Tight landlords court trouble
Landlords who choose to have a property manager often make the mistake of choosing them based on how low they are willing to drop their fee, how few inspections they will charge for, and how quickly they fill the dwelling with anyone with a pulse.
These criteria are not only fraught with disaster but indicate a landlord who won't want to spend anything on maintenance, if skimping on fees is the highest priority.
Good management is more about systems than how quickly a manager can get someone into the place. After all, it is the market which dictates the rent and tenant, but it is the manager's systems which determine the consistency of income and the smoothness of ownership.
Most managers use off-the- shelf software packages for items such as basic accounting. But if a manager relies solely on these mainly Australian systems, they are ignoring the changing New Zealand environment.
For example, employers now have to cater for staff holidays of four or five weeks a year, and everyone wants leave in January and February when things are busy.
Over the years, there have been shifts as to which system is best for both landlords and property managers.
There is the portfolio system where the allocated property manager does everything, the pod system where mini-teams cluster around managers, and the total team approach where staff specialise in a part of the process. Each has its benefits and its drawbacks, and those considering getting their properties managed should know these before choosing a manager.
Most managers start out on their own and so have no choice but to operate under the portfolio approach as a jack of all trades. They are a one-stop- shop and the only one who knows what is going on with their properties. This is great for owners and tenants of up to about 100 properties while the manager can be contacted relatively easily and is ready with answers.
With more properties, the biggest complaint is: "I can't get a hold of my property manager." By the time a property manager has 150 properties, the wheels start to fall off, and things become extra troublesome when he or she is sick or on holiday. Training someone to help them using the same system can lead to inconsistent standards.
The only way for a bigger management company to satisfy the call-in requirements of landlords and tenants is to take the manager out of the equation and leave them as an overseer. Most requests are usually about wanting to view a property, wanting to sign up for a property, reporting damage or maintenance, and questions about rent.
None of these should ever be delayed if the manager is absent or busy - they should be dealt with immediately.
The property manager can have many people completing tasks for them. He or she can then easily be replaced while taking a break without any interruption to the standard of management.
When looking for a property manager, instead of asking about fees and freebies, prospective landlords should ring into various companies and see how quick and easy it is for prospective tenants to view a property.
This is revealing of whether things with that management company will run smoothly.
Tony Brazier has worked in the property industry for 26 years and owns a real estate company selling and managing property. This column is of a general nature only and readers should seek their own professional advice.