I hear this statement all the time. “I am happy with my property manager because they are low maintenance”. That’s great, but ARE THEY DOING THEIR JOB or are you in for a great surprise one day?
Sure, you are busy. We all are. As long as the rent keeps coming in to cover the mortgage, all is sweet in the world of property investing…. Or is it?
Let me ask you these simple yes/no questions :-
1. Has your property manager spoken to you in the last year?
2. Do they return your emails within a day? Two?
3. Do you know where you stand with Smoke Alarm compliance?
4. Do you think your property manager cares if you have landlord insurance?
5. Do you know how your current rent compares with similar properties?
6. Was your rent increased in the last year or two OR was there a discussion about it?
7. Do you know what your obligations are as a landlord and what to expect from your tenant?
8. Have you seen evidence (eg, reports comments, recommendations) of a routine inspection in the last 12 months?
9. Have you seen photos from the inspection?
10. Has your property manager discussed strategies to help keep your property in good condition?
11. Do they look after your tenants? Or perhaps they don’t have time to address their issues/repairs and your good tenants get up and leave costing thousands of dollars?
12. Do you feel valued as a customer and do you think your property manager deserves the money they keep of you each month?
If your answered no to most of these, then you are not alone! It is a common theme across the industry and also my experience as a customer over many years with some of my property managers… NOT ALL!
Let’s face it… As with every service provider, especially the “commodity” ones like utilities, you generally expect the service to be up and running; and as long as it does, you are happy. You only remember these providers when there is an issue or an outage. Take electricity for example. No one notices what a great job the electricity companies are doing until there is an outage.
The difference of course between property management and electricity, is that you get to experience electricity working every day, but can you say the same for your property management service? Now take it from me… PROPERTY MANAGEMENT IS HARD WORK. All you do is chase people and try to keep up with the legislative requirements.
You chase tenants. You chase tradespeople. You chase smoke alarm compliance people… You chase strata managers and desperately trying to fill a vacancy with the best possible tenant! And then, there are the endless compliance policies and procedures. I doubt there is a more highly regulated industry in Australia than the Real Estate Industry! It is hard work and the more properties you manage, the harder it gets… especially if you are not very good with technology and you don’t have streamlined processes. It is not uncommon for property managers to manage 200, 250 or 300+ properties with little help! And the harder it gets, the less the time left to communicate, or even worse… to follow through with inspections, to complete proper rent reviews, to follow through with repairs, to strategise with the owner for the future, let alone to care for the tenants’ needs….
While that explains why one may not be hearing from their property manager, we are still talking about your most expensive asset, the vehicle that will help you retire with some security but also let’s not forget about the huge mortgage today and a property that needs to continue to be tenanted and to grow in value.
And whilst it is entirely possible your property manager is doing a fantastic job (except perhaps for communicating), it is also entirely possible – and very common – that they are struggling to manage their portfolio, they are constantly overworked and their heart is no longer on the job!
If it is the latter (like it has been on a couple of occasions with my own properties), then the following scenarios may be real for you RIGHT NOW…
- Your property manager is either not inspecting your property OR they do but they are not diligent, thorough and take no evidence. They don’t like to rock the boat so your property slowly deteriorates and when the tenant moves out OR you decide to see it with your own eyes you realise that you are up for thousands of dollars to make your property presentable again!
- Your property manager doesn’t have the right systems to track when rent reviews are done which means that right now your rent could be $10, $20, $50 dollars per week less to what it should have been! That would be $520, $1040 or $2600 less per year in your pocket! Or, as it was with one of our recent clients, $5200 per year!
- Your property manager doesn’t have a system to track when smoke compliance tests are due, meaning that if there was a fire in your property today, not only your tenant’s life may be in danger but also you may be personally at risk of negligence claims and potential litigation.
- Your property manager don’t have time to follow up your tenant requests. Which means that, going into an oversupplied tough market where good tenants are worth their weight in gold, your tenants pack up and leave, costing you thousands of dollars in lost rent, advertising costs and leasing fees!
And the list goes on, but I will stop there. The above are not some wild scenarios that may never happen. They happen every day. They happened to me which is one of the reasons I decided to start my business so that I can manage my own properties. As I am writing this blog, I know that my first and most favourite of my properties (one that I lived in and renovated a few years ago), is up for 15K worth of repairs when the current tenants moves out!
So my last question to you is “are you still convinced your property manager is great because you never hear from them”???
Who we are:
NextGen Property Mgmt (www.nextgenpm.com.au) is a boutique Real Estate licensed agency that specialises in property management. NextGen Property Mgmt does NOT has a sales team unlike most other agencies that specialise in Sales and have Property Management as a side business.
Our area of focus is residential property and we operate in Inner and South West Sydney, as well as St George.
NextGen was created from its infancy to cater for investors as it was founded by investors who quickly realised that in a highly regulated industry like Real Estate – competence, expertise, care and service by property managers varies greatly.
As an investor, you need to have trust for and feel valued by your property manager. You need to know that your property is being looked after with minimal disruption and you are getting maximum return for your investment. At NextGen we understand that because we are investors living busy lives ourselves, so our promise to you is that you will no longer have to worry about your most valued asset because we will make sure to take care of it as if it is our own.