Reminder to do regular IP/Pm check ups.

I just thought I'd remind people to regularly check up on their PM and portfolios. It is amazing what can happen in 6-8mths if you don't have your finger on the pulse.

1. Last month - discovered PM didn't follow up with lease renewal signatures and unauthorised tenants had moved in (I was lead to believe this was sorted in July). End result - these tenants are vacating and new tenants are signed up - but I lose one weeks's rent for the changeover and another week's rent plus gst for the new lease. (I changed PMs - so lease fee is for the new agency). This prompted me to do a check up on all IPS.

2. Was advised tenants are periodical and PM has advised they need to give 28days if they wish to move. To my knowledge tenants had resigned for 12mths. I had to do some digging - and found the email where PM confirms tenants have re-signed in Feb for 12mths, she signed on our behalf and will post out the leases. WOW - we will see how this pans out!

3. Tenants lease ended - they are periodical. No discussion or correspondence at all.

That is just the ones I have followed up with!

 

Yes this can be a hard lesson to learn the first time.

After it happens once, you should learn that each time you get a new tenant you need to put dates in your calendar to email/notify yourself 4 months in advance of lease end date to follow up.

When time to follow up, make sure you know what the current rental market is like, what you think is a reasonable amount of rent, discuss with PM but take their advice with a pinch of salt because you are the one who wears the loss when they advertise the rent too high and end up taking 2-3 extra weeks vacancy to find someone so be comfortable with disregarding their opinion - or maybe put it higher for 1 week max before dropping to what you consider fair rental market price and only make it higher for a week if you have plenty of time before current lease ends - vacancy is the biggest cost with an IP and an agent is trying to look good by getting you a higher rent (or suggesting they can do so) and has no interest in your financial loss during extended vacancy while advertising at the unjustifiably higher rent.

Make sure you know how far ahead you need to give termination notice and the increase rental notice (usually there are different minimum time frames for these so pick the higher) and then make sure your agent sends out the termination notice with new lease to sign and rental increase notice all together and at least a week before this time frame and via registered mail. If new lease not signed 1 month before, start advertising. With new tenant applications, make sure the agent has done background checks on employment and last land lord and tenant database - tell them specifically you want all of these done so they know you are watching/checking them. When new tenant signed, make sure agent takes (and sends to you) comprehensive photographs of the entire property so that if something is damaged you have proof.

Manage your PM's. Always manage your PM's.

Your IP's are you business and just as a business owner has to check up regularly to see that work is getting done and to be willing to prod or fire an incompetent worker, you have to do the same.