Are there any downsides to having the property manager take care of all my bills?

Like, any at all? I've always preferred doing it myself but never stopped to ask...why? Why do I want to take on more work and clog up my calendar with even more reminders? Are there any upsides at all to doing it yourself, no matter how minor? The only things I can think of are:

1) Having to make a lot of calls if I want to switch agents. It's not a huge job but it might make me less likely to switch if I'm really busy, even if I'm stuck with a crap agent. I've been in this situation a lot, for example I'll be paying double on my mobile bill but I leave it running for years before researching my alternatives because I've just too much on my plate.

2) Then it might be more work to reconcile the numbers every few months, having to dig back into old rental statements to make sure they've paid and charged me the right amount. If I do it myself I'll never need to reconcile.

3) Some places need utility bills with your name and address on it so I wonder if that would be troublesome.

4) Rental income isn't as consistent and it's not perfectly segmented. I.e. You can't have a consistent flow of income coming into one account and another used for expenses. It might be easier to track and manage if you're doing it yourself.

5) Maybe some agents charge a fee for this?

Anything else?

 

My main concern, and what stops me, is if they forgot to pay then it's my credit record on the line.

 

• Downside - bills are generally paid on time not at the last minute but may be paid late if there's insufficient funds being held by the agent (they can't use other people's money in the real estate trust account
• You don't get the frequent flyer points for paying on your credit card (nor does the agent )
• Bills are paid from cash (held by agent) not from your LOC

 

All my IP expenses are paid by my PM's. None of them charge extra for paying expense...its all included in their management fee.

If PM's miss a payment a reminder notice from creditor is sent direct to landlord for followup on, so no need to sweat on your credit record taking a hit @Kinnon Bell.

 

Both good points.

 

Do you reconcile the numbers every so often, or do you just trust what they've done?

In my minds eye, the job of checking off each rental statement against each bill might end up more time consuming than just paying it myself, particularly if you have a stack of unsorted bills and you need to wade through them looking at the dates.

 

@Scott No Mates is right - letting the PM pay can take away potential debt recycling opportunities.

 

Pros
- Set and forget, you don't have to worry about it
- You don't have to find the money or rearrange accounts because it comes straight from the rent

Cons
- If you pay from your LOC or equity account, the interest is deductible and you get a bigger portion of your rent disbursed out to you which could be offsetting your PPOR loan making less interest payable there
- If the PM is competent and they don't pay on time, you wear the black mark on your credit file because the bills are still in your name
- If you pay from your credit card you could get reward points (but watch out for fees)

 

What do you guys do with water bills?
We've got 11 properties with one agent, got so sick of paying the bills, then scanning them all to email off to the agent so they can chase up the water consumption portion from the tenants.
Same with BPay ing other bills/rates, just a waste of time.

 

Is your arrangement for you to pay the supply charge and tenant to pay the usage? If so, have the water company send it to the bill to the PM. The PM can take the supply charge from your disbursement and on-charge the usage portion.

 

Water Bill (along with other bills) go direct to PM..PM bills the tenant for usage and rates to landlord.

 

PM sends copy of bill to me after payment.... I could reconcile the figure shown on the bill has actually been deducted by PM for payment on owners statement but in the past found it to be accurate so most times now days I dont bother.

 

This is what I do now.
Took me a little while to organise all bills to go to PM rather than doing it myself.
Should have done it much sooner as this is part of their job.

 

It better balance otherwise their trust account wouldn't balance either.

 

That's true. It'll be just as much trouble for them if the numbers don't align.

 

@jaybean - agents can lose their agency licence if they've misappropriated funds.

Trust accounts must be externally audited annually (in nsw).

 

Be careful with this. If there are insufficient funds from rents being held when the bill comes in (particularly the council rates bill which is hefty), it'd have to wait for the next rentroll run.

If your property manager overlooks the payment it will still be your fault and would be most unfortunate to find council has whacked a caveat on your property and commenced legal action for recovery of funds.

 

I pay all my bills myself via a LOC which is fine at the moment as I only have a few IPs,not sure how I would handle this when I have 10+ IPs though.

A few here have mentioned they pay IP expenses from a credit card which I assume they do this to collect rewards etc.
So I assume you pay the bills via the credit card and than draw funds from your LOC to pay it off?

 

Just be careful you don't have any mixed purpose stuff on any of the facilities involved.

At that quantity though, its probably easier to just let the PM handle them in order to stream line your investment journey

 

I find it streamlines the process more by paying it myself, with the bank link system payments are automatically sent to my accountant and categorized and I can almost instantly get my tax and financial position and save on accountancy fees. PM statements only mean more paperwork. I pay my expenses with a credit card mainly to get the 7 weeks free interest, the points are a bonus. The $80,000 interest I save over 50 years may as well be used to reduce debt and further reduce interest. Bank link also sorts out claimable from personal expenses.