Buying an investment property can be an exciting time. You’ve spent time choosing the right property; but have you also thought about who’s the right property manager?
Here are the five traps to avoid.
Trap One | Is the selling agent your best manager?
Whoever sells you the property may not be the right choice to professionally manage the property.
Many investors get swept into the property management department of the selling company without analysing the property management department, personnel and practices. When you are appointing a property manager, ask the tough questions:
- How many years experience has the property manager had in that area?
- What ratio of properties per manager do they have?
- Are there written step by step property management procedures in place?
- How are property managers kept accountable to these procedures?
- How often do property managers receive property management training?
- Can they back-up their service with written customer service standards and a guarantee?
Trap Two | Choosing the cheapest agent
As with most things in life, you get what you pay for, and in property management there is a vast difference amongst the service and quality that is given. This is as varied and different as the levels of fees that are charged.
Too many agencies attract investors with lower fees – then overburden their Property Managers. This leads to poor communication and lack of attention to detail. And that inevitably leads to a continuous procession of new property managers with little dedication to customer service.
At Bourkes, we pride ourselves on having chosen the right staff. And we make sure their property management portfolio is, well, manageable. We take care our property managers have an appropriate amount of properties to handle so they in turn can take care of you.
Trap Three | Inadequate Landlord Insurance
Unfortunately, in property management, even the best tenants can have an unexpected change of circumstances that can result in rent arrears and – in extreme cases – eviction.
Most property investors understand risk and therefore take out landlord insurance as well as building insurance to cover against financial loss like rent default, malicious damage and other tenancy related losses.
Trap Four | Misunderstandings (Or not quite knowing what’s normal)
We find that many first-time investors don’t know quite what to expect from their tenants. What’s normal behaviour – and what’s something that could be a concern?
So here’s a brief guide to some common misunderstandings. Once you understand these, you can stop worrying!
General wear & tear. ‘Wear & Tear’ is normal. It’s an allowance for some bumps and scratches to paintwork, woodwork and other items. The Tenancy Tribunal allows for reasonable wear and tear on things like carpet, vinyl flooring and paintwork.
The rent’s not paid. This, of course, can happen to any landlord. But at Bourkes, we have a zero tolerance approach to tenants falling behind in their payments. We believe that tough early intervention is the key to ensure that rent arrears do not get out of hand. However, every now and then, despite all our best efforts, a tenant may for whatever reasons not pay and the situation heads towards eviction.
Repairs & Maintenance. Over time, things will break down and need repairing. If an item breaks down, it must be repaired within a reasonable time frame. If it cannot be repaired, it must be replaced. Simple as that.
Sometimes a property investor will provide a dishwasher or airconditioner at the start of the tenancy, with the reasoning that the tenant can use it until it breaks down, at which point it will neither be repaired nor replaced. However whatever is supplied MUST be either repaired or replaced. The law’s quite clear on this.
Trap Five | Miscommunication (Too little, or too much?)
Some investors like to hear from their property manager all the time. Others just want uthem to quietly manage their property while they get on with other things. A good property management firm is able to adapt to YOUR wishes, and this is a good question to ask when shopping around. It’s all about being on the same wavelength.