With Christmas on our doorstep investors and home owners are getting prepared for the new year, what better time to talk about the benefits of using a property manager. Property management is more about managing the tenancy than it is about managing the property. This makes sense given the tenant is the one living in and caring for the property, whereas the property manager usually visits it a handful of times per year.
This being the case, the property manager’s primary role is managing the tenancy agreement as expressed by the terms of a lease and regulated by the Residential Tenancies Act.
For tenancies longer than three months, the Residential Tenancies Act (the ‘Act’) applies automatically (whether there is a formal lease or not) and it is madness not to utilise the services of a competent property manager for a rented property.
Management fees are not exorbitant and are normally tax deductible. For the sake of saving a relatively small portion of the rental income in management fees, the risks of self management are significant.
A sound working knowledge of the Act is essential, as is the capacity to properly reference check a prospective tenant. But, perhaps most importantly, much of the risk and responsibility attached to the management process is borne by the managing agent. And now that almost all prospective tenants are exclusively reliant on the internet to find a property, owners without access to the favoured websites find it difficult to attract a tenant in the first place.
There is great value in having an agent act at ‘arm’s length’. Many a self managing landlord has fallen into the trap of sympathising with their defaulting tenant and allowing rent arrears to build up over time. Acting at arm’s length affords the property manager a ‘no excuses’ approach to rent payments and the lease agreement more broadly.
Self management often works well and for extended periods, but when a tenancy goes wrong, it is costly and stressful. It has been my experience that with all things considered, it is not worth the risk.
Hopefully you find some of these benefits evidence enough that engaging a property manager is, for the most part, the way to go. Be well, stay safe and have a very Merry Christmas!
By Hayden Groves – REIWA President & dG Principal