The short answer is YES! You should definitely hire a property manager. In this post, I’ll explain exactly why.
I have personally owned rental properties since 2014. In that time I’ve tried managing them myself and hiring others to do it.
What I have learned through years of experience is that a great property manager is worth their weight in gold.
Like any good Kiwi, I love to be self-reliant. And with investment properties, it’s so tempting to try to save money and avoid asking for help. But with property, the stakes are high and stuff-ups can be extremely costly.
So for the same reason you get a lawyer to check over the title and contract when you buy a home, you should get a property manager to look after your investment once you rent it out.
And while it’s fun to stay connected to your properties by managing them yourself, the time commitment required is not to be underestimated.
Some of the tasks involved, just to do a passable job are:
- Checking that the rent is paid on time each week
- Completing an inspection every 3 months (required by your insurance)
- Providing tenants with up-to-date insurance and insulation details
- Ensuring and maintaining healthy homes compliance
- Planning a maintenance schedule around gardening, chattels, cladding and roofing
- Getting gutters cleaned regularly enough to avoid blockages
- Maintaining fireplaces and chimneys
- Ensuring correct notice is given to tenants for all tradespeople visits and inspections
- Handling changes in the tenant’s situation – will you allow them to break a fixed term if they get made redundant? Or they buy a home? Or their relationship breaks up?
- Researching market rents to see where your property stacks up
- Handling rent increases with tenants and providing correct notice periods
- Dealing with rent arrears
If your property is empty (or a tenant has just left) you’ll also need to:
- Arrange an outgoing inspection and negotiate any repair costs coming out of the bond
- Organise a thorough clean of the property
- Project manage any small repairs or touchups required between tenancies
- Take photos
- Put the property on trademe
- Research market rent and decide on a fair price
- Handle the extreme amount of enquiry you will likely receive, via text, phone and email
- Arrange viewings and answer questions from prospective tenants
- Provide application forms
- Phone references and complete background checks
- Choose a tenant (and tell everyone else they missed out)
- Complete an ingoing inspection with your new tenant
- Arrange keys
- Obtain and lodge a bond with tenancy services
- Complete a tenancy agreement
And that’s all just the standard stuff. You can imagine how time-consuming and stressful it could get if you ever had a problem and had to attend a tenancy tribunal hearing.
A property manager handles all of that for you. Plus, most importantly, they are there to help you make smart decisions. When it comes to selecting a tenant, their wealth of experience and finely tuned judge of character can be the difference between a stress-free tenancy and a horror story.
Like any service industry though, not all property managers are created equal. So how do you find a good one?
Questions to ask your future property manager…
How many years have you been a property manager?
That finely tuned sense of character which they need to help you select a great tenant generally comes after years of experience meeting and working with people.
How many properties do you manage?
You want to make sure they are serious about this business and that property management is their main job, but also that they are not so stretched that they won’t remember your name.
Do you own the business yourself?
One of the biggest problems in the property management industry is the amount of staff turnover. It’s a tough, stressful job with relatively low salaries and budding young managers often leave larger companies after short periods to chase better pay elsewhere, or to find a less stressful job.
By hiring a property manager that runs their own business, you increase your chances of keeping the same manager for a long period of time. And when it comes to property, continuity of service is key.
You want to be on a first-name basis with your chosen manager and you want them to know your property inside-out.
Do you have any existing clients I can speak with?
You should ask any prospective tenant for references, and you should do the same for your property manager. Call 1 or 2 of their current clients and get a feel for what they are like to work with.
A note on fees…
Property managers in New Zealand usually charge 7 – 10% of the weekly rent to manage a property. But the devil is in the detail. Most companies, especially at the lower end of the percentage scale charge a multitude of extra ‘fees’ that you won’t notice until you read the fine print or until you start looking closely at your monthly statements.
These can include but are not limited to:
- Inspection fees
- Maintenance fees (an extra % on top of the bill from your plumber)
- Admin fees
- Letting fees
- Tenancy tribunal fees
- Ingoing / outgoing inspection fees
The list goes on. Naturally, you want to hire a company with as few extra fees as possible or negotiate some of them out of the contract if you can.
Note: One expense you shouldn’t skimp on is advertising. If your property manager gives you the option of paying for professional photographs when advertising your property online, go for it! You will have these photos forever and making your property look good online will increase enquiry and help you get the best possible weekly rent.
If you own property in Wellington…
If you own investment property in the Wellington region, check out Simply Rentals. It’s our very own property management company. Owners benefit from zero letting fees, no hidden costs and first-name personal service from my long-time property manager, Lynette Sletcher.