Property Management is more about managing the tenancy than it is about managing the property. This is apparent now, more than ever, with the legislation introduced to address residential tenancies affected by the COVID-19 pandemic, and 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. And 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 ever evolving legislation 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 themselves a property, owners without access to the favoured websites will find it difficult to attract a tenant in the first place.
There is great value in having a property manager 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, something that in current times is almost encouraged by State and Federal Governments. Acting at arm’s length affords the property manager a compassionate “just business” 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 and it has been my experience that with all things considered, it is not worth the risk.
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