The selection of a property manager is an important factor that can significantly impact the success of your investment. A competent property manager can assist you in optimising rental income, attracting and retaining high-quality tenants, and preserving the value of your property. Conversely, a poor choice can lead to expensive errors for investors, such as undervaluing rent or neglecting property maintenance.
To protect your investment, here are the key mistakes to avoid and how to ensure your property manager is working in your best interest.
1. Underpricing or Overpricing Rent
One of the biggest investor mistakes is failing to price your rental property correctly. If your property manager sets the rent too low, you lose out on potential income. If they set it too high, your property may sit vacant for extended periods, ultimately costing you more.
How to Avoid It:
- Work with a property manager who conducts regular rent reviews based on current market conditions.
- Ensure they have access to real-time local rental data.
- Ask for a strategy on how they will keep your property competitively priced.
2. Poor Tenant Selection
A bad tenant can cause financial and legal headaches. Late payments, property damage, and tenancy disputes are all risks that come with poor tenant screening.
How to Avoid It:
- Ensure your property manager has a rigorous vetting process, including background checks, rental history, and income verification.
- Look for a manager who prioritises long-term tenants with stable financial backgrounds.
3. Neglecting Repairs and Maintenance
Delaying necessary repairs or ignoring maintenance requests can lead to major property damage and expensive fixes down the line. Worse, it can put you at risk of non-compliance with rental laws.
How to Avoid It:
- Choose a proactive property manager who schedules regular property inspections.
- Ensure they have a reliable network of tradespeople for prompt repairs.
- Set clear expectations for urgent maintenance responses.
4. Lack of Clear Communication
A property manager who fails to keep you updated on rental payments, tenant issues, or maintenance concerns can leave you in the dark about your own investment.
How to Avoid It:
- Work with a manager who provides detailed monthly reports.
- Ensure they have a responsive communication policy (e.g., same-day replies for urgent issues).
- Ask for a clear escalation process for unresolved matters.
5. Not Meeting the Market’s Needs
A common mistake first-time investors make is failing to buy properties that appeal to local renters. Nicola McDougall, PIPA chair, (as cited by property journalist Kate McIntyre) said, “It’s not about you, it’s about whether that property is in the highest demand from tenants and future homebuyers for that location.”
If your property manager doesn’t understand local market trends, they may struggle to attract and retain tenants.
How to Avoid It:
- Ensure your property manager has strong local market knowledge.
- Ask for insights on which property features attract tenants in your area.
- Stay informed about shifting renter preferences, such as pet-friendly homes or energy-efficient upgrades.
6. Failing to Regularly Review Management Fees
Many investors sign with a property manager and never review the management fees again. Over time, you may end up paying more than necessary without receiving better service.
How to Avoid It:
- Compare fees across different agencies annually.
- Ensure you’re not being charged excessive hidden costs (e.g., leasing fees, marketing fees, or admin fees).
- Make sure your property manager’s service justifies their fee.
7. Not Having a Clear Lease Agreement
A poorly structured lease agreement can lead to disputes, unpaid rent, and difficulties when trying to regain possession of your property.
How to Avoid It:
- Ensure your property manager drafts leases with clear terms on rent payments, maintenance responsibilities, and lease renewals.
- Make sure leases align with the latest NSW tenancy laws.
- Request regular lease reviews to keep agreements up to date.
Avoiding these investor mistakes starts with choosing a property manager who is proactive, transparent, and committed to maximising your rental income. Mclaws Property is dedicated to providing investors with a profitable and hassle-free property management experience while helping you avoid some common and expensive mistakes.
If you’re looking for expert property management that puts your investment first, get in touch with us today!