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My Property Manager's Friend as my Tenant
My property manager (PM) advised me that due to the current flood of vacant properties on the market, it could take considerable time to rent out my property – even with significant demand in the area. The following day, he told me his friend would like to rent my property at the market rate. After he vouched for his character and reliability, we agreed the friend would take over the tenancy of my property.
Are there higher risks associated with agreeing to rent my property to someone who is closely associated to my PM? How do I know my PM is looking after my interests ahead of those of their friend? Is this common practice?
It certainly isn’t common practice, but I have seen this happen before. I organised a tenancy for a friend some years ago, but was prudently assigned another PM in my office to be the tenant’s point of contact. My advice is to take a cautious approach to your potential tenant’s application and be sure to go through the usual steps to ensure they are reliable and trustworthy. Ask for references and the usual documentation rather than accepting someone’s word alone.
Upon approval of their tenancy, I would advise the referring PM doesn’t deal directly with their friend/associate, as they may find significant conflicts of interest developing. We know money can often be the bone of contention between friends and you don’t want any relationship issues to adversely impact your property investment. Of significant concern for you, is the possibility your PM may be more inclined to be lenient or even turn a ‘blind eye’ to a family member or friend’s late payments or infractions – possibly putting the tenant’s interests before yours.
This is not something you should have to concern yourself with upon securing a tenant and the services of a PM. Therefore, while it is acceptable for the referring PM to monitor the tenancy, I would ask my agent for another PM to be the tenant’s main point of contact – this decreases the possibility of emerging conflicts of interest.
In my opinion, as long as another PM in the office handles the relationship with your new tenant, there should be no greater risk having them in your property, versus someone completely unknown to you. However, always remember it is your property and you are entitled to ensure your agent is exercising due diligence to ensure it is cared for in the manner befitting a significant investment.
– Nicole Keene
High Property Manager Turnover
Is there a way to identify property management companies who have a low employee turnover and a record of good client service? My current agency has changed my property manager (PM) three times since I signed up with them and I find this inconsistency is disruptive to my tenants and myself. To add to this, they never inform me of the change until the last minute or even until the new manager is in place. Is it worth changing my agency because of this? What are my options?
I receive many questions along these lines and in this industry, the answer is more often than not “do your research”. You can only rely so much on your gut feeling and people’s good will, so I always recommend you do some fact finding before settling on a decision.
When looking for the right PM for your property, you need to make sure you ask the right questions. While it would be nice to implicitly trust that your agent is doing the right thing by your property and you, it always pays to take some time to be absolutely sure. When meeting your potential PM for the first time, ask for a brief bio or background outlining their experience and their tenure with their current company. Try to get to know them a little, as their opinions and attitude could determine how well your property is cared for and, again, pay particular notice to their tenure at the agency.
As for the agency itself, it is certainly worthwhile asking them some hard questions too. For example, how many staff do they have in their property management department and how long have each of them been employed there? Do they have any testimonials? Why should you choose them over another agency? Asking questions like these and carefully considering their answers will give you a good idea of how your potential agency will perform and provide insights into what a future relationship might hold.
As for analysing your current agency, the decisions on the standard of their performance and the actions that need to be taken are yours. If you are finding the current levels of service are poor, or the PM turnover is too high for your liking, only you can change your circumstances. My advice is to use unsatisfactory performance as a catalyst to investigate further and possibly begin researching potential replacements. Remember, a property manager is there to make life easier for both your tenant and yourself. If you are finding your current agency’s performance is adversely impacting both parties, I would say it is definitely time for a change.
– Nathan Birch