Selecting a Property Manager? Avoid these 4 Mistakes Landlords Make

When you’re selecting a property manager, learn from the mistakes other landlords have made. Then you can find the ideal property management company that supports a profitable rental property investment.

There are over 300 Perth property managers, and selecting a property manager can be daunting.

While working with a property management company should make things easier, there are firms out there that do the exact opposite.

I’ve been investing in rental properties for a while now. As with most investors, I want to keep my full-time job and a passive income stream through real estate. To do this, I hired a property management company to manage day-to-day responsibilities, tenants, and property maintenance (then eventually started one myself).

I’ve worked with my fair share of companies that have made property management more difficult, costly, and stressful. But by seeing what some do right and others do wrong, I quickly figured out what to look for when choosing a property management company.

What to Look for When Selecting a Property Manager

I realised that part of the reason I ended up with bad property managers is that I wasn’t doing enough due diligence on them before signing a contract.

I would have avoided the mistakes I made with previous property management companies if I:

  • asked them the right questions during the interview.
  • researched to verify their claims.
  • focused on quality service over lower costs.
  • read everything written in the contract and asked for clarification in writing about any hazy points.

So, I’d like to share with you the top four mistakes landlords make when choosing their property management company. That way, you avoid any costly errors and end up with a property manager that protects your investment and your peace of mind.

What are these four biggest pitfalls of property manager selection? Let’s take a look.

Not Interviewing Property Managers Properly


How much will you charge per month?

How will we stay in touch?

Will you address concerns from me and the tenants?

Will you address concerns from me and the tenants?

Do you have SOPs in place for tenant screening, selection, property maintenance, rent collection, and eviction processes?


What is your fee structure concerning your services?

How frequently and via which channels would you communicate with me?

Do you have an online portal for storing documents?

Who is my go-to contact person? What happens if they’re not available?

Is your organisation structured by department or portfolio?

How long has your organisation been operating?

In what locations?

Run me through each of the SOPs you have for tenant screening, selection, property maintenance, rent collection, and eviction process.


They might charge 10% of your rental income per month, but leave out additional “hidden” fees for other services.

They might say that they’ll keep you in the loop whenever an issue arises, but what does that really mean?

You also want to know that they’ll report regularly about property performance.

They might boast of a “robust customer service,” however, that service depends on their organisational structure – having teams that deal with all issues categorically or having one manager per portfolio.

They might say “40 years” but refer to four people with ten years of experience – spread out across unrelated locations.

They might confirm such processes, but you need to know how exactly they carry out their responsibilities to see if they’re a match for the way you want to run your rental business.

By interviewing your prospective property managers in detail like this, you will have a holistic understanding of the services they provide to help manage your investments. Thus, minimising the chance of nasty surprises later on.

Not Researching Potential Property Managers

No matter how convincing the prospective property management company is, you shouldn’t accept everything they tell you as truth. You need to perform due diligence in verifying what they say by conducting a proper background check online.

Here are four ways to research a property management company:

  • Look at Google Reviews: Plug their name into Google and run a search for all positive and negative reviews about the company. Try to find unbiased reviews as much as possible.
  • Scan Review Sites: You can also check websites such as PropertyChat and ProductReview, where you’ll see members complaining or giving praise to property management companies.
  • Review their Portfolio: Ask for a company portfolio that shows their experiences – including references for you to check. See if they have enough knowledge and expertise to manage properties in your specific location.
  • Talk to Past Clients: In reviewing their portfolio, you can also contact their past clients to ask about their experience with the particular company. Chances are, you’ll receive the same kind of service as they did.

If you can retrieve reviews from both the perspective of the tenants and the landlord, you’ll see both sides of the property management equation.

Not Selecting the Best Value Property Manager

A capable property management company will increase your profitability by improving your marketing tactics and reducing tenant turnover rates. A cheap one, however, could do the opposite.

That’s not to say all “cheap” property managers are bad – it just means that they have less resources to dedicate to managing your rentals. How many hours a month are they going to spend on your properties if they’re only earning a minimal fee?

Instead of going for the cheapest option, you should focus on the balance between value and cost, ensuring that the property management company you choose can provide the service coverage you need.

You’d want to prioritise the companies that can offer two things:

  • Comprehensive Services: Some companies offer select services only. For example, one that provides leasing services won’t help you find the right tenants – they’ll prioritise minimising vacancy and leave you to deal with difficult tenants.

Select services may sound cost-effective, but you’ll miss out on a holistic management service that others can offer you, even if it’ll cost a bit more. A comprehensive property management company is your one-stop-shop for all things related to property management: marketing, screening tenants, maintaining the properties, handling evictions – the list goes on.

  • Modern Perks: You also want to ensure that the property management company is up-to-date and staying competitive in modern times. Outdated ones might be more affordable, but won’t have crucial, modern perks such as a communication portal or online rent payment options.

Their website alone can tell you a lot about them. If their page is old and offers limited information, they might be stuck in their ways and haven’t adopted new technology in recent years.

Understand what you’re paying for and ensure that the company’s services align with your needs.

Whether their fee structure is a flat rate fee or a percentage-based one, you want to hire a company that does not sacrifice quality service just to keep prices low.

Not Scrutinising the Property Management Contract Fine Print

Lastly, one of the biggest mistakes is skipping over the management contract fine print.

You assumed that everything was agreed upon. However, just like with any legal document, you need to confirm that all your expectations and verbal agreements are apparent in the property management agreement – most especially in the fine print.

Here are some vital details to check for when reviewing a property management contract:

  • Missing Details: Ensure that all services are included in the agreement you paid for. To illustrate, they may charge a 10% monthly management fee, but an additional charge for things like the inspection fee.
  • Sales Fees: Check the fee they’ll require in the event of you selling the property, as the majority of property management companies will charge for owner turnovers. You should know their policies to factor in your budgeting if you sell to another rental investor who wants a turnkey property.
  • Insurance Fees: The company should handle insurance claims without any additional cost. Some may charge an hourly rate for coordinating with insurance companies, but the ideal property management company won’t.
  • Eviction Fees: See if they’ll charge you extra for managing eviction processes. Good companies won’t charge extra, as they should be confident in their tenant screening process in the first place – and therefore able to minimise any need for evictions.
  • Authority of the Broker: Check how they’ll charge for any repairs, renovations, or maintenance. Some will automatically conduct a repair if the expense is below a certain amount, while some won’t do anything until you approve the project. If you’re paying the bills, you better go with the latter approach. You’ll also have more control over which situation truly needs a fix.
  • Termination Fees: You also need to see any termination fees, should you decide to cut the contract. A company that will charge you for walking away might not be that confident in its ability to keep your business.

The bottom line is to know what you’re signing up for before committing.

Select the Right Property Manager for Property Investing Success

As you may have noticed, these property manager selection mistakes revolve around one common theme: the lack of knowledge and information before agreeing to hand over the keys to your rental kingdom.

Instead, you need to ask the right questions, do background checks, evaluate their services, and comb through the fine print before signing a property management contract.

Doing so will help you achieve the sole purpose of a property management company – to have a more efficient and hands-off approach to managing your rental assets.

For information or advice on how you can choose the right property management company for your Perth rental, reach out to the Benchmark team.