This is regarding an IP we have put on the market through a new PM. Very low vacancy rates in the area and the PM had the keys for over 2 weeks (from the settlement day). The day our IP was advertised, a unit next door came on the market with slightly less rent though it's a smaller kitchen and no two properties are the same.This competing property is being advertised by another agent who charges a lower commission and they have a 3 month free management promotion as well. They received 1 application last week and lost the perspective application on day 4 after they failed to verify his employment. It appears that they asked for excessive documentation from the perspective tenant who worked in government and lost interest after he was asked too much of a paperwork. Now the PM wants to convince us that they will be able to find another very quickly if we dropped the rent by $30. Ofcourse dropping the rent works because it's easier for them. If it was up to them, they would make it free rent and there would be no trouble in finding a tenant. My feeling is that they are just cutting the corners and don't want to put in any effort in finding a tenant. I am thinking of picking up the keys on Monday if they can't find anyone after tomorrow's open and go for that cheaper property manager. Why pay these guys more if I have to drop the rent? Advice please!
Hi @standtall Have they given you any feedback on the opens? What people have indicated about the rent and the unit? We had this agent who was overly keen on advertising 'rent free' week - as you say, it was just to make their life easier. Not just with us, but recommended the same to others too. Why is the other PM cheaper? Have you had any feedback on them? Where is this IP located?
Last Saturday's open wasn't advertised until Friday night and they had 2-3 people come through and one made an application on Friday. This is a main street agent with plenty of foot traffic and they don't focus much on opens. In the hindsight, they are probably one of those agents who hope for tenants to show up without putting much effort. Not sure - I think they had a change in owners and new owners want more business. I think our current PM has just taken a position that we need to drop the rent and she's hoping to prove her point (subconsciously probably) by putting in lackluster effort and in the process actually driving someone away who had no problem with current advertised rent. This is on central coast but vacancies are really low (under 1% in that area). Our Sydney PM is a doer and she always finds a tenant even before the open on Saturday regardless of market situation but it looks like we will have to drop our standards for this property.
You could be right considering that the unit next door was leased already. The advertising could have played a part and also the communication with prospective tenants. Speak with the other agent and ask them what they do differently to get an idea if they will do a better job for you as well.
A few things that as both an investor and PM business owner I believe they should be doing (or you allowing them to do). 1. Pay for a Highlight listing on realestate.com.au. It depends on the post code as to the cost (not the rent for the property) but in my and our experience it definitely works very well to attract far more enquiry (which in turn leads to lower vacancy). Having more people at your inspections creates a sense of competition (as with any product). You can see the benefits and stats of a highlight listing on the re.com.au website here. 2. Make sure you get or are using professional photos and make sure there are enough of them to entice people, including a photo of the kitchen and bathroom. It's amazing how many listings I see that don't include enough photos or certain photos for whatever reason as all it does it make the viewer think they've been excluded intentionally to hide something and they move on. Professional photos make an absolute world of difference to enquiry and the cost is relatively small. Best of all, it is a one off cost that can be used over again until you update the property again. Check out this Buzzfeed blog to see how it can make a difference to the online appeal using professional photos. 3. Make sure your agent is willing to show the property not only at opens, but also for private inspections and after hours if required. You will find that a lot of agents don't do private inspections at all and many won't do them after hours when many prospective tenants are only able to make it due to work or family commitments. We have found this has dramatically increased the number and rate at which applications are received as we can get more prospective tenants through in a shorter space of time! 4. Regarding rent, it's a balance between meeting the market and the supply around your area or even street and not undercutting yourself just to get a tenant. Given the property next door is renting for $30 less, is that the market or are they simply trying to undercut you to get a tenant? Has your PM overshot the mark with respect to the amount? It's in your PM's interest to maximise rent too (they don't want free rent as you've suggested) as they make their revenue from a percentage of that rent. I wrote an article on reducing the rent if necessary on our website - unfortunately by the rules of this site I'm not allowed to link directly to it but go to 'For Investors - Investor Articles' to read it. All in all, if the vacancy rate is low, the property is priced correctly and the advertising and inspections are done properly (and you spend a little money which is tax deductible anyway), you should have no trouble letting your property. Just be prepared to make small reductions (I do this every 3-5 days depending the level of enquiry report from my PM) if these are required to get a tenant. Nothing kills your return more than vacancy...well, possibly interest rate rises...so it needs to be a priority for the PM. Good luck! - Andrew
We had this issue too - we turned up to see the property with the PM - it was meant to be an open - but if it didn't say on RE website, not sure how prospective tenants would have known Hope you don't have to drop the rent to much - and the PM lift their game!
Yeah, I think my patience with this PM would be just about run out. Might be time for the other PM. If it was my IP one of two things would have happened. Either I'd have the PM in a headlock or he/she would have me in one and forcing me out the door lol.
Our regionally based PMs have placed tenants into our IPs without discussion of tenant profiles with us - four different PMs - we have worked to address the matter on each case until they forget and do the same thing again...a solution was to discuss shared expectations and if ignored to change PMs which we did with one PM agency. I wonder if s discussion of shared expectations could be helpful ?
I'm in the same boat - but my property is in the Illawarra area. Changed PM, but I think this current one is worst. Don't know why she thinks she should lied about receiving an application. I sensed it from the very beginning and decided to play along with her. I knew the possible answers she would give by the end of week and BINGO I was right (they'd found another property and withdrew the application). So not happy with this person as I have no respect or trust in her now and we'd only signed up with her for one week. What should I do??
We have just had an applicant withdraw an application today - quality applicant profile - $200K income, moving from Gladstone...decided after being issued with a lease agreement to sign on Saturday to rent a serviced apartment instead and purchase a home which was not shared during our previous conversations - they admitted they only thought of that today over lunch...applicants withdraw applications - this is how things sometimes go...we already did an inspection by private appointment tonight for a new inquiry as we immediately scheduled another Open and inspection by private appointment anytime...until the four weeks bond and two weeks rent is in the bank and lease signed the deal is not complete...anything can happen in this game... a quality PM is agile to work for solutions in an ever changing environment
Thanks everyone for responses. I think we would be looking for a new PM. The current ones have just a 'sit and wait' approach and not to mention that they still haven't been to organize a professional clean after around 20 days. On top, they just sent a quote of $185 to change a light bulb in the kitchen. What would be the best approach to get rid of them? Just go and ask for the keys?
Really, $185 to change a light bulb.. Yes it's best to go into their office, ask to get your keys back and give them to another agency.
