If you had an audience of potential owners thinking of renting out a property for the very first time and you had the opportunity to speak with them about being prepared, what would you say to them?
Maybe you’d tell them how good your services are and why they should use you, or would you take the opportunity to educate them right from the start?
What about some tough love and strong advice?
Here are 11 things property managers would like to say to their owner clients if they had the chance.
These tips and ideas were partly collected from a recent Facebook competition we ran for our PM audience.
#1- Treat it like a business and leave your emotions out of it.
The minute you hand over keys and charge rent, it’s a business and it’s tax-deductible too (in Australia at least). It’s also an investment and it has risks associated with it. There are losses that need to be covered sometimes and money that needs to be invested in its upkeep, from time to time. Also like a business, please don’t get emotionally involved with it. If the rental property was once your family home and you feel emotionally attached to it, it may be better to sell the home instead of renting it out.
#2- Your trust is a must!
Your property manager has a lot of experience and has probably ‘seen it all’! We have managed hundreds of tenancies in our time. Trust us with your instructions to get it done right, and there’s no need to ‘micro-manage’ us.
#3- We insist you take out full Landlord Insurance cover.
We cannot predict the actions of any tenant – good, bad, or otherwise. Just like you have building insurance in case there’s a fire, you must have Landlord Insurance cover to protect your rental income and property from a defaulting or bad tenant. Please also ensure you have quality landlord insurance because if you’ve bought it from a bank, you may not have proper cover at all. This is because they are usually poorly performing policies when it comes to claiming time and you can experience large excesses for issues of rent default, and may not even have any cover with certain types of tenancy agreements. Even worse is if you have not enough cover or no cover at all, and extreme issues occur like drug production and associated damage and clean-up is required, it can be very financially damaging. So speak to us regarding Landlord Insurance cover and we can connect you with some quality policies.
#4- Have a budget and allow for repairs.
Things will always break down, wear out and everything will need repairing and replacing eventually. Please ensure you have set aside a budget to be able to get the necessary repairs done. Every 7-10 years the hot water service will need replacing. Please be ready for this. Every 5-10 years things like new interior and exterior painting will be required as well as new flooring etc. Please ensure you have the funds set aside for such expenses.
#5- Be realistic with ‘fair wear and tear’.
Your property will never be looked after the way you would. Good tenants all live uniquely and will treat the property differently according to their lifestyle, without necessarily damaging the property or doing ‘the wrong thing’. As soon as the property is rented and rent money is charged, we legally fall under the jurisdiction of the ‘Residential Tenancies Act’ where reasonable ‘fair wear and tear’ must be allowed. That means if things wear down, get scuffed or marked over time or break down simply from using the item, this must be permitted and amended at the owner’s expense. There’s a limit to this, and of course depreciation (in Australia) is an allowable tax-deductible expense.
#6- We are responsible for your rent, not your mortgage!
We can only charge the tenant rent at acceptable rates dictated by market demand and no more. We cannot adjust the rent to ensure that your mortgage is paid, plus expenses and our agency fees and you’re not out of pocket. Please also ensure you have enough money to cover at least one mortgage payment ahead of time. We do our very best to ensure your rent is paid on time but even we don’t have a crystal ball to see into the future. Good tenants can get behind in their rent from time to time, or our system may payout at the end of month 1 or 2 days beyond what’s expected (this is rare). We cannot be responsible for paying your bank penalty fees should this occur.
#7- You’re in the accommodation business now!
When we rent out your property we are providing accommodation to paying customers. If you booked into a hotel paying their full rates and the room provided was dirty, had things not working and/or was poorly presented, you would be unhappy and would likely make a complaint asking for your money back. Your tenants are paying customers and need to have clean accommodation in a good state of repair. Having a good working partnership with our tenants is really important for overall tenancy success.
#8- We are not always instantly available.
We are property managers and spend a large portion of our time outside of the office and away from managing a property. If you leave a message by phone or email us, we will get back to you within a reasonable time, but always within 24 hours, depending on the level of urgency. We ask that if you’d like to call us or come in to see us, it’s best that you make an appointment by email and we can slot in a time that works.
#9- We are unavailable after-hours.
We will always work hard for you during business hours but after-hours we have personal and family priorities. If you leave a message or email us after hours, we will get back to you on the next working day. If it is an emergency repair then we will get it arranged so you do not need to worry about it, and we will let you know on the next business day.
#10- We need to use our own tradespeople.
We have selected quality tradespeople and have checked their qualifications, public liability cover, as well as other things. They are also selected on their ability to get the work done in a reasonable time frame at a quality level of workmanship and reasonable rates. Any work done at the property can only be done with tradespeople we have approved and we take a big risk if we use anyone else not approved by our strict selection criteria. In an age of litigation risk, we need to be in control of the tradespeople used and selected to repair your property.
#11- Our tradespeople don’t work for free.
Just like in point #10, we select quality tradespeople who charge reasonable rates. This also means they are in strong demand and therefore they’re unable to do any work for free. If you feel you need to get a quote or three we’d be happy to arrange it, however, in each instance, a call-out fee will be charged by them. In most cases, it’s just quicker, easier, and cheaper to get the work done in the first instance and avoid call-out fees being charged altogether.