With Summer on our doorstep, lots of investors and home owners are getting ready for the new year. Leasing activity is at its typical yearly high, and with tenants seeking to relocate to our vibrant coastal communities what better time to talk about the benefits of using a property manager?
Property Management is more about managing a tenancy than it is about managing a property. This makes sense given the tenant is the one living in and caring for the property, whereas the property manager usually visits just a handful of times a year. This being the case, the property manager’s primary role is managing the tenancy agreement as articulated by the terms of a lease and regulated by the Residential Tenancies Act.
The Residential Tenancies Act (the ‘Act’) applies automatically to tenancies longer than three months (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 the Act is essential, as is the ability 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 rely exclusively 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 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’s not worth the risk.
Hopefully you find these benefits evidence enough that engaging a property manager is, for the most part, the way to go.
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