Step 2 - Building Your Team
Just to be clear, these team members are only labelled as 'flexible' because the specific person you use may change depending on the location you are buying in, not because sometimes you don't need them - you always need these types of people when purchasing a property.
Flexible Team Member - Property Manager
A property manager is a licensed real estate professional who manages rental properties on behalf of landlords. Your property manager is your eyes and ears on the ground and they are the people who make property investing as easy as it possibly can be - you can't be a successful property investor without a great team of property managers.
Their key responsibilities include:
Leasing: Advertising the property, screening applicants, running reference checks, and preparing lease agreements.
Rent collection: Making sure rent is paid on time and chasing arrears if needed.
Property inspections: Conducting routine inspections to check maintenance, condition, and tenant compliance.
Maintenance & repairs: Organising tradespeople and ensuring work is done properly and cost-effectively.
Legal compliance: Ensuring the tenancy complies with state/territory legislation (e.g., bond lodgement, notice periods, tenant rights).
Dispute resolution: Handling issues between landlords and tenants, sometimes appearing at tenancy tribunals.
Financial reporting: Providing owners with monthly statements and end-of-financial-year summaries for tax purposes.
In other words, they run the day-to-day tasks of your property investment, so you can live your day-to-day life as uninterrupted as possible. They are also the main reason why you can now easily invest inter-state because this means you don't need to actually take flights around Australia to perform inspections / check-in on your property because your property manager will do that for you.
For those who are going to purchase in the city they live in (because the data says so I hope…) I know it is tempting to manage the property yourself to save money; however, I would strongly advise against that. This is because not only are property managers the experts in terms of securing the right tenant, limiting vacancies by marketing the property for the most realistic rent and making your life hassle free, but they are also well versed on the legal compliance issues in your specific state. If you manage the property yourself you run the risk of breach certain legal obligations that you owe to your tenant which could costs you thousands of dollars.
I don't care if your parents said they'd help you with managing it… if they are not qualified property managers you should respectfully decline the offer and engage a professional.
When should you engage a property manager?
Ideally you should be engaging a property manager once you have identified the suburb/s that you are looking to invest in and before you sign the contract on a property. This is because property managers are a crucial element of your due diligence process.
Great property managers (who want your business) will actually attend inspections for properties you have identified so that you don’t have to (i.e. enabling you to invest interstate) and they can also let you know the good and bad pockets of suburbs so you can make sure you are avoiding red flags such as social housing commissions and busy roads. Remember, don't trust the sales agent with these questions, they are not on your team, but your property manager will be. They are the ones that want your ongoing business and they will want to make sure you secure a great property as it also makes their jobs easier in terms of managing it going forward - you have more aligned interests with the property manager than the sales agent. Just make sure the sales agent and property manager aren't from the same company…
I discuss the specific due diligence queries to ask your property manager later in Step 6 and I will give you a template email to send if you want to use a property manager to inspect properties for you, but for those who want a bit more information please check-out these videos.
Now if you have gone down the buyer's agent path then you likely won't need to go out and find a property manager yourself and you probably won't be dealing with them until after you have signed the contract of sale. However, if your buyer's agent isn't located locally to your property that you are purchasing you need to ask them what their on-the-ground due diligence process is like and are they verifying information with independent property managers.
Where do I find a property manager?
I would recommend using 'ratemyagent' in order to identify property managers in your desired location (make sure you are in the 'rentals' section of the website otherwise you will just get recommended sales agents).
If not many are showing up, you can also search for rentals in the area using realestate.com.au or Domain and then see which property managers are advertising in the area then contact them directly from there.
How do I know if they are a good property manager?
When checking if a property manager is experienced and competent enough for you to engage them you should consider the following:
Properties must be listed online within two business days, you should also check if they do ‘off-market’ listings good property managers should have a list of good tenants looking for properties.
They should have a very deep understanding of the property market in the relevant area - they should be able to tell you what the good / bad pockets of a suburb are, what tenants like and any other ‘on the ground’ issues you should know about.
Each individual property manager should oversee a portfolio of anywhere from 100 - 200 properties. You want to query about this just so you can confirm that the property managers are not getting overwhelmed / are understaffed - there is no strict threshold you should apply here in my opinion, this is just a guide as it is largely based on the competency of the managers and the type of resourcing they employ (i.e. if they do task-based resourcing, which you can ask about, they can usually manage a bigger portfolio).
The agency’s vacancy rate should broadly align with the vacany rate data for the area.
The standard lease length for the agency should be a 12 month (or longer) lease.
Tenants should be approached for lease renewal no later than two months prior to expiry - noting that this may vary depending on the state, as each state has different legislative requirements.
The property manager should have connections with multiple tradies / handymen and they should regularly review the tradespeople that they recommend to their clients.
They should be performing the maximum amount of general inspections that you are allowed to do in the relevant state.
You should also start off by asking the property manager for them to give you an general overview of their services and the fees they charge. Make sure you chat with a few agents around the suburb/s you are interested in so that you can get an understanding of their offering and fees. When appropriate feel free to negotiate the fees if there is any major differences between agencies - including the management fee, advertising fee, lease renewal fee and administration fee (some agencies will waive some of these if you ask, if you don't ask you don't receive).
One thing to note, as I see people I know get sucked into this all the time, do not make your decision solely based off price… a quality property manager is worth the few hundred dollars a year they may cost you…