Why the Majority of Owners Use Property Managers

Domain.com report that 1 in 4 landlords do not have a property manager. This can make a large difference in how repair issues such as a blocked toilet is resolved.

The 75% who do use property managers won’t need to lift a finger as the property manager arranged an emergency plumber to fix an issue. However, the remaining 25% who take on the DIY approach would be organising tenants, tradies and bills.

A property manager does more than just advertise to attract tenants to a property. Here we list some of the ways they can make a landlord’s life much easier.

1. Making maintenance simple
The above scenario occurs every week in real estate agencies across the country.
REIA president Malcom Gunning said that when the blockage in the toilet is found to be foreign matters, then it becomes the tenant’s problem and cost for repair is theirs to front.

Gunning speculates that if you were managing the property yourself, you would likely be in for a one-on-one confrontation with your tenant.

“Instead, your property manager becomes the adjudicator and they can have those difficult conversations,” he says. “They can navigate the expectations of both the landlord and the tenant and apply the lease conditions fairly.”

2. Controlling tricky conversations
According to Carolyn Parrella, executive manager for landlord insurance specialist Terri Scheer Insurance, it is advantageous to have a buffer between landlords and tenants.

“It means you’ve got someone who’s there to take calls when your hot water service breaks down at 8pm,” she says. “It’s less personal, and keeps you at arm’s length. It’s also a time issue – it can be quite time-consuming to arrange maintenance and inspections. If you want to manage your property well, it makes sense to appoint a manager to do it for you.”

3. Hiring quality tradies
For smooth and timely repairs, relationships with good tradies is also key.

“We’ve got a group of tradies that have worked with us for many years,” says Gunning. “We know they’re reliable and will do a good job and won’t need to be called back. The property manager is aiming for quality service for a reasonable cost.”

“We’ve got tradies who we’ve used for some time now” says Cathy Elliot from First National Metro. “We know they are reliable and will provide quality service at a reasonable cost."

Instead of paying premium landlord prices, director of Property Alchemy Penelope Valentine says good property managers will always get at least two quotes.

“The policy should be to work with the best professionals, making sure everyone is licensed and insured.”

4. Keeping to rights and regulations
Valentine believes that trying to manage an investment property yourself is a false economy.

“Let’s say your tenant damages your property. If you don’t have the expertise to manage those issues, they can escalate unnecessarily and landlords will find themselves at the tribunal,” she says. “A property manager can save an investor time and money.”

Parrella says a professional manager knows the fine details of the regulations that govern tenancy agreements and are also continuously keep up with regulation changes via newsletters, advice bulletins and training as a requirement.

“The average investor is not going to know the ins and outs of the law,” she says. “It’s better to leave it to someone who is familiar with the processes and understands what’s involved.”

Gunning agrees that navigating the tenancy act when problems arise is where the value of a professional’s skills are most visible.

5. Choosing tenants that fit
Valentine says that choosing the right tenant in the first place is a vital part in setting up the tenancy for success.

“It’s more involved than investors think. You can go on a gut feeling but there’s so much due diligence that needs to go around that.”

Access to tenancy databases allow property managers to avoid tenants with a bad rental history that might include breaking a lease, failing to pay rent or damaging a property.

It’s also likely that they’ll keep their own database of prospective tenants for the area they service.

“Each Saturday, if you’ve got a reasonably large portfolio, you’re doing open homes and you’ve got a list of people that come through looking to rent,” says Gunning. “So when you get a new listing you can make a call and lease it quickly – you may not even need to do marketing.”

6. Understanding market movements
A property manager can also give you a strong and up-to-date understanding of position of the market.

“They’re exposed to the whole of the market in their district, so they’ve got a pretty clear indication of rates and can advise when rents should hold, go up or go down,” Gunning says.

“In this current market where you’ve got vacancies above 2 per cent, you need a good gauge on what will lease your property. Your property manager can help you set the right rent and show you how to present your property well.”