Many landlords attempt to manage their investment properties, as property management can appear on the surface to be straightforward and simple. While the ‘DIY’ approach is suitable for some landlords with the time, knowledge and aptitude to handle all aspects of managing rental properties, there are a number of very good reasons to consider engaging a professional property manager. Below are some questions to think about:
In a situation where a tenant has fallen behind on their rent (perhaps due to circumstances out of their reasonable control), would you be able to follow this up to the point of eviction?
With a property manager taking care of your investment, you are less likely to end up in this situation, and in the unlikely event that you do, you do not need to attend a Tribunal hearing opposite the tenants that you are potentially evicting.
How would you handle a Tribunal hearing?
A hearing in the Tenancy Tribunal can be intimidating, highly-charged emotionally and generally unpleasant. You need to know what evidence the Tribunal requires (and be able to produce it), and be very confident in your knowledge of the Residential Tenancies Act (and other applicable laws.)
Are you happy to be on-call 24/7?
Should you employ a property manager, they field all calls from tenants, including emergency calls in the middle of the night – leaving you to sleep in peace.
Do you have someone capable and knowledgeable to manage the property in your absence?
A property manager is always there to take care of your investment in a professional manner, leaving you free to travel as you please without worry. The law in New Zealand also states that a landlord that is overseas for 21 days or more must appoint a New Zealand-based agent. There is no legal obligation to use a property manager in these circumstances. However, while a friend or family member fulfils your legal obligation, it creates extra risk (in that they may not be aware of a landlord’s legal responsibilities or rights, they may not do thorough inspections, and so on.) It is also a burden you may not wish to impose on those you care about (considering the time involved, and potential bothers like emergency after hours calls from tenants.)
Do you know how to or have an interest in performing thorough checks on potential tenants?
Less desirable tenants often target private (DIY) landlords, knowing that their pre-tenancy checks are not likely to be stringent. A professional property manager will check employment references, landlord references, and the Tenancy Tribunal database, along with a credit check, Google and social media checks.
Are you organised and/or assertive enough to chase up late rent payments immediately?
A good property manager will receipt and reconcile all rents daily, with immediate follow-up if rent is not paid when due. This discourages late payments, and following a formal process decreases your chances of loss.
Do you keep comprehensive and accurate records?
Record keeping is of vital importance in the field of property management. One reason (of many) is that if a tenant challenges your actions in Tribunal it is extremely important to have all the correct documentation. Our correspondence is mostly sent through our property management software, where it is safely and neatly stored. This includes emails, letters, inspections, texts and so on.
Are you an expert at property inspections?
One of the best ways to reduce your risk as a landlord is to conduct very thorough inspections of the property, particularly at the beginning and end of a tenancy. This includes detailed notes and usually hundreds of photos. We use an iPhone app to conduct professional inspections, which integrate with our software. This ensures you have both written and photo evidence of the condition of the property when a tenancy began – very important if you are ever claiming for damages in Tribunal!
Do you have the time or inclination to stay up-to-date on tenancy law?
At Ray White we have the inclination, we have constant training, we have an in-depth knowledge of the law, and we have one of New Zealand’s top residential tenancy lawyers (out of very few specialists in this field) available to consult at any time on any legal matters that arise, free of charge to our clients.
How much will you save if you manage your rental property or properties yourself?
Don’t forget to take into account the stress, the time it takes, the potential extra risk and the fact that our fees are tax-deductible.
Would you rather take on the stress, spend the time and take the risk of doing it yourself in order to save that amount?