlords change agencies?
I was recently contacted on LinkedIn by a property investor who was unhappy with her current Property Manager and was looking to change agents. After catching up with her to discuss the problems she was having and her needs moving forward, I heard the same story I’ve heard over and over again about what makes landlords transfer their properties over to us to manage.
Her issue was that she had 4 properties being managed by one of the larger agencies in the area and in the last 12 months, her property manager had changed 4 times. To make things worse, anytime she called her property manager, she wouldn’t answer her phone or return her calls. Even when escalating the matter, she was dealing with management who knew nothing about her properties and couldn’t answer any of her questions.
These issues aren’t unique to this specific client and if you’re reading this article, you may have experienced a similar experience with your property manager.
Here are some of there other most common reasons landlords have asked me to takeover the management of their properties:
- Lack of communication from their existing Property Manager.
- High staff turnover and not sure who their Property Manager actually is.
- Maintenance not being attended to in a timely manner.
- Rent not being reviewed in order to keep up with market rates.
- Property not regularly inspected by Property Manager.
- Finding random charges on their monthly statements which they didn’t approve.
- Insurances, Council Rates, Bills and other expenses paid by the agency don’t get paid in time and incur additional fee’s.
- Property Manager doesn’t “have their back” – always favouring the tenant.
- Long vacancy periods between tenants.
- Inexperienced Property Manager managing their portfolio.
How to change Property Managers?
If you’ve decided to fire your property manager, making the move to a new agency is usually quite simple. Many landlords don’t realise just how easy it is to switch property management companies. In fact, once a client engages us to take over their property, we will handle the entire transfer for them.
At Besser+Co, whenever we have a client who wants to transfer their property over to us to manage, we handle the entire transfer process – from start to finish. This includes collecting all the files and spare keys from the current agency, updating the bond authority and notifying the tenants of the change.
Here’s a list of how we ensure a smooth transition for both landlord and tenants to our agency.
- Landlord authorises us to takeover the management of their property.
- We contact your current property manager notifying them of your transfer and send them a checklist of documents to prepare for our collection. This includes lease agreements, rental payment ledgers, ingoing and routine inspection reports, bond receipts, insurance details, tenant contact information, copy of all keys and any other relevant documents they’re holding on file.
- We notify your tenants of the change of management and send them all their relevant contact details and instructions on how to report maintenance and pay their rent.
- Confirm with you once it’s all done and make sure you’re updated at every stage.
Here are some tips to make the transition between property management companies as simple as possible for all parties.
Check for Termination Clause and Notice Periods
We recently took over a property for a client and I was surprised to see her agents had a ‘Termination Clause’ in their Management Agreement. This clause required the owner to give the agency 60 day’s notice (2 months) before terminating her contract. She had the option of either putting up with 2 more months of their lack of service or pay them out for 2 months of management fees. We helped her negotiate out of paying this clause.
Notify your current agent in writing
To avoid any confusion, it’s best to give your current Property Manager notice in writing. In most cases, we handle this for our client. We would email your agent to notify them of the change and ask them to prepare the property file for our collection.
Keep it professional
The decision to change agents usually comes after something goes wrong. This can usually be quite a stressful and emotional time for you and it can often be hard to keep the emotions out of your decision. My advice is to let us handle the changeover.
Check for Hidden Fees
Have a read through your contract to see if there are any early termination fee’s. If you’re currently in an exclusive management contract, the agency may charge a fee until that exclusivity period ends. In my opinion, I would not engage with an agent who has this in their Management agreement.
Make sure tenants are informed
If we are handling this for you, we will ask your agent to confirm the change of management with the tenants so they are clear on what’s happening. We recommend this is done via email with the previous agent CC’ing us in the email so the tenants know who we are. It can be a little awkward when we collect a file and contact the tenants to introduce ourselves when their previous agent didn’t tell them.
Time the transfer of your changeover
When you’ve decided to changeover agencies, the best time to do this is as soon as the tenant has paid his monthly rent. This will give us enough time to notify them and for them to change over any direct debits they’ve set up for the previous agent. Giving them enough time will ensure the rent payments transition smoothly between the old agency and your new one.
Collect the correct paperwork
When you let your current agent know you’ve decided to changeover property managers, there will need to be an exchange of files. Either you as the landlord or your new agent will need to collect copies of all leases, bond receipts, Ingoing Condition Report, Routine Inspection reports, tenant information, rental payment ledger, a list of any outstanding maintenance and any unpaid invoices. These should then be filed with your new agent. Oh yeah, you’ll also want to make sure you collect all keys, remotes and fobs the previous agent was holding on to.
If you are unhappy with the service you’re currently receiving from your Property Management company and you’re looking at changing agencies, don’t hesitate to give the team at Besser+Co a call to discuss your needs and see if our experienced team is a good fit for you.