Beware of Cowboys!
Welcome to our first blog in 2022. Our team hit the ground running during what is traditionally our busiest period. We're enjoying working closely with landlords and tenants with the market looking equal with enough supply to meet our good demand for rental properties.
In my role working within different areas of the business, a large proportion of my role is working with Property Managers and constantly upskilling and training. There’s no debate that the property management industry has seen a lot of changes in the past few years, particularly around legislation and landlord responsibilities. We have found that a lot of new owners buying their first investment property are now automatically coming straight to a property manager, as the experts in the field. Once an owner signs on with us at The Rent Shop, they appreciate the professionalism including the industry knowledge and expertise our Property Managers can offer
- Less stress - you won’t have to deal with late-night emergencies, evictions, chasing down rent, damages, paperwork, having to find contractors, and other tedious and time-consuming tasks.
- More freedom - you can travel anywhere you want without having to worry about your tenants and about the regular inspections. You can live wherever you want and you can invest in other properties.
- More free time - For a property investor, time is money, and your time would be better spent doing other things than micromanaging a property. If you focus on asset management, then you are working on growing your business, if you manage the properties yourself, then you work in it. Not to mention that you will also have more time to spend with your family and friends.
We often hear concerns from Landlords that have brought their business to us about lack of communication from their previous Property Manager in regards to rent not being paid to them, no updates on properties being tenanted, no inspections and lack of knowledge about what maintenance needs to be done at their properties & constantly chasing Property Managers for answers with no replies…the list goes on…This is what has brought me to writing this Blog about the importance of choosing the right Property Management Company for your investment property.
Without giving away too much detail, we recently on-boarded a new client from a company that at face value looked very professional.
However on deeper investigation, we discovered numerous bonds not being lodged for tenancies that had commenced, money being paid in cash by tenants for Bonds but not being lodged with the bond centre, tenants in over 90 days in rent arrears with no formal process of action taken, maintenance issues not been reported to Landlord, Health Homes Compliance breaches, rent ledger inaccuracies. I could write pages and pages of the issues and consequences of negligence, however at the end of the day like any industry, not all Property Managers are the same. Property Management is an art and a science, with experience being a very important ingredient when choosing a Property Management Company. The right management company can make your life as a property owner a delight and - the wrong one, a nightmare. There are many Property Management companies too choose from in New Zealand, some are competitors who we respect, but be aware - not all are created equal.
Finding a good property management company is critical. This isn't an area that you want to choose to skimp on fees. Unfortunately, you pay for what you get. Lower fees often mean lower wages and less training for the staff that work there. This generally leads to a higher turnover rate, which means that your investment property will not benefit from the stability and quality a strong property management team can offer.
If you choose to manage your investment property through a low cost, low fee company, this may seem attractive for cashflow, but chances are the service you receive will be less than satisfactory and lead to some of the issues I outlined earlier and inevitably lead to mismanagement of your properties including heavy exemplary penalties imposed by the Tenancy Tribunal and you as an owner out of pocket.
Here are some questions you need to ask before committing to a property management company.
1) What’s your tenant screening process and how do you find me the best tenant?
2) How quick can you find me the right tenant?
3) What’s the optimal rent I can achieve?
4) Do you have access to reputable & qualified trades people?
5) What happens if my tenant falls into rent arrears?
6) Do you hold my funds in a secure trust account& does that get audited?
7) What happens if my property manager is sick or away on leave?
8) Are you a member of REINZ (Real Estate Institute of NZ)
Beware of the cowboys!! Research, Research, Research- look at google reviews ,look at their website and look at their values. The best property management companies don’t make excuses for their behaviour, are completely transparent with every issue that may arise, and are not hypocritical about what they say they stand for and what they actually stand for. Ask for references from current owners -give your property to the manager that you felt a connection with, the one that listened to your needs and understood you, the one that took the time to appraise the property correctly and give you informed and accurate information and possibly made suggestions of any works that need to be carried out before it is rented.
I get asked all the time about what people should look for when choosing a property management company, and I always tell them the same thing: look for a company that cares about your property as much as you care about your property, as much as I care and have passion for the Company and Industry, I work in. No bias intended!
If you want to enjoy what Professional Property Management Feels like, Frustration Free - Please call Our Business Development Team on 09555 9100
