What annoys you about property management?

Ian, although your comment ‘1 property’ was a bit tongue in cheek, would you pay more for a decent PM or one who was only handling say 50 properties not the 150+? How many properties does it take to get say a $3m rent roll which at full comms is slim on margins for the agency?

Does quality property mgmnt come at a cost/price? Should it be reflected in the fees? Should it be on-charged for every bit of service provided (like solicitor/accountants) ie fee for service – pm/arrangement of & % of maintainence/outgoings/property inspections/reports/lease prep/outgoing inspections etc?

There is a good article in the Nov 2011 YIP magazine page 54, "how to whip your property manager into shape"

So why not just manage it yourself? Save money and get things done the way you like.

Skye, Interesting topic. I think property management should be really simple if done properly and what causes a majority of the problems is the economics of the industry.

Because management tends to be an add on to sales in a lot of agencies and because it doesn’t scale that well (one manager can manage X number of properties but you will need to employ more people to grow that number substantially) the pressures to employ junior and inexperienced workers is strong, also there is pressure for skilled people to move into areas of higher pay such as sales. There are plenty of more economic reasons I could list but the whole point is that there is a lot of incentive to load up as many properties as possible on staff and this makes it very difficult to do a good job.

For me the main reasons there is frustration is that the big rocks, the very important tasks aren’t taken care of properly such as:

* Tenant checking > Doing the most basic checking on tenant histories to ensure you are getting quality tenants, do this right and everything else can flow well.
* Proactive management > Sorting out lease changeovers a few months in advance to allow for no vacancies and to find quality new tenants by having opens mid week and the like.
* Proper pricing and marketing of for lease properties
* Constant communication > Between both owners and tenants

There are some good managers out there so don’t be afraid to go looking and change managers if necessary.

The 110% fees for leasing the property to a new tenant. This sucks when you change tenants every 6-12 months.

Ryan McLean
Free eBook "How To Find Positive Cash Flow Property"
http://cashflowinvestor.com.au

3-4 months of rent commission equals the relet fee. Even a month or 2 of vacancy before a relet is more profitable for a REA than full time occupancy. Crunch the numbers yourself on one of your own properties and see how long it takes the REA to earn the equivalent amount of relet fees in commission.

BTW – I should’ve mentioned in my post that the single most prevalent annoying damaging shortcoming of PMs and staff is definately poor communication – not enough feedback to property owners or none at all.

2nd place should go to PMs poor decisions – due to either lack of knowledge or poor attitude.
3 rd place is No.1 again, either buck passing, the mushroom deal or dead silence, because they don’t want you to know about No.2.

Try to find a PM where it’s a clean rent roll, not full of lousy properties which attract problematic tenants – that PM will be too busy trying to deal with dubious tenants who also resent paying rent for poorly maintained properties, and landlords who resent spending money.
Also look for a low number of properties per staff member, as close to 100 as possible, depending on the quality. Remember, in terms of a PMs workload, 100 lousy properties is like 300 good ones. Taking it to the extreme to make the example easy to understand, – If your PM is handling heaps of properties for “slumlords” in a severely socio-economically challenged geographical area, don’t expect the PM to have much time to look after your property.

Good luck
Cheers
thecrest