How to Choose the Right Property Manager

So, you’ve just purchased your property. You’re over the moon that you’ve finally made the leap into the property market and can now start reaping the rewards. Well, unfortunately the hard work is not over. The number one, most critical decision outside of when to buy and sell a property is choosing a suitable property manager.

A property manager’s role is broad and can cover anything from choosing a tenant, collecting rent, carrying out repairs, and providing sensible advice on management decisions. A good property manager will do this and more, covering all of the little, but very important things as well. These should include, but are not limited to:

• Find prospective tenants
• Check a potential tenant’s criminal record
• Prepare the lease documentation
• Advertising
• Maintenance
• Take initiative with undertaking repairs under a nominated dollar value
• Organise bond documentation
• Pay authorised account and statutory charges
• Undertake regular property inspections and provide good feedback back to the landlord
• Check a potential tenant’s credit history
• Give you up to date advice on rentals and the property market
• Administer rent reviews
• Pass on the rent payments to you promptly
• Provide regular statements
• Handle arrears

So, how do you choose a good property manager? There are a number of ways that good property managers can be found. It’s rare that the best one for you will be the buyer’s agent. It’s much more common to find good property managers through word of mouth, looking through investment forums etc. Here are some tips for finding a good property manager:

• Always contact the property manager’s current and previous clients to get a bit of perspective on his or her character
• Have a clear contract set up with your property manager which outlines all the services that will be provided
• Generally, try and steer clear of really cheap property managers as it’s likely the services will be of a much lower quality and will end up costing you more money in the long-run
• Try and gauge the reputation of the company that the property manager works for by looking on the internet and contacting other professionals in the industry
• Find a property manager that specialised in the types of properties that you are planning on buying

Here are some other articles that you might be interested in:

 

How to Set Up a US Bank Account

Advice on American Real Estate Agents

American Real Estate Listing System

If you have any questions or comments feel free to email us at streamlineinvesting@gmail.com

 

Disclosure: The article is not to be taken as investment advice and the views expressed are opinions only. Readers should seek advice from someone who claims to be qualified before considering allocating capital in any investment.

 

How to Find a Buyer's Agent

Finding a good buyer's agent and property manager can be the difference between having a very successful and prosperous investing experience, compared to having a horror one.

A buyer's agent will be your point of contact when purchasing a property in the US, they will put offers in on your behalf and also keep a lookout for properties that you might be interested in. Because we are purchasing a property on the other side of the world, in an area we have not even visited before, let alone researched significantly, it means we are putting a lot of trust into the buyer's agent to find us a property that suits us, and give us an honest price guide on the property. Because an agent works on commission, i.e. they make money by selling houses, it can be easy to believe that an agent does not have your best interest at heart and they simply just want to make the sale and collect their cheque.

Of course in my opinion I believe the agent should do everything they can to be honest and trustworthy to the seller, especially in our case. For our first property, we were simply trying it out to see if investing in the US worked well for us, if it did, then there is no reason why we would not be investing significantly more into the US property market. So by being dishonest and collecting a smaller commission, they are potentially missing out on building a solid relationship with us which will benefit both of us financially in the long term. We were lucky that the buyer's agent we ended up going with was on the same line of thought with regards to this. She is initially from Australia, and now lives in Fort Myers, Florida, so being initially from Australia, she is able to better understand our concerns with regards to investing overseas, and is also able to decipher the jargon that is sometimes used in the US and relate it back to Australian terms that we understand better.

While we were looking at houses to purchase, we would have contacted probably around a dozen buyer's agents in the Lee County area, and just about all of them were very responsive and seemed very eager to help us with regards to purchase a property, but I guess we just did not feel as comfortable as we did with the buyer's agent that we ended up going with. It is important to note that the system in the US is different to Australia with regards to buying a property. A property is not simply listed with a single real estate agency and sold through them; it is listed on a database, and gives all real estate agents the ability to see all the properties on the market, so it is not like you are missing out on a good property by going with one particular agent. That being said, we were talking with one agent, who claimed she had information on properties that were about to go on to the market, and what price they were looking at. This way, you could put an offer on it instantly as it went on, and get it before everyone else saw it. I have a feeling this was not quite ethical and perhaps even illegal; anyway we did not feel comfortable working with this person.

Building trust with your buyer's agent is another very important aspect of the process of purchasing a US property. You are not going to feel comfortable sending over $50,000 (or more) of your hard earned money into the US if you are not confident you are getting value for money. You want to make sure you are purchasing a good quality house and not getting something that is just going to continue to drain your money. The main way we were able to build trust with our agent was just by constant communication with her, and by continuously asking her questions just to make sure she knows what she is talking about. Another good idea would be to talk to other people who your agent is currently working with, we did not do this as we believed to be confident enough with her to not need to do this.

The process we used to find a house for us was fairly simple, our agent set us up to receive notifications of new houses that met a criteria on the database of properties. Basically all the houses for sale are listed on the database, and by entering certain criteria to find a house you are looking for, such as price, size, location etc. You are sent a list of all the current houses that match your criteria. When we got the list, normally there would be about 40 new houses or so a week, we just sent our agent a list, normally of about 10 or so properties that we thought looked good on the photos. Our agent with local information and being able to see the properties for a property inspection would then review the properties and provide her own opinion. One of the reasons we were comfortable with our agent was that she would reject 90% of the properties we suggested, which lead us to believe that she was not simply in it for the commission, and that she was looking out for our best interests. Our agent would also look at houses herself and send us (and her other customers) a list of all the properties with her review of them.

The last aspect that made us comfortable with investing with this agent, was that she too is a property investor in the area, and quite often with the properties she saw as good value, she would say that we should put an offer on the property, and if we didn't then she would put an offer on the place herself. So if an experienced investor sees a property as a good investment, then it is a good sign that it would be a good place to put our money.

So as you can see finding a good buyer's agent is very important, they are your representative on the ground and you need to work together to make this successful. At the end of the day, you need to find a good, honest, genuine and trustworthy agent that you feel comfortable working with; otherwise the process will just never work out.

If you would like more information and the contact details of our property manager, or have any other questions you wish to ask us, feel free to email us at streamlineinvesting@gmail.com

 

 

 

 

US Banking Fiasco - Learn From Our Mistakes

If you want to invest in the US property market then one of your first challenges will be to set up a US bank account. This step is not 100% required to purchase your first property as you can use an Escrow account to deposit the purchase price of your property. This is not something that you can use for rent collection and is simply a way to transfer money from the buyer to the seller. In theory (and this is what we did), you can hold off opening a bank account till you have the first property secured and tenanted out. It will then be required to either visit the US or get a lawyer to open a bank account for you.

To collect rent, you can use your property manager to collect this money in the short-term. You'd want to have build up a very good relationship with your property manager before taking this step.  However, the preference is to be in full control of your money and being being able to look at your bank balance whenever you want. If you're thinking about opening a bank account without actually visiting America then forget about it! Here is our story:

Without actually visiting the US we knew it would be difficult to set up a bank account from overseas, what we found was that it was near impossible (well sort of). You can set up a bank account with HSBC from Australia, however there is a $200 fee associated with this and you need to have at least $200,000 in your bank account. There are ways around this which we will cover in another blog post. Every other bank requires you to be present in a branch to open a bank account. This is due to the Patriot Act which came into effect shortly after the September 11 terrorist attacks in 2001. 

Our US property manager provided a contact at Fifth Third Bank. The contact (let's call him Bill) said that it did not matter that we were not able to visit a branch and that we would be able to open a US bank account from overseas. It was all looking very positive, we were finally going to have a bank account in our company's name and it would take us one step closer to being able to purchase a property in the US. We corresponded with Bill numerous times via email, provided him with certified copies of our passports, mother's maiden names etc., only to be told, only hours after sending him all the information, that he is no longer able to open up bank accounts for people based overseas. We were afraid that we may have become victims of identity theft but as it turns out,  nothing bad happened. It was definitely a frustrating experience to be so close to something only to have it all fall away at the end. 


A couple months later, we were talking with a property manager from Century 21 who also said she had a contact for us to set up a bank account (let's call her Sue). Initially we thought it would be the same as what happened with every other bank, that we would simply not be allowed to since we were based overseas. This time we were dealing with BB&T Bank. This experience was beginning to be a lot more positive than the other banks we had asked, we were actually able to start up an account! We even received a Debit Card with the company's name on it! (I still have it in my wallet, even though it is useless, as a memento). 

It did not cost us anything to set up the account (apart from stamps to post information to the US) and we had everything ready to go. We had our US bank account set up in our company's name, had internet access so we were able to log in and look at our balance and everything was going well. To avoid the minimum monthly fee, we had to maintain $1,500 US in the account, which was not a problem as we were intending to hold all of our money from the property in the bank account.


Then out of the blue, we received a letter from BB&T (dated 3 weeks from the date we received it). It was to inform us that our bank account would be closed and that we had 14 days from the issue of the letter to remove our money from the account or they would send us a cheque of the remaining balance. Immediately after receiving the letter we tried to log in to the account and realised it had been closed. We received no email, phone call or text from the bank prior to this 3 week old letter. It took over another 4 weeks to get the cheque for the $1,500 balance of the closed account.


Unfortunately this story doesn't end here, we then had to try and cash the cheque. The cheque was made out in the bank account's name, 'Streamline Investing LLC', but we didn't have an Australian bank account in that name. So here we had a cheque which was basically just a piece of paper, worthless to us. Our banks in Australia would not cash the cheque into our personal accounts despite being able to provide evidence that we were the owners/directors of the company. Eventually we realised we had to open up a business account in Australia for the sole purpose of being able to cash this cheque. Just about all of the banks required us to set up a business in Australia with the same name, we were not able to set up a business bank account for a US company. 

So we went through the process of getting an ABN and TFN (we set up a partnership, filled out the form online, both numbers were free to receive, ABN was received instantly and the TFN took a couple weeks to arrive). Unfortunately that was still not enough and we had to register our business name with the Department of Fair Trading, this costs $160 for 3 years registration in NSW. Before registering our business name, we managed to find a bank that would open a business account for us in our US company's name. Westpac provided us this service, and we were finally able to open an account to cash the cheque!

Overall, this was a very frustrating experience but one that taught us a number of lessons. This is the benefit of doing things yourself and not getting one of those 'ready-made deals' that are becoming so popular nowadays. 

How to Find The Best US Real Estate Agent

One of the most important decisions for an overseas investor looking to enter the US real estate market is to identify a good real estate agent. This is not something that will happen overnight, but it will happen.

I'd recommend to contact as many agents as possible (you can find them through sites like Trulia and Zillow). Get them to sign you up to the MLS and Listingbook services. Ask them lots of questions because it's always a good idea to get an answer from a completely different perspective.

So in summary:

• Contact agents via sites like Trulia and Zillow
• Get them to sign you up to the  MLS and Listingbook services
• Ask them as many questions as you can
• Build a good rapport with them
• Find out if they do property management (it's a good idea to find an agent who can look after the whole process for you)

If you would like to get our agent's contact details or have any questions, then contact us.