Current Market Insights
The Current Market Insights Podcast is brought to you by Harris Partners Real Estate.
Understanding the property market can be a challenging thing, with highs and lows, twists and turns. The media and agents tend to spread the news they want you to hear, with the advice they want you to follow.
Current Market Insights is an unbiased look into what is happening, what tips you can use to buy, sell, or rent, and that you wont find anywhere else.
Current Market Insights
Episode 101: Choosing the Right Property Manager
Hosts Ciaran O'Brien and Peter O'Malley unpack how to choose a property manager who genuinely protects your asset — not one who disappears after signing the agreement. From understanding the difference between a BDM and a true property manager to spotting red flags and compliance traps, this episode lays out clear, practical steps for landlords.
We also discuss:
- Why you should always meet the person who will actually manage your property
- The difference between sales-oriented BDMs and day-to-day property managers
- Warning signs of a “tenant’s champion” mindset that undermines owners
- How to assess arrears processes, performance metrics, and communication standards
- What to ask when checking references from current landlords
- Protecting your own home when leasing it out for the first time
- Understanding fair wear and tear versus property damage
- Common compliance pitfalls and the impact of new legislation
- How AI-driven enforcement is changing property management
- Why service fees should go toward management quality, not cold lead generation
As always if there is a specific topic you would like for us to cover, please reach out and let us know!
Hello and welcome to another edition of Current Market Insights. I'm your host, Kieran O'Brien, and with me is Mr. Peter O'Malley. Peter, hello. Kieran, great to see you. Always great to see you, my friend. I want to talk about a topic today that we haven't done on the podcast, which is pretty rare because we really have spoken about a lot of things in the time that we've been doing this. But recently I've been heckling and hassling you over uh whether or not investors are coming to the Sydney property market. And I thought it might be a really good idea today just to talk about what is involved if you are an investor or you've just purchased your first investment property or you're thinking about it, what is involved in selecting the right person to manage that property for you? We've done something similar in sales, uh, but I suspect that it's just as important to make sure you get the right person for your investment as well.
SPEAKER_02:Well, look, what I'd say first and foremost, Kieran, is when you're employing a salesperson to list and sell your home, in 80% of cases, um, the person who's presenting for the listing is the person that'll manage the sales campaign. Yep. So the person you sign with is the person that you can hold to account on service delivery. And in fairness, it's not a very long relationship relative to what a property manager is all about. What's really common in the real estate industry is uh what they call a BDM, a business development manager, whose goal it is to go around and sign up new rental leads. Now, that person makes a lot of promises, um, but is not necessarily around, he's actually highly unlikely to be around to deliver on those because the business development manager is completely different to the property manager. Yep. Now, a business development manager is as close to a real estate salesperson that you're likely to see in the management side of the industry, where a property manager is not necessarily the big personality of a salesperson. Um, they've got more of a conscientious, uh, detailed, diligent personality. But when you meet them, um, relative to putting them up against the salesperson, they could seem un underwhelming. Yeah. But their service delivery is excellent and consistent over a long period of time. So I think investors get this one wrong, is what I'm saying in a roundabout way, is a lot of investors go with the big personality that presents for their for their rental listing, but that person quickly moves on with a commission check in the pocket, hunting the next rental listing opportunity, and then the client is passed on to a property manager whom they may or may not be in sync with, they may or may not be happy being under their uh guidance, but they're now stuck with them, at least for the period of the termination of the agency agreement, if they become desperately unhappy and want to move. So, point number one in selecting the right property manager is establish who the property manager is, and you're not selling your house, so you're not actually hunting a salesperson. Yeah, you're hunting a property manager.
SPEAKER_01:Yeah, you're looking for someone who's methodical. And I'll get you to talk about the key skills involved in a good property manager. You've known plenty over the years. Uh, but the first question is if I invest in property and I go to an agency and decide um that I want to get a property manager for it, how much control do I actually have as the client over who is going to manage my property within that agency, business group, team, whatever it may be? Can I interview them and decide on a person I really like?
SPEAKER_02:Well, the most power you'll ever have dealing with a real estate agent and a real estate agency is before you sign. Yeah. So the time to ask all the hard questions and satisfy oneself as to what you're going into as such is before you sign.
SPEAKER_01:Yeah. Yeah. Okay. So practically though, within your agency, do you give your clients the ability to choose their property manager from within your team of managers? Or do you sort of work on a premise of we all have we have great people all over the business? Therefore, when you come on board, you get the the team.
SPEAKER_02:Oh, there's there's personalities and you and you do you do try to match personalities with the property manager. So I wouldn't say that every I wouldn't even attempt to say that every property manager's got the same personality. I'm just saying that some of the characteristics that make a good property manager uh are are at odds with what a good salesperson is. Yeah. Um, and that's what um a investor should be looking for is what are the good characteristics in a property manager? And I want to go with that person. So um you're not necessarily looking for a best friend, but you are looking for professionalism, yeah, your punctuality, uh, someone who's a who's across their brief, and you can have a good working relationship with them.
SPEAKER_01:So you're looking for those key skills, someone who's an advocate for your property, your, you know, your kind of investment with the firm, you're looking for someone who's efficient. As we've talked about in the sales space before, what are some metrics or measurables that a potential client could use to say that this particular property manager is a good investment for them?
SPEAKER_02:Look, I'll tell you what drives landlords mad with their property manager more than anything, after a salesperson who makes all these promises and then moves on and doesn't have to deliver on them. Their next stress point from there, Kieran, is what we call a tenant's champion. Right. And that is a property manager who's being paid by the landlord, but is constantly telling the landlord what the tenant's rights are, and um uh you know, taking the tenant's side in any 50-50 equation. Now, there's no doubt that the rules and the regulations have swung firmly in favor of the tenants in recent times, but a well-managed property by a skilled property manager can help a landlord tiptoe through all of that regulation to still get the landlord the outcomes that they're looking for. But the agent needs to be effective in communicating and working with their landlord. And too often I've seen from property managers, no matter what goes on, the don't ask me why, the agent, the property manager, sides with the tenant. Okay, and it's usually because the tenant is in the agent's ear, not necessarily more correctly um positioned on the issue at hand, but they're in the agent's ear more emphatically, and the agent's just finding it easier to get the landlord to spend money to uh concede on on the request just to keep the relationship working. Now, that's hard for some landlords to accept because they're negatively geared. Now, everyone talks about the tax break that one gets with negative gearing, but what you don't see is that they've got to prop this property up on a weekly basis to make it viable and meet their obligations. And if they've got a property manager that's pushing, constantly pushing expense and issues onto them because the property manager won't hold the tenant to account where required and where needed, it makes for a very unpalatable relationship.
SPEAKER_01:If I'm a potential client, so some really good points, but if I'm a potential client, is there any? I mean, how can I go about finding out what kind of character the property manager is? You know, you've we've talked about in sales before, you could potentially ask for previous clients that you could contact, people that you could talk to. Does the same exist within the property management space where I could go to an agency, say, look, I'm interested in what your firm offers. I'd love some details, uh, but then I'd also like to speak to some clients to get a sense of what it's like to work with.
SPEAKER_02:I think at a minimum you need to meet the agent that you'll be working with because the relationship will be primarily email and phone. Yep. Yeah. But it's so much easier if you've met the agent from a landlord's perspective. So you know who's emailing you, you know who you're talking to when issues arise. Because the greater the trust you have in the property manager's integrity uh and and their ability to do the job, the more readily you'll accept their recommendations, even if you don't quite like them. Yeah. Um, so yes, you should meet your property manager before signing, not necessarily just the salesperson that's you know been employed by the company to sign up new managements to to grow the rental book, if you like. Yeah, and the point you make there about meeting previous um uh clients or existing clients of that property manager, absolutely. The best property managers in the industry will have no issues with doing that. They'll gladly put their uh their existing clients across as a uh referee. Yeah, and so they should, right? You should be proud of your achievements. Can I say this on that point, Kieran, that we don't hire a BDM at Harris Partners. I the salary I save in a BDM I put into service delivery of the rent role. And the team grow the rent role through rent referrals from existing clients rather than having a BDM bringing in coal business. And then when the business comes in, we're undermand to be able to handle that new business because we've got to manage our costs and we're carrying a BDM, if that makes sense.
SPEAKER_01:Yeah, yeah. Oh, I mean, there's no better reflection of a business's culture and success than word of mouth referral bringing consistent business, right?
SPEAKER_02:We we just find um that the the business that our existing clients bring us is of a much higher quality than if we do go and hire a BDM um to go out and hunt business cold, and those people don't understand the culture of the business and the way the business operates, and we're short-staffed internally. So we have tried a BDM, but we've gone for no BDM, saved the money and put that back into service delivery of the existing clients who then become the mouthpiece for the organization.
SPEAKER_01:Which again, yeah, great reflection of the business itself. If uh if I was a potential client and I did speak to a property manager and I wanted to get some insight, or I spoke to different clients, if you had to give three examples of things that I could ask about to get a genuine sense of what that property manager's like, do you have any thoughts on what kind of things I could look for?
SPEAKER_02:Yeah, look, focus on um their communication skills. Um, how are they going with their rental arrears? Um, do they let arrears run up? I think you need some sense there of uh their processes for making sure that the uh the rent is paid on time as it should be. And um ask to see uh what their condition reports or their reporting facilities are for your property um whilst that's whilst it's listed with them and under you know under their control. Um there's another segment of landlord that does come into the market um regularly, regardless of what broader trends are, Kieran. And that that is owner occupiers who are going interstate, overseas, um to the regions for a period of time, and they're renting their home out, if you like, for a year or two. Yep. Now it's really, really important. They're not a classic investor. Um, they're not a classic investor who will be on the rent roll for years to come. But you can imagine if you do rent your home out and you come back and it's been trashed, what a disastrous situation that'd be. So in those instances, landlords there don't only want the highest price for the rental return, they want someone that's going to give their property back in the same condition they took it on in.
SPEAKER_01:Yeah, it's uh well, I think too, from a from a business perspective, right? You would want to make sure that all of your clients, regardless of their tenure, are serviced in a way, as you say, you spend on service delivery, so they feel valued, they feel supported. Um, I I remember you uh explaining once before that a good offline that a good property manager is someone who's vigilant about the condition of the property, but also the experience of both the landlord and the tenant, someone who can be balanced on this issue is important.
SPEAKER_02:Um, where ten where landlords fall down with his fair wear and tear, this is not in the same condition that I gave it to the tenant in. Well, there's not an obligation for for the tenant to hand it back to you in the same condition you gave it to them, um, because it's the property subject to fair wear and tear. Yeah. Um, so it's never going to be the same property that you hand it over. Um, but is it worse? Has it deteriorated by more than fair wear and tear? That's the question as a landlord, you need to be asking yourself.
SPEAKER_01:And I think it's a prime example of why you should hire a professional to manage it for you. Someone who knows what the reasonable expectation is, someone who can look after it and has a track record of doing that, uh, and someone whose intention really is to make sure that you leave the transaction feeling like you've been supported and valued.
SPEAKER_02:And and what I would say, it's it's those landlords that are renting out their primary residence to take a job transfer or a sabbatical or whatever it is that they're doing, but they plan on coming back to make that their primary residence. And they're the ones that tend to be most emotional about the state of the property because they knew what their home was and they come back and it's been a tenant of property for two, three years, and it's bumped around and it's knocked around a bit, and it's not the same property that they left behind. But at the end of the day, the tenant doesn't have to um make good on fair wear and tear. It is just fair wear and tear, and it's up to the vet it's up to the landlord to keep the property um condition up kept, not the tenant.
SPEAKER_01:Yeah. No, certainly, and it can be I'm sure it can be much harder. Those people are far more emotional than the you know business transaction investor. My final question for you then, Peter. One of the things that uh I learned in my time in real estate, and you know, you constantly are doing as an active agent is ensuring that you are upskilled across legislation. There's so much going on across the industry, uh, which is good to make sure that people are compliant and doing the right thing. Property management has, as you say, like it's an evolving landscape with tenants' rights increasing, the government active in that space. Um, do you think it's reasonable for an investor to expect that their property manager is going to be up to date, current, you know, doing all their training? And would it be reasonable to expect that that is occurring across the industry to make sure they're compliant with any legislation and changes?
SPEAKER_02:I look, I can't speak for what the quality or landlord experience is across the industry. Um, because rent roles um are shrinking naturally by way of landlords selling out, and as those investment properties sell, they're selling to owner occupiers. I think any real estate principal would be mad to ensure that there's not some uh standard being upheld in their own businesses, uh, that's for sure. Yep. Um so, in terms of the agent being across the legislation to give you an idea of what goes on in this world, um our marketing manager uploaded a rental ad about two months ago, and it was just relaunching the same ad for this property that we used two years ago. Yep. But in the text were the words no pets. Yep. And the Department of Fair Trade rang me and said, that's against legislation. You can't say that now. You can't say that now. Friendly warning, um, but but big brother big data's watching. Yeah. And this is the level of sophistication that the um, you know, the state government are going to to police some of these laws. So as a real estate agent um who owns someone who owns a real estate agency, if you if you don't have your team up to date on legislation, you'll have far bigger problems than than them not being up to legislation in a very short time frame, that's for sure. I was uh I don't know why, I was gobsmacked that that that sort of uh level of detailing was there, but it just goes to show you technology and data. And um, you know, on a different point, completely unrelated. The government are uh, you know, monitoring um the property market from an underquoting perspective with the same technology. They know who's underquoting. Yeah, it's just a matter of how they're gonna deal with it from here.
SPEAKER_01:Well, we've talked a lot about the use of AI in just the the workspace in general, and I think this is a great example of where a fully autonomous uh system that can operate 24-7, control the data, can look for anomalies, can look for keywords that aren't, you know, don't fit the legislation like no pets, and immediately provide a report back to the regulators.
SPEAKER_02:Yeah, that's right. And the regulator was fine. I said, look, it's just an old ad that's you know just been relaunched and we didn't even know the words were buried in there. It's not as though someone, you know, typed the words this week and then put it out there. And she said, I understand, lots of agents have been caught the same way. Remove it, I'll send you an official warning to put you on the record, but all good. And then I just said to the marketing manager, never launch any property ever again with the words no pets.
SPEAKER_01:Yeah, fair enough too.
SPEAKER_02:Yeah.
SPEAKER_01:Look, uh, interesting topic today, Peter. Hopefully our listeners have found some value in there. Uh, and any potential or current investors can use this uh as a bit of an uh opportunity to just stop. And if they haven't invested yet, think about what's involved. But if they currently have a property manager, think about whether they are getting the best value for their time and their money uh for someone who really is looking after their most important asset. So I appreciate you uh coming in and talking about it today. Thanks, Kieran, all the best. All the best, and thanks to everyone for listening to Current Market Insights. We look forward to speaking with you next time.
SPEAKER_00:Thanks for joining us on the current market insights, pop comes up to you.
