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In the past this column has been accused of being too hard on landlords and, to be fair, when things go wrong in rental units it’s often the man or woman in the middle who’s at fault.
“I own two rental apartments and have been badly let down by both property managers,” says Nibbles 55 in the Flat Chat Forum. “Their main flaws were non-existent or inadequate inspections, poorly executed repairs, and failure to pass on legitimate tenant concerns.”
It’s really hard to know how prospective managers will perform in practice, adds Nibbles who says a ‘bad management’ register would be a huge benefit to landlords. “Otherwise it’s very much a lucky dip.”
To be fair, some rental agents do a fine job, operating as a conduit between tenants and landlords, maintaining the right level of separation and communication for both parties. But do we need rental agents at all?
“I fired all my managers and went to self managing ,” Austman writes. “It’s much easier to do than I ever imagined.”
Email, SMS, mobile phones, internet banking and on-line access to forms make it very easy, he says, “apart from when the tenancy changes.”
He adds that the tenants like it and you can develop a relationship with them, although you have to deal with their issues promptly and properly.
Is self-management better for landlords and tenants? Read the original post in full and several readers’ responses here in the Forum.
The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers.
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On the basis of my personal experiences with the Rental Agents/Property Managers who oversee the rental of Units in my Plan I too am critical; refer my original post on this topic where I stated that “they’re mostly the ones in the Agency who can’t answer telephones, who keep breaking pens, who can’t settle down, and who can’t sell properties — and so they get the job to manage them as they regularly migrate from one Agency to another“.
I should add to that by observing that most Rental Agents:
- don’t acquaint themselves with the Unit’s fixtures, such as the locations of electrical sub-board or the isolator for the water supply, or the operation of the intercom
- don’t supply incoming tenants with a copy of our Plan’s By-Laws and Special By-Laws or of Fair Trading’s “Strata Living” publication as the Act requires, even though both are “agent downloads” on our website
- don’t inspect Units during tenancies
- encourage badly-behaved tenants to voluntarily end their Agreements early with the quid-pro-quo that the Agent won’t place them on TICA (a bad tenants’ database), and so some other Owner/Landlord inherits them
- seem to select tenants on the basis of a social justice agenda, which is fine I suppose provided the tenant is also a potentially good resident of a strata community
- Have never heard of a S119 Notification, and don’t provide them
- Expect the Owners Corporation to attend to every repair and maintenance issue inside Units (and when I refuse, I’m told “every other strata manager does that”; well I’m not and I don’t).
I could go on (and on), but will instead say that the only mitigating circumstance to any of the above could on occasions be the demands of Owner/Landlords for them to get “bums in their beds”.My original post suggested that Owner/Landlords use an owner-operated Agency where Property Managers are more carefully selected and generally stay around long enough to learn the ropes properly, and under close mentoring by a committed Licensee, but upon reflection I’m even more inclined to Austman’s suggestion that self-management is most definitely the best way to go.So on balance – with regard to the best interests of both Owner/Landlords and Tenants …… Rental Agents/Property Managers are BARRIERS.Whale,
I own a rental and have thought about self managing but fear of getting bad tenants is the greatest reason I stay with a Rental Agent. As you would know a bad tenant can ruin a property. With the technology for contacting tenants and collecting rent I would say the ‘day to day’ management of a rental property is not difficult.
I realise that I can easily advertise in the local paper and ask prospective tenants for references, but, I am not confident about my ability to vet and select tenants. As you point out Rental Agents have access to a ‘banned tenants register’, how do you go selecting and vetting prospective tenants?
Cosmo – I quite obviously have strong views on the subject of Rental Agents / Property Managers, and I’ve probably gone on about it enough.
But to answer your questions, the Office of Fair Trading (in NSW) has downloadable copies of Tenancy Agreements, Condition Reports, and Fact Sheets and you also can download a selection of tenancy applications from most Agents’ websites.
If Owner / Landlords hosted an “open-home”, eye-balled potential applicants, issued the application form to those, took 15 minutes to peruse each completed one received to short-list, and then spent a further 30 minutes checking referees, then they’d be doing considerably more than most Rental Agents / Property Managers would.
As for the “banned tenants’ register”, I’d suggest to you that those are severely compromised and therefore of little if any value – refer to the 6th para of my original post (#2).
I haven’t been a landlord since the ’80s, but as “rental facilitator” for each of our sons and their wives (3), and as the Sec. of a medium-sized Plan where almost 80% of Units are rented, I’d suggest to you that I get a better then average perspective of how properties are “managed” (not) from both the perspective of Owners and from Tenants.
I should reiterate that I’m referring to the performance of most Rental Agents / Property Managers as there are obviously some good and competent ones out there.
I appreciate that initiating self-management of a property is sometimes limited by distance unless there’s a “facilitator” available, however from what I’ve observed even tenants would prefer to deal directly with their Landlord – to the great benefit of both parties.
Hi there
While I can appreciate the appeal of saving the property management fee by doing it yourself, you must keep in mind that the role of a professional property portfolio manager should include a range of responsibilities that property investors can and should take advantage of including:
- A professional appraisal of local market conditions
- A well written set of online advertisements for the property
- A professionally conducted open house
- Thoroughly analysed tenant applications
- A well-documented, and photographed, ingoing inspection
- Conduct “settling in” inspection
- Regular six-monthly periodical inspections
- Daily updates on rent collections and manage arrears
- Deal with tenants’ repair requests and make sure that the repairs are carried out professionally and at a cost-effective price.
- Be aware of opportunities for preventative maintenance and renovations that might increase the rent achievable on a particular property
- Be meticulous about rent reviews and ensure that increases are managed equitably.
- Provide landlords with regular reporting on the financial transactions surrounding the tenancy and ensure that all relevant bills are paid including tenant bills for water usage and breakages.
- Keep abreast of ever changing legislation related to each tenancy.
- Work consistently to improve the landlord’s return on their investments as by doing so, the agency itself will also improve its return.
Property management is, essentially, a commission only service that is founded upon the agency being paid a percentage of the rent collected. If the rent is collected on time, the tenants look after the place well and the rent is consistently and reasonably increased over time, then everybody wins.
To be fair, none of the contributors to this post has mentioned fees as an issue or self-managing a rental property to save those.
If the Principals of all the Rental / Property Management businesses that I’ve had dealings with availed themselves of the services provided by businesses such as National Property Systems, perhaps the world of strata, landlords, and tenants would be a better place
Over and out !!!!I think Whale makes a good point. Most Property Managers don’t get familiar with the properties they manage or the complexes they’re within…and they certainly don’t stay in their jobs long enough (Property Management is a high staff turnover industry – they’re mostly overworked and underpaid and burn out too quickly).
I think that Property Managers often forget “who” they are. They think they’re the “mediator” between the landlord and the tenant, but they’re NOT! They’re the landlord’s agent, paid to act in the best interests of the landlord. Sure, it helps if they can work well with their tenants and it will usually serve the landlord well, but Property Managers are the landlord’s representative.
Property Managers need smaller work loads, direct support from their agency Principal, better pay and to remember who’s side they’re on. Get a good one, and owning an investment property can be a joy!
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