Make 2 Property managers agency to compete for your property. it's good idea?

Hi all,

I heard today from another investor saying, when she was looking for a PM for an empty property she talked to 2 property managers and make them compete, the one that get a good tenant earlier was getting the business.

Did any of you tried that? I have freshly renovated house that's being vacant for 1.5 months and needless to say I need a new PM and I thought that could be an interesting idea.
She also mentioned the PMs hated that but worked for her.

any thoughts, experience?

thanks

 

I wouldnt bother doing it. As it is its hard enough getting any decent pm. But to make them duel off from day 1? Doesn't set a good tone. Just go with one you feel is decent and comes recommended and fingers crossed.

Also i hate to break it to you but no matter what any PM tells you about a tenant (assuming they pass the obvious prelim checks) , you won't know if they are good or bad until after the fact .

 

The first agent to get an application will submit it for approval. You will end up with the agent who is quickest off the mark for the first opening time not necessarily the best fit tenant.

 

Finding the right tenant isnt a case of "the early bird catches the worm situation"
PMs cant force or push tenants into applying for the most part

also, think about it, your management fee x weekly rent is decent, but theyre not going to spend a full week full time on finding you a tenant just to get your business,
PM is a numbers game

if you are struggling to get a tenant, if you are upfront with the PM about getting a second agency involved, they generally understand and dont mind, provided that you dont put them against each other, eg different pricing

my 2c

 

Bad idea. Forces the agent to get in anybody with a heartbeat asap and forgo the usual due diligence just to get ahead of the other agent. Its a good idea on paper but has mixed results in reality. Having two agents hate you so early in your business relationship doesn't help.

Speak to a couple of agencies and go with the one who seems most competent (not necessarily the most expensive) and give them space to work and secure tenants. Trust them until they do something that breaks that trust. Their advice might be spot on if you're having trouble finding a tenant, or they might be full of ****. Wide range out there across both franchises and smaller independent agents unfortunately.

Let us know how u go

 

What if they don't compete and your reputation gets around town and you end up with no one wanting to do business with you?

 

^ ^ this.

 

not a good idea in general, you want a long term good tenants, it takes time to find them.

so choose a good PM to start with, then let them choose a good tenant for you.

finding "good" tenants is not really in your control, and it is largely depending on the screen process of the PM, and the opinion of the PM. very subjective matter.

 

It sort of tells by the property sitting there for that timeframe it's not a good rental market,not something you would want to try in a small area like inner Brisbane as there are some many for lease for rent signs..

Another item is most Agent's know each other very well within small area's ,and on a scale of 1=10 I would say you have zero percent of this working..

 

There is actually a lot to say or consider before you can make that direct link! Hopefully it helps answer your question.

Broadly speaking (this is not comprehensive but condensed to save RSI) there are two key factors to consider. The first is agency factors, or things that the agency can control in the letting process. Some items for example:
- is the marketing copy sharp
- professional photos (partly owner)
- is the house well presented, clean, tidy yard etc
- are they doing private and open inspections at times that suit the prospective tenants
- is the ad an enhanced listing, and if it has expired, has it been re-boosted
- are they collecting feedback from potential tenants at inspections
- are they processing applications in a timely manner
The list goes on and on!

Secondly there are property factors, or things that the agent can't necessarily control. Some examples:
- general market conditions
- features of the property that the tenants desire
- is the price competitive (of course the agent can control that only if the owner agrees)
This list goes on also.

If the agency is doing everything right in terms of the agency factors, then you have a "property problem". Conversely if similar properties are renting quickly and your price is competitive, then you have an "agency problem".

The description of it being freshly renovated in the above context could be irrelevant. If it is overpriced it is overpriced. If it has fresh paint and carpets but no aircon and that is what the prospective tenants are saying they want via consistent feedback, then you still have a problem. If it is sitting on page 4 of the listings and the prospective tenants can't get an inspection time that suits, you still have a problem.

Getting back to your original question, based on the above I don't think it is a good idea. Consider the two factors and make an assessment from there. If you are not satisfied that the agency is doing everything they can that is in their control, then look for a new agency but assess them on their process and how they address the letting components they can control. If you can objectively see they are doing everything in their control to maximise the success of the letting process but it is still not working, then have a good look - objectively - at the property factors.

- Luke

 

Hi All, thanks for the advise, based on all the recommendations where everyone said "don't do it" I decided to choose just the best PM for the long term. Now I have a new PM and she is very proactive so far.

Thanks again

 

Good move.

Trying to play two people off against each other rarely brings out the best in either of them.