Unhappy with your current property manager? We answer the common FAQs on what’s involved in switching property management agencies.
When you pay for something, you naturally expect quality service. But when that service involves the management of a high-value asset like a rental property, what you get from that service becomes all-the-more important.
The quality of property management you receive can have a significant impact on your success as an investor. It can shape rent returns, impact your compliance with legal requirements, and even have a bearing on the capital growth you achieve.
So, what happens if you’re not happy with your property manager? We look at what’s involved when you want to change your property management company.
Can I change property managers if I’m locked into a management authority?
Amanda Kroczek, Team Leader of our property management division at Momentum Wealth, explains that a ‘management authority’ – in other words the formal agreement you have with your property manager – usually involves a fixed term.
This term will generally range from 12 months to three years – a powerful reminder of the need to choose your property manager with care.
If you are still within the agreed term, you’re not necessarily stuck with an underperforming property manager. However, the process of switching property managers can be more complex.
“It can be possible for the property owner to terminate the management authority before the fixed term has ended,” says Amanda. “But there may be break fees involved, so owners will still need to consider their overall returns in making this decision.”
These fees can see investors wait until the fixed term comes to an end. The upside is that this provides time to shop around for a new property manager that better supports your investment goals.
“Once the fixed term has expired, the owner can end the management authority by giving 28 days notice,” Amanda notes. “Or, owners can fast-track the process by giving the property manager advance notice that they don’t plan to continue using their services once the formal agreement comes to an end to avoid this 28-day wait period.”
How easy is it to change property managers when you’re not locked into a management authority?
The picture is more straightforward if you’re not tied to a formal management authority.
When the formal management term expires, most agreements will automatically continue. This may be fine if you’re happy with your manager. If you’re not, or if you believe you could achieve better returns elsewhere, you have the opportunity to change property managers without incurring unwanted costs.
Amanda explains, “In this situation, the property owner just has to give their existing manager 28 days notice. Or they can ask their new property manager to take this step on their behalf.”
From there, the new property manager will organise the necessary transfer of documents with the old manager, and arrange to pick up the keys, making the process very straightforward for the owner.
Can I switch property managers mid-lease?
A property lease is an agreement between the owner and the tenant – not the property manager.
That being the case, having a tenant in place shouldn’t stop you taking your business elsewhere if you’re dissatisfied with your current property manager.
In fact, the process is pretty simple – the new property manager will get in touch with the tenant to let them know about the changeover, and ensure a smooth transition.
The bottom line is that you don’t have to feel locked in indefinitely to a property manager who isn’t delivering the best possible service for your investment property.
What should I expect from a property manager?
Your property manager will play a key role in guiding the long-term returns of your portfolio.
While a good property manager will cover the essentials of managing your rental property, such as selecting the right tenants, coordinating maintenance and ensuring legal compliance, the best property managers – ones who will truly maximise your returns – will also focus on proactive strategies to enhance your rental income.
We explore this topic in more detail in our article on what’s involved in property management.
In the meantime, if you have any further questions on switching property managers, get in touch with our team for more details on the process.