Good cop/Bad cop

Luke Parker
Good cop/Bad cop

The yard’s a mess, rent’s in arrears, new stains have appeared on the carpet, and you’ve just found a hole in the wall – we’ve all heard the horror stories.

For landlords, the world of renting out your treasured asset can be a painful and risky one fraught with stress, frustration, and time-wasting.

Your hard-earned investment starts to lose value and your renters couldn’t really care less.

SEE ALSO: First time landlord? Know your stuff

No one likes to play bad cop, but at times it has to be done.

The question is, do you continue to look after it yourself, or bite the bullet and pay someone else to get your dirty work done?

Barfoot & Thompson Director Kiri Barfoot says their company manages 11,000 properties in the Auckland region and know all too well how challenging it can be for a landlord.

“It’s dealing with those Saturday night phone calls about leaking hot water cylinders, or having to ask a tenant to pay the rent when they’re already 3 weeks behind and have just lost their job. Or it’s having to put the rent up when you’ve become close with your tenants. Those conversations aren't for everyone.”


Kiri Barfoot v2Kiri says the role of a property manager is to manage the property on the landlord’s behalf by professionally marketing it, selecting the right tenants, collecting the rent, keeping up to date with the relevant legislation, dispute resolution including going to tenancy tribunal, organising cost-effective repairs, maintenance, regular inspections, and rent reviews.

“They’re effective intermediaries between the tenant and the property owner to maximise a landlord’s return on investment, minimise their risk, and save them time, money and hassle.”

For many Kiwis, this less stressful option is the route they chose to take.

If you too want to have a property manager, selecting the right one is key.

Kiri says first impressions, communication style, and track record are 3 big things to consider.

“Will they communicate how you want? Some owners want all the details, others just the rent in their bank every month. What does their marketing look like? How quick are they to respond to your query?”

But it’s not just that simple. Keri recommends you ask a variety of questions, including:

“What are their arrears and vacancy rate? What systems do they use? What financials records will you receive? Who looks after your property when they go on holiday? Where does the rent go? Do they use an audited trust account? Are they part of a professional body e.g. REINZ (Real Estate Institute of NZ)?”

Yes, a lot of questions – but when it’s your biggest asset, you want to make sure you’re placing it in safe, reliable, and hard-working hands you can trust.

What will it cost?

Cost can vary, but most property management companies charge a commission on the weekly rent (standard industry rates are approximately 7.5% and 8.5%), repair, and maintenance organised on the landlord’s behalf.

SEE ALSO: First time landlord? Know your stuff

Negatives:

  • Cost (but this in most cases is tax deductible - check the IRD website or talk to your accountant for deductions you can and can't claim).

Positives: 

  • Saves you time and money.
  • You don't have to worry about keeping up to date with legislation.
  • Tenant doesn't have your contact details, can only ring the property manager if a problem.
  • Maximise your return and minimise your risk.
  • Less stressful.

Questions to ask A Property Manager:

1. When the tenant pays the rent where does it go?

  •     Do you have an audited trust account?
  •     Do you receive interest on my money?
  •     How often will you transfer the money into my account?
  •     Do you guarantee the rent will be paid?

2. Do you lodge the bond with the bond centre on my behalf?

  •     What is the cost to me if you have to resolve a bond dispute at the end of the tenancy?
  •     What action will you take if the bond is not paid?

3. Who will look after my property when you go on holiday or are away sick?

  •     Does all your team have access to my information if I have any questions or do I have to wait for you to return?

4. Do you have a complaints process in place if I am dissatisfied with the service?

  •     Who is available for me to contact should the need arise?

5. What checks do you carry out on your staff before you employ them?

6. What is your experience as a property manager?

  •     Can you show me some testimonials?

7. What is your vacancy and arrears rate?

8. Do you have a computerised system for monitoring rents?

  •     How secure is it?
  •     Do you have off-site back-ups?

9. What other resources does your company have in place?

10. How do you keep up to date with tenancy legislation and other legal issues?

11. What is your standard practice for carrying out rent reviews?

  •     How often do you do them?
  •     Do you contact me first to discuss?

12. How often do you do inspections?

13. Will you send me a copy of the report?
          Do you take photographs and send me a copy of those as well?
          Do you charge for carrying out inspections?

14. How do you choose your contractors?

  •     Do you check if they have liability insurance?
  •     Do you check if your plumbers, electricians, builders are registered?
  •     Would you provide me with quotes if required?

15. What do you see as being your point of difference from any other property management business?

16. Do you do the entire job or do you have other staff to back you up?

House Hunting?

Westpac has info and tools to help you navigate the house hunting process:

 

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