Property Management Value Add

Discussion in 'Property Management' started by Ruvan, 10th May, 2020.

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  1. Ruvan

    Ruvan New Member

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    10th May, 2020
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    Perth
    Hi All :)

    I've come to these forums to understand the value of a property manager in the eyes of both a landlord and a tenant. I have a house that I'm renovating at the moment and am considering renting it as I'm happy where I currently live (down the street from the reno project).

    I'm wondering:
    1. What are a property managers biggest value adds in the eyes of both the landlord and tenant?
    2. What are some of the biggest drawbacks that you've seen from having a property manager / what could normally be done better?
    3. Is there something that the property manager / real estate agent does that the tenant and landlord cannot do by themselves?
    To be clear, I'm not wanting to flame real estate agents here, I just want to know what value they truly add so that I can make my own mind up as to whether I use one.

    Thank you in advance!
    Ruvan
     
  2. thatbum

    thatbum Well-Known Member

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    Well unless you're fully across the tenancy laws, practice, and procedure, then you're paying for their specialist skills and expertise really. Most landlords would fall into this category.

    Even if you are across them like I am, then there's still value in paying someone to do the things you don't have time to do, or they are more efficient at doing.

    The trade off? Easy - the management fees you have to pay them!
     
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  3. The Gambler

    The Gambler Well-Known Member

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    1. The PM takes care of everything from tenant issues to insurance claims. They act as a buffer between you and the T. Both the LL and T go through the PM if there are problems. This is good because they have a lot of experience and can give good advice as they know the laws. They take responsibility away from the LL. As ThatBum mentioned there are a lot of laws you need to know and if you don't follow correct procedure you can find yourself in trouble.

    2. If you get a good PM I doubt there is much you can do better. Of course they cost a percentage of your rent, but I honestly believe a good PM is worth every percentage point they ask for. BUT... if you get a bad PM with poor communication skills, then you need to change PMs asap. There are many threads on here with people complaining about their PMs. Often it's to do with communication.

    3. Mentioned in #1. A good PM is like a failsafe.

    Hope that helps. Good Luck.
     
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  4. Ruvan

    Ruvan New Member

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    Thank you both for your responses.
    @The Gambler , I'll go looking for those threads complaining about PMs.

    So from what I'm gathering, the PM is there largely to assist the LL and T navigate the legal framework as well as buffer the LL from week-to-week T needs such as insurance claims and maintenance.

    I like hearing that PMs can be worth every percentage point. I'm wondering if that really applies when you have more than one investment rather than just one.

    I've heard my friends and family complain about PMs both as being Ts and as being LLs and am really racking my brain thinking to understand why I might employ one. If I have an understanding of the laws applicable (and a lawyer to chat to when I'm unsure), as well as decent communication skills and a can-do attitude, it sounds like one could manage their own investment.

    How might I tell that my PM is poorly communicating with my T? In employing the PM, aren't I more or less unable to communicate with the T to ask?

    Doing so would allow me to pass partial savings to my Ts and maybe come across as a more 'intouch' LL such that Ts would want longer tenures at my property. Perhaps!
     
  5. thatbum

    thatbum Well-Known Member

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    I would agree with this. Problem is that most lessors don't even have one of those traits, let alone both.

    Nothing stopping you asking your tenant in this scenario.
     
  6. Warren from Geelong

    Warren from Geelong Active Member

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    Think of your property as a car and your PM as a mechanic.

    I have an older car - 2004 - it's not worth much and it is my second car. It was recently due for a service so I changed the oil - that's it, just the oil because that's all the skill I have. The mechanic would have put it on a hoist, changed the oil faster, checked all the lubrication points, worked out how to change that stinking cabin filter, probably checked the transmission fluids (not sure where they even go), brakes, fuel filter, and so much more that I don't even know about.

    Weird example, but my point is: I'm not a mechanic and landlords aren't PMs. ;)
     
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  7. Scott No Mates

    Scott No Mates Well-Known Member

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    Have you gotten across the legislation regarding Covid-19? How do you treat with a non-paying tenant? You need to so your due diligence on the PM & not just take the cheapest.

    Why would you take a lesser return from a tenant that you don't know from Adam? Why should they benefit from a below market rent?