Property Managers… What Value do they add?

Hi Smoros

I have never actually used a PM – we manage ours ourselves which has never thrown up any problems. From being on the other side of the fence (we don’t own a PPOR) as a renter I don’t think they are worth anything.

In 4 yrs we have had not a single inspection, so it’s hard to see how they are protecting the investor. I can check the bank balance as well as they can for rental payments, I can call a tradesman for repairs etc etc etc.

I may be biased against them but I think the only advantage thye may offer is in finding tenants.

polar bear,
how does your tenant pay u each month?
also, say i terminate my PM now, can i still get the tenant to stay on?

***********************

We collect rent via bank account. We set up an account specifically for the rent and the tenants get a deposit book. We can check online anytine whether it is paid or not.

I don’t see any problems with terminating the PM – just keep your tenant informed.

I work fairly long hours and have 6 IP’s on the go and don’t find it a drain on my time at all. They contact me if they have an issue – issue gets fixed by tradesman. A few phone calls a few minutes, pay the bill.

Even searching for new tenants isn’t too bad get them all there within a certain time window and ask them to fill in an application if necessary – a few reference checks and sign the lease.

This is interesting because I used to think like many of the readers who have posted above. When I bought my first few investment properties about 30 years ago I thought I could collect the rental as well as anyone, but I have changed my mind over the years.

If all your PM does is collect the rents then you are right, you probably could do it yourself, but if your property manager adds value, then that’s a different matter. Especially when their fees are tax deductible.

Now I must admit I am biased….

Pamela my wife is a director of Metropole Property Management, Melbourne’s best property management company. Today alone she picked up 6 new rental properties from landlords who were unhappy with their PM.

But that’s not the main reason I disagree with most of you.

Recently I heard someone say that he could have either made himself a sandwich at home (cost about $1) or he could go to Subway and have them make him a great sandwich for $5. While he makes great sandwiches himslef he chooses to go to Subway becuase he hates the preparation before and the cleaning up afterwards.

Once you own a few properties you will find you can do better things with your time than collecting rentals.

Other reasons I think you should use a PM include:-
1. A number of surveys have shown that people who manage their property on average achieve a lower rental.
2. Tenant Selection – as a landlord you do not have access to the National Tenancy Database to do tenancy and credit checks on prospective tenants.
3. Are you able to prepare the lease documentation in a way that will stand the test in the tenancy tribunal? Do you know the special clauses that you can legally add that protect the landlord. Pam has 5 of them.
4. Have you got the forms and the knowledge to handle bond payments correctly.
5. Dispute resolution with tenants – this is hard to do yourself.
6. Appearances at the Tenancy tribunal – again hard to do if you don’t know the legislation.
7. Repairs and maintenance – even new properties have problems and having good reliable trades people is critical.
8. Arrears control – most landlords have real problems with this. Pam issues a notice to vacate at 14 days (after 3 letters). Boy does this make them pay up.
9. Do you have the negotiation skills and the market knowledge to minimise vacancies
10. By the way private individuals cannot advertise on sites like realestate.com.au which is the biggest source of tenants for most agencies. Doing it yourself means you could miss out on a heap of good prospects.

If you want to download an interesting report outlining 12 probing questions to ask your PM click on this link.
http://www.metropole.com.au/reports/bonus_report2.htm

Michael Yardney
Metropole Properties
http://www.metropole.com.au

There are some shockers out there as evidenced by the stories here. But when you find a good one and should something go wrong you will realise why you have one.

Especially if the property is not conveniently located nearby.

Sometimes it is best to pay an expert that works well with you. The difficulty is finding one! i think personal referrals are best for this sort of thing if possible.

Simon Macks
Mortgage Broker
[email protected]
0425 228 985

Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.