Are Property Managers Worth Their Fees?
Updated: Feb 28, 2020
I am often asked by prospective clients - why we charge extra fees to process invoices, and shouldn’t that be included in the percentage fee we already charge? This question leads onto the next one - what does that percentage fee cover anyway?
One landlord said - all we did was collect our fee! His tenants were so good that we did not have to do a single thing for him... and sometimes It may certainly seem this way from the surface, as this is a sign we are doing a good job.
To answer this comprehensively, and as brief as possible, I have looked back at the property management service and job description to make a list of services that are included in the percentage fee paid by landlords. I’ve listed these 15 things which have made up my day-to-day operations over the past 10 years...
1. Comprehensive Initial & Exit Inspections.
The customer will get a comprehensive written report including photos. The report will be in P.D.F format for ease of storage and future reference. These inspections involve 2.5 hours of professional time including travel.
2. Routine inspections and follow up. We carry out routine inspections every three months resulting in a report with photos for our landlords. This includes follow up visits as needed to ensure the tenants keep the property in fair and reasonable condition. These involve 2 hours of professional time including travel. 3. Access to tenant vetting systems.
This includes credit checking, and background checking. It covers Tenancy Tribunal History, and Criminal History. We also have access to an international database. Our methodical reference checking includes key questions asked and noted for future reference. This includes 1 hour per application form. We tend to process multiple applications before we find a suitable applicant.
4. Professional advertising to best market your rental property. We know from experience how to get the best photos and what the best times of day are to show your rental home, so that it looks it’s best and attracts the right kind of tenants. Our marketing and letting process takes 7 to 10 hours of professional time.
5. Higher then average occupancy rates. Our experience in marketing properties for rent and dedication to finding the best tenants results in achieving higher occupancy rates for our landlords, getting them a better return on investment.
6. 24/7 Contact. For our premium clients only. A property manager will always have their phone on them. The voice message will leave instructions on who to contact if the property manager is off duty. If there is no answer, a text message will always get a response within a reasonable time frame.
7. Compliant Tenancy Agreements. Our Tenancy agreements are regularly updated to meet current legislation and trending tenancy issues such as Air BnB, over crowding, unwanted pets and more.
8. Ongoing Education of legislation updates. Smoke alarms, insulation, healthy homes and any future updates will be taken on as essential training so that your property manager is one of the leading professionals in their field.
9. Zero tolerance for rent arrears. Our daily business activities include checking rents and following up on any overdue rental payments.
10. Monthly statements. At end of each month our landlords are provided with a financial statement outlining all incomes and expenses resulting in a net balance for the month which is paid out to their account.
11. The end of financial year statement is similar to the monthly statement, except it’s for the 12 months ending.
12. Regular rent reviews and lease renewals are carried out annually to maintain market rent and return on investment.
13. Dealing with tenant queries and complaints appropriately. Tenants can sometimes push for rent reductions, threaten tenancy tribunal and withhold rent until they get what they want. Our clients can rest assured their Property Manager will manage this case by case in the appropriate way.
14. Tenancy tribunal applications and hearing attendance. Our property managers have extensive experience with the tenancy tribunal and will represent you with professionalism and get results.
15. Strong relationships with reliable contractors. We have developed great working relationships with skilled tradesmen who charge a fair price and will prioritise our work. Saving time on quotes and stress due to receiving poor quality workmanship.
This list certainly keeps a property manager busy. But there is also a lot that is done which is outside of this box which is a result of the above list being carried out. For example, I have done a lot of social work for tenants in order for rent to be paid on time - Driving tenants to and from WINZ in order to update their benefit. Speaking at emergency housing operators about how to rent a property in the private market. Letting tenants use my phone to book meetings with WINZ... and much more.
We also help our investor clients with small tips and reminders. For example, one of my investors was planning to repaint a property before he had done a meth test. We held back on painting, to do a test, and it turned out the property was deemed contaminated - Painting over the property would have been a waste of money as it was stripped back and cleaned.
I believe the property management fee saves landlords a lot of time, bad experiences and financial loss.