Business Development Manager Toni Heath, discusses five key areas that need to be avoided in property management.
One of the most important decisions a landlord will make is whether to manage their rental property themselves or enlist the services of a professional property manager.
While ‘Do It Yourself’ (DIY) property management may sound easy enough, it can actually be quite complex and there are potential traps.
One of the biggest issues facing landlords is the legal implications as risk management is now an important part of property management. If you’re going to do it yourself, you’ll need to have a thorough understanding of the tenancy legislation and paper work required.
There are also many day-to-day problems that can arise. Common issues that may need to be dealt with are tenants failing to mow the lawn and maintain the gardens, having pets without approval and getting behind in the rent.
As many landlords often develop a personal connection with their tenant, they may feel uncomfortable chasing arrears. Property managers, on the other hand, have processes in place to reduce arrears and follow up with tenants.
If you are considering managing your own rental property, it’s important to be aware of the pitfalls.
Here are five mistakes to avoid:
1. Failing to ask for a bond
This is a security deposit which is held in case the tenant doesn’t meet their obligations under the tenancy agreement, such as causing damage to the property or failing to pay the rent by the vacate date.
You are entitled to 4 weeks, we suggest you ask for this to cover any potential rental arrears or damages at the end of tenancy.
Do not keep money – must be registered with bond centre = fines applicable
2. Not having a tenancy agreement
This is a legally enforceable contract which usually spells out the length of the rental agreement, the amount of rent that will be paid, and the condition the property must be returned in.
Tenancy agreements must be in writing.
3. Not filling out a property condition report
This document describes the standard of repair for the premises and any items included within the premises, such as furniture or carpet. It is designed to protect the interests of both parties – Owner and Tenant.
4. Not understanding tenancy laws
Property management can be very complex and if landlords don’t comply with the legislation it can lead to Tenancy Tribunal hearings and fines.
The Residential Tenancies Act is constantly under review, including additional legislation amendments such as insulation and smoke alarms so its imperative that a landlord has a thorough and working knowledge of any legislative updates.
5. Inspecting without correct notice
The Residential Tenancies Act stipulates how often inspections can be done and how much notice must be given to tenants. Failing to issue correct notice can be costly as penalties apply.
Landlords can inspect a property once every 4 weeks however most property managers inspect a property 3-4 times per year or in line with landlord insurance requirements.
48 hours’ notice must be given before an inspection unless emergency repairs are required.
One of the biggest advantages of enlisting a property manager to look after your rental home is peace of mind. They take the hassle out of every step of the process from finding a tenant to collecting the rent, and attending maintenance issues to conducting routine inspections.
Although there is a cost involved in using an expert, you are paying for a professional service and the fee is tax deductible.
A property manager can also advise you on how to present your property to attract quality tenants and get the best rental return. Even if supply is tight and tenants have the demand – they’re more prepared and start their search for rental properties earlier.
So when it comes to property management, think carefully before you decide to go it alone. Contact us on the below online form if you have any questions about property management for your property.