Choosing a property manager

12th March 2015 | By: Dave Smyth

Kerry Fookes

Kerry Fookes

Are you thinking of engaging the services of a professional property manager? Here’s a quick guide from Kerry Fookes, a Christchurch Property Manager, based in Rolleston, Christchurch

There’s certainly a lot of choice in Christchurch when it comes to choosing a property management company and they are not all created equal. Do I use an independent property manager or one owned by a real estate company? What fees will I be charged for their services and what experience and/or qualifications do they have?

Property management companies should be offering total transparency with their management agreement and all of their fees, which should be freely published on their website for prospective owners.

When looking at engaging a property management company, your first point of contact should be the property manager who will be dealing with the management of your properties, not the business owner, not the manager and certainly not a ‘business development manager’, who is simply a salesperson engaged to sign up new owners.

Find out how long this person has been working for their company. Question them on their experience and/or qualifications.   Ask them for a copy of their standard management agreement, including full disclosure of all the fees they will be charging. How do you cancel the contract? Check carefully, as many companies will make you sign a 1 year contract with break fees that apply if you wish to cancel early.

The overall fees vary widely in the industry but the standard management fee is around 8% of rents + GST. I would recommend you use a business charging a flat rate fee for their services so you know exactly what your costs will be for the management of your investments. Remember too, that you can negotiate a lower fee if you have multiple rental properties.

A typical company will charge additional fees for all or many of the following: advertising, credit checks, inspections, 7-10% +GST of all repairs and maintenance invoices, lease renewal and monthly administration.

We recently did a comparison for a client, comparing the 6.95% +GST flat rate fee charged by an independent company versus the total fees charged by a local real estate office. We found that with their additional fees added onto their standard base fee of 8% + GST, the total fees charged by this company would come in at over 9.5% + GST.

Most companies charge their tenants a letting fee of one week’s rent plus GST. With the average Christchurch rent now sitting at $450 pw, this is a fairly substantial sum. This is potentially a deterrent to prospective tenants, by effectively adding another week’s rent onto their total move in costs.

You will need to decide whether to use an independent property manager, as opposed to a real estate owned property management company. Independent property managers are not owned by real estate agents, so do not sell property and are solely focused on the day to day running of your investments.

Remember, a real estate company’s core business is not property management but in selling properties. They hope to be able to realise their sales commission, an average of $18,000 +GST if and when you do decide to sell your property.

I was recently told by a real estate agent from one of the larger management companies (who have over 600 properties under management) that their company was operating at 80-100 properties per property manager.   I would imagine that it would be difficult to provide a good service and strong communication to their owners, with their property managers individually managing so many properties.

With a smaller company you will typically have a single point of contact for everything to do with your property. With their property managers managing fewer properties; they will have more time for you and your investments.

Find out what the fees are for arranging repairs and maintenance. Is this included in their flat rate fee or will they be taking an additional 7-10% +GST of every invoice charged? What is their process for getting quotes and are you able to stipulate your own spending limits? You should have the right to be able to use your own preferred tradespeople if you wish.

Ask what process the company uses for reviewing their rents. They should be conducting regular rent reviews; 6 monthly for a periodic lease and at the time of lease renewal for a fixed term.

It is not always best to be charging above market rent for your property either. It is a better idea to charge just on or under this to attract a better selection of applicants, potentially helping to find good reliable long term tenants. This is always preferable than in chasing a maximum return, where you could easily end up with vacancies between leases.

If you are considering engaging the services of a property manager or simply need some advice regarding your property investments, then feel free to get in touch with Kerry Fookes from Selwyn Property Management or visit our website at

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