Property Management

Podcast with Barry Adkins - Manage your property like a business

Property Ventures podcast with Barry Adkins and Mark Honeybone. 

Avoid painful mistakes by managing your property like a business

Welcome to this weeks episode where we dive into Property Management with Barry Adkins from Quniovic, one of New Zealand’s premier Property Management firms. It’s no good buying a property if you don’t receive consistent rental income from it and one of the fastest ways to get yourself into a bad situation is to not manage your rental properly. Conversely when you’re looking to buy a PM with strong local knowledge of the area can be a fantastic source of street-by-street information that you otherwise would not have had access to. Mark has run a property management business in the past and he and Barry dive into:

 

  • The big mistakes Barry sees owners managing their own properties often make.
  • What’s in it for you to work with your PM as a partner and not as just another service provider.
  • How the systems a PM company uses will help you make more money over time.
  • Questions to ask when choosing a PM.
  • What must a landlord do when they get a new tenant to save money and pain down the line.
  • How to give yourself the best chance to win tenancy tribunal cases.
  • As a long time investor – Barry’s advice for people getting into the property market.


Top 10 hazards of bad property management

When selecting a property management company it’s important to make an informed choice. Here we share the top 10 items to consider when handing over your financial future.

1. COST V’S SERVICE
A good property manager will earn you money on your investment, while a bad one will cost you dearly. Engaging a good property manager is priceless. It may be worth paying a little more for a manager doing an outstanding job, rather than below value for one not worth anything.

2. BAD COMMUNICATION
Lack of communication can cause major issues, including situations escalating to litigation before you are aware. Communication is important on all aspects of management from maintenance concerns to tenant selection processes. It pays to have Landlord Insurance in place for added protection.

3. SLOPPY SERVICE
You shouldn’t have to manage your manager. Particularly once your portfolio grows, it is not possible to constantly assess rental statements – that’s what you pay the manager for. The property manager should ensure rents are on time and take action when they are not. You should not have to step in and manage on your agent’s behalf.

4. TRUSTWORTHY
There have been occasions of dodgy property managers dipping into accounts. You must have trust in the people managing your property – if it doesn’t feel right, it probably isn’t.

5. EARNING THEIR FEES
Property managers should be completing regular inspections to avoid major issues developing. As discussed already, communication of these inspections and any items discovered is a basic requirement of good property management.

6. QUALIFIED
Ensure their staff are trained and qualified to a satisfactory standard and that they have been established in the area for some time. It’s also good to meet the property manager who will be in charge of your property.

7. MARKET AWARENESS
Always ensure property rents are up-to-date with current rental market value. Good property managers will conduct regular market rental reviews and ensure the ‘right’ tenants for your property.

8. POOR ADVERTISING
There are still some property managers with no website and no active advertising – this should set off alarm bells. Most decent property managers engage websites like trademe.co.nz and realestate.co.nz as a minimum. If they’re not, you need to ask yourself why they’re not spending the money to be a part of a significant lead generator for your property.

9. WHERE DO THEIR LOYALTIES LIE?
Is the Property Manager working on behalf of the landlord or the tenant? A good property manager must always have the interests of the landlord at heart.

10. THE RIGHT ADVICE
Overall, your property manager is responsible for ensuring the best possible rental return for your investment, so it is important they are able to provide the best advice for your property.

If you have any questions or other comments on this topic or anything else then let us know about it in the comments section below.


How much does property management cost?

A good property management company is meant to take the day-to-day hassle out of being a landlord. They also make renting easier for tenants by being on call to fix problems and making sure routine maintenance gets done. The result: happy tenants who stay longer and happy owners who get regular rental income.

 

But what does good service cost?

It all depends what you want out of your management company as the level of service can vary greatly and some landlords prefer to be more hands on than others and some property management companies like to do a little for a lot but typically as the service quality increases so does the cost. I have found a company recently offering 1.5% management services but on closer inspection it is nothing but a conduit for your tenancy payments as no other professional services are included in the fee. It's not even clear if they use an audited trust account which is essential for all professional management companies. Other Real Estate company spin off's offer flat fee managements of 6%/7%/8% or similar and just like discount Real Estate agents the fee almost always represents their quality of service and dedication to you as the owner.  In the past I have chosen my real estate agent, mortgage broker and solicitor based on my perceived level of trust in their ability to do the job to my satisfaction and within an acceptable budget. Of course personality and attitude also go a long way.

In assessing your property management company and before you ask how much we would suggest asking these simple questions:

Are they qualified to do the job

  • What are their qualifications?
  • Are they a specialised property management company or just a real estate agent company spin off property management division?
  • How long have they been in property management in the area?
  • Are they personally invested in the area?

 

How does their business work?

  • How many staff do they have and what are their roles? Do you have staff specifically responsible for finding good tenants?
  • Are they affiliated with any particular professional body with a code of ethics?
  • What resources do they have for managing property over holiday periods?
  • How many properties does your business manage, and what percentage is currently vacant? (Portfolio size and Vacancy rates)
  • What’s the average length of time it takes to fill a vacancy in the area?
  • What kind of insurance coverage do you have? Is there any fidelity fund coverage?
  • What computer system and software do you use?
  • May I see an example of a monthly reporting package?

 

What experience do you have with the Tenancy tribunal?

  • Have you appeared in Tenancy Tribunal cases? If so, what happened?

 

What are the fees?

  • What fee structure will they charge? Does it fall within the average fee of 7.5–8.5% of rent received?(https://www.tenancy.govt.nz) What other costs does the manager expect you to pay in advance?

 

How often will they be in touch?

  • How often will they report to you? What’s included in the report? What’s the format of reporting? Do they offer online services?
  • Will they provide market rent information? Will they alert you to the need for a rent review as part of their monthly reporting services? Will they have sole discretion to impose a rent review or will they need your approval?

 

How will they attract and select tenants?

  • How will the property be marketed to attract tenants? Who pays for marketing costs?
  • What does their tenant selection process include?

 

How will they deal with any issues?

  • What facilities do they have for dealing with tenant issues, and for handling any questions or emergencies outside office hours?
  • What process do they follow when a rent payment is late?

 

How will they maintain the property?

  • How often will they inspect the property?
  • Which kinds of maintenance tasks are handled by the manager in-house? Which tasks require outside contractors? Can they show you a list of preferred or accredited service providers for maintenance work?
  • What is their process for getting quotes for maintenance and repair work?
  • How do they provide contractors access to the property during the tenancy?

 

What happens when a tenancy ends?

  • At the end of the tenancy, how do they manage bond refunds and property inspections?