For some it comes down to dollars and cents, for most it’s whether they like the actual property manager they are dealing with and some people think the quality of the routine inspection maketh the value. COVID-19 has presented an opportunity for the property management industry, have they taken it?
The reason you would pay for a property manager to manage your property is because they are expert in the tenancy legislation and you’re not. If you would like to be an expert in tenancy legislation you can stop reading this article now and move to the Residential Tenancies Act for the state your rental property is in, The Residential Tenancy Regulations for that same state and the COVID-19 Emergency Response Act for the same state which has just temporarily alternated the legislation for the first said act. Good luck and good luck if you have two investment properties in two different states.
If you don’t want to be an expert as I am not for my self managed super fund, nor the Family Law Act or even how to service my car, then I hope you are starting to see where to look for the value in your property manager.
It goes without saying that time is also a commodity here, as it is for me with the above list. But it can be challenging to equate time to money and for some reason, people seem to undervalue other people’s time if they are paying for it.
A property manager who can navigate their way through the tenancy legislation to keep you in the box seat for options and choice about your investment property whilst there is a tenant living there, is worth the amount you pay them. By the way, if you look at the amount you pay them and compare it to the accountant for a self-managed super fund, the lawyer and the mechanic, they are still probably the cheapest. When did they last put their fees up?
Unlike their sales counterparts, property managers are not historically exceptional at telling you how good they are, what they have achieved or the fact they leased your property for a record price without vacancy. I sense this could be the problem. If landlords don’t know what to expect, they can only measure the performance of the property manager on the output’s they receive. These are typically 80’s looking ‘statements’ once a month and a killer routine inspection report a couple of times in a year.
To really test out if you have an industry-best property manager working for you, I implore you to look beyond the routine inspection report and daggy statements and talk to them about what they know.
What is the highest rent I can achieve for my location? What would I have to do to my property to get it to that level of rent? What is the most sought after rental property in my location; is it a two-bedroom unit or a three-bedroom house? What rent do they both achieve? What is the difference between landlord insurance and rent default insurance? Do I need both? Do I have both? Why not?
Be prepared, this conversation could go to nerd-like levels. Seriously though, their knowledge of tenancy legislation will keep you as safe as the law will allow you to be and their local area knowledge will help you boost your asset whichever way you are looking at it. Compliance is the other factor which is definitely worth paying for when there is so much legislation governing your investment, which actually has people living it… huge risk!
Covid-19 is a great test for how your property manager is doing. Putting aside the current rent negotiation, for which the federal government could not achieve collaboration with the state governments and now rests with tenants, property managers and landlords, speak with your property manager about the reform. What does this mean for you, do they know their stuff? Can they give you any advice for how to pivot with your property investment right now and which laws have changed that affect the landlord?
Ray White has held daily webinars nationally and by state to keep property managers at the front of legislation and tenancy reform change throughout March and April. We have just broadcast a national landlord information evening to support the landlords in our network further for guidance on what is available to them and the best way to navigate through this pandemic, here is the link if you would like to watch this too.
Emily Sim – CEO Property Management