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Landlords get what they pay for. (Qld)

Discussion in 'Real Estate' started by lura, 20th Apr, 2010.

  1. lura

    lura Active Member

    Joined:
    18th Apr, 2008
    Posts:
    33
    Location:
    Brisbane
    Everyone complains about poor the property management service they receive - poor communication, lack of transparency, ineffective procedures....
    I understand a lot of owners are time poor and trying to keep up with all the legislative changes is sometimes too hard. And of course, access to information is fragmented between many government agencies. Then you add the rubbish agents spin with legal mumble jumble in management agreements and leases. (Most of the time, even they don't understand this).

    I've voiced my opinion on various matters in the past and I have received responses from investors that are varied - with their experience using property managers.

    At the end of the day, real agents/letting agents are all obligated to act in your best interest - what if they don't? What do you do about it?

    You find someone else. The amount of times I have seen owners stick with poor property managers on the one hand and whinge about the service they receive on the other...transferring management is easy with the right property managers - some owners are afraid of upsetting their current managers -why should you, it's your property!

    Verify your property managers - you can ask to see their qualifications, the code of conduct for which they are obliged to perform on your behalf. I don't blame you if your agent doesn't have a copy - most of them won't even know the content of the Code of Conduct.

    I'm putting together a series of information sheets about issues a lot of property investors have including easy to follow guides on choosing property managers etc. If users in here have any particular issue they would like to cover - I would be most happy to add/extend the contents to cover. On completion, it will be posted in here for all users.

    Please note, I am Qld based and where legislative issues are concerned, it will be Qld relevant.
     
    Last edited by a moderator: 20th Apr, 2010
  2. KateMelb

    KateMelb Active Member

    Joined:
    17th Apr, 2010
    Posts:
    33
    Location:
    Melbourne, Victoria
    With all due respect, I wasted far too much time and money jumping from one incompetant property manager to another. I now self-manage and couldn't be happier.

    IP owners shouldn't be afraid to self-manage, especially if your IP portfolio is close to where you live. Contrary to PM myths, it doesn't take much time to self-manage and you don't need to know all the legal ins and out: your state Consumer Affairs office summarises everything you need to know in the one, free, plain English booklet that is available online.

    To pay a few bills and make a few phone calls a year when something needs repairing once in a blue moon, I refuse to pay a PM $1000+ a year even if it's tax deductible. I'd rather invest that money back into my property, increasing depreciables, capital growth and making the tenant happy. A much better return on the same investment!

    I will only use a PM to find a tenant as they have access to the default databases. Have never needed to go to a tribunal or enforce an eviction but might use a PM to help with this if it ever occurs.

    *********************
    I DIY manage with Rentwise.
     
  3. Billv

    Billv Getting there

    Joined:
    15th Jul, 2007
    Posts:
    1,796
    Location:
    Sydney, NSW
    Kate,

    I found it easier to address the problem so if the PM is not performing I tell them to get their act together.

    Self managing is an option for those who want to go down this path but I have better things to do with my time. Also, my biggest concern is landlord insurance. How do you get around the legal liability issue when you are self managing? Are you putting your assets at risk?

    Also, a PM is experienced with tribunals and knows how to handle conflicts.
    They're acting on your behalf but they are a 3rd party so this could be an advantage when it comes to disputes, insurance claims etc.
     
  4. Billv

    Billv Getting there

    Joined:
    15th Jul, 2007
    Posts:
    1,796
    Location:
    Sydney, NSW
    Lura
    The information sheets are a great idea.
    I actually smiled when I saw your line on the code of conduct.
    To me it makes little difference if the PM is fully qualified, has integrity and if he sticks to legislation. To me its all about results.

    For example, I had a particular tenant who was always paying late and I wanted to stop this from hapenning so I asked to have the rent deducted from the tenant's bank account but the PM told me that this is not allowed.

    A different agent actually did it and the rent has always been paid on time since.
    I don't know if this is ethical or legal but it works and that's all I'm interested in.
    If they don't have enough money left to spend on grog or to pay other bills is of no concern to me.

    This PM is actually quite strict, a couple of months back she sent a termination notice to them because they were late with the payment of water usage. When I questioned her action, she said that it was to scare them and most people who receive a notice pay straight away.

    She also said that if any tenant is a pain in the a... and doesn't look after the place they should be evicted because right now there are many good tenants to choose from.
    I can't argue with that....:D
     
  5. KateMelb

    KateMelb Active Member

    Joined:
    17th Apr, 2010
    Posts:
    33
    Location:
    Melbourne, Victoria
    You've raised some important issues Bill, I'm more than happy to clarify:

    1. I usually spend about four hours a year on self-managing: pay a few bills, make a few phone calls if something needs repairing, a 10 minute annual inspection and filling in the new lease/rent increase form. That's it, per year. I have better things to spend my money on than a property manager who only does four hours work a year!

    2. Landlord's insurance is unaffected whether the owner self-manages or has a property manager. Managers have their own professional indemnity insurance policies. Insurance is generally invalidated due to the policy holder's negligence or the negligence of their agent. As long as I am not negligent, how is that different to an agent not acting negligently?

    3. In all my years as a landlord I've never once been to a tribunal or had a conflict issue that required third party assistance. Charging a reasonable level of rent and treating tenants with courtesy has probably prevented much of this. In any event, I could always hire an agent to act on my behalf if I ever needed tribunal representation - no need to waste money keeping them on permanently for the reasons mentioned earlier.

    Hope this clarifies a few myths about self-managing.

    **********************
    I DIY manage with Rentwise.
     
  6. lura

    lura Active Member

    Joined:
    18th Apr, 2008
    Posts:
    33
    Location:
    Brisbane
    Billv - I'm glad your property manager is strict.
    Rent payment s- push funds and pull funds. These options are available and if you can't set it up within the office directly with the bank - there are third party gateway companies like Rentpay to implement these on your behalf.

    I also provide a credit card facility for my tenants as an alternative. If new tenants sign up I get them to sign authority to deduct and keep this on file in the instance they fall behind to breach territory. Reason - Rentpay and credit card facilities cost tenants ($3.00 per transaction for Rentpay and 1% for credit card - but with credit cards - they can also control their cashflow.

    Giving tenants too many breaches and notice to leaves as threats. Yes, I can see this as a tool to scare them - but used too often, it can loose it's impact for the intended purpose. For example, a Notice to leave when I issue it - means I want the property back but the date indicated on the notice. Unless I have in writing from my client that they do not wish to remove the tenant (for obvious cost associations) then the tenant may stay. Too many agents use notice to breaches and notice to leaves as threat tools to the extent that some tenants no longer see them as legal notices that trigger the process of terminating the agreement.

    I laugh when I see a reference from a previous agent that tells me ma applicant has 6+ breaches but they would still rent to them. I won't - this just means this tenant is going to take up too much of my time and my clients time to monitor...sorry, someone can have them.

    I urge owners to interview the actual property managers that will look after their property and qualify them directly. I have a small practice and it frustrates me no end trying to tell prospective owners what qualities they need in pms. A lot of pms lack age, experience and qualifications and most importantly, commonsense!!

    thanks for you feedback billv.

    Self managed owners - I work with a few, everyone is different and some more suited then others and have mor time to attend to their properties than others.
     
  7. KateMelb

    KateMelb Active Member

    Joined:
    17th Apr, 2010
    Posts:
    33
    Location:
    Melbourne, Victoria

    Some really good points Lura.

    Just re the rent payment methods, in Victoria tenants must have the option to make direct deposit payments (bank slip) without fees. Can't impose on them something like Rentpay. Indeed when I was renting a few years back I challenged the PM that tried to impose it on me. They quickly backed down and gave me an Aus Post/NAB Rentcard instead = free direct deposit facility.