A hybrid of self management / using a PM

[beachside]

I am in the situation of not having any descent PM's in the area (they will claim differently ) I am not with the worst I have had but confidence has fallen from fair to very low - does not seem to be repair/maintenance oriented or experienced in dealing with tradies, in other words NFI ......running a business of which this is half of what is required in knowledge and experience.

Many people on here fully or partly self manage, may use use an agent just to find tenants or have a suitable friend show interested parties through and do inspections ...but do the rest themselves.

I am interested in hearing from those owners (and input from PM's) who have a PM in the normal sense but are very hands on therefore do a lot of the things an agent would normally do and be included in management fee.

That would generally be those who live out of the area and have no choice - need to rely on a PM to find tenants, collect rent, do inspections, deal with any tenancy issues, but look after most other matters themselves because it is easier, quicker and less hassle than chasing up the PM to organise, sort out their stuff ups, or be out of pocket due to PM's incompetence.

The other matters:

Repairs and maintenance - organise themselves but may need recommendations from PM on who to contact (to start with), if agent has any they can refer who has provide insurance details. May also need agent to put tradie in contact with owner to discuss rather than owner contacting direct ....... might get better service if going through agent rather than direct as an unknown private person. Owner otherwise deals with tradie for better communication, minimising misunderstandings caused by using agent as 3rd party. May only need agent to confirm work has been done.

Rates, insurance, insuarance claims etc - owner looks after, agent only needs to recover tenants water usage charge ....(owner forwards copy of statement with tenants amount highlighted and clearly stated.)

Other issues such as council, neighbouring property/tenant - owner to look after, only needing support from agent if required.

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In the past I have looked after (arranged or did myself on visits) most of the maintenance, and been proactive rather than reactive. Of the few things I have asked agents to arrange which may not be straight forward (ie water leak) I have often given very detailed info to pass on to tradie (to assist understanding of the problem and save agent having to try and understand/interpret). I have found agents usually ignore, feeling it is not necessary because they don't have the knowledge or experience to appreciate it's value ....and then problems occur! Therefore I am feeling I may as well deal with tradies direct..

I am also thinking of having some direct contact with tenant - many pros and cons with this.

Pros:

• Eliminate any assumption by tenant .....that owner may not care, and that all actions by agent is as a result of their empowerment, not from owner involvement.
• If agent is slack in doing anything, tenant is aware of this and is not due to owners lack of caring.
• May result in tenant having a better attitude.

Cons:

• Reduces the opportunity to have agent be "interference" when required, such as to stall on any issue.
• Tenant may feel it is easier to ask for something that they would not normally bother, therefore more demands could be placed on owner (but can also lead to better relationship at minimal/no cost)
• Tenant has the opportunity to "measure" owner and may take advantage, whereas they would not know otherwise if owner is a walkover or an ar#*ole. My first tenant did meet me initially, and later took advantage.

So, what are peoples experience with being more directly involved to minimise problems caused by agents, but not able to fully self manage due to being interstate or out of the area. I expect it should not take me any more time than I am already spending, and at a small cost in extra phone calls. And what reduction in management fees would be appropriate, although the main objective here is to minimise problems and stuff ups which cost me money, not PM fees?

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[Jacque]

Hey Beachside

Over the years I've self-managed a few remote properties but you do need to have a great tenant in place for this to work as the ideal situation

The key is to ensure you have good contacts in place for tradies etc and it's really as simple as a phonecall and great communication with your tenants.
Why not use a PM as the leasing agent initially and then take over? Just remember to keep it professional with your tenant and raise the rent when you need to (classic rookie mistake or a landlord who becomes too friendly with their tenant) - if they are neat and tidy inspections can be reduced to once or twice p/a if all going smoothly.

Rent paid DD most of the time these days and auto payments can be set up for insurances, rates etc as you no doubt already know. Best of luck.

 

[thatbum]

I've arranged with my PMs to do all my own inspections and property condition reports - which would normally be additional fees. I don't really trust agents to do them properly and I like to see what the place is like myself anyway.

I also make it a point to meet all my tenants and share contact details with them both ways. I've never really understood why landlords try to avoid this - the advantages clearly outweigh any disadvantages that I can see. I'm a firm believer that putting a human face to the owner of the property means that a tenant is less inclined to damage the property or otherwise screw a landlord over.

 

[beachside]

If I lived close by it definitely would be self managed, but it is not practical to find tenants and do inspections myself, or deal with any tenant problems which I have not witnessed myself. With good tenants and a level of trust it could be achieved, but trust develops over time and until that occurs a tenant could easily take an owner for a ride. I have got some good neighbours who have my contact details but they would not stick their nose in unless things were really bad and effecting them personally.

I don't have any trade contacts other than a couple used in the past, but some of the ones my agents have used or recommended have been useless, overpriced, unreliable .... not much benefit in having a PM. It is only the unexpected that I cannot do myself, the rest I keep on top of take care of on visits to try and avoid the need for repairs/maintenance in between. Trade suppliers can be source of tradies as they know the good from the shonks, the busy or not so busy. Got a good painter at short notice like this once.

And I don't want to become buddy buddy with my tenants for the reason Jacque has pointed out. Would prefer to keep a bit of distance and uncertainty in the tenants mind so they don't get too comfortable and think they can wrap me around their finger.

Due to the area the IP is in there is a 50/50 chance of good and bad tenants, unlike better areas where it may be 80/20. Therefore a greater risk to trust a tenant, especially if you have not met them and formed your own opinion. I don't entirely trust the PM's judgement for very good reason, but can't do it myself if not present.

 

[Jhai Mitchell]

Land*lords try*ing to save money

Hey Beachside

Why not use a PM as the leasing agent initially and then take over? Just remember to keep it professional with your tenant and raise the rent when you need to (classic rookie mistake or a landlord who becomes too friendly with their tenant) - if they are neat and tidy inspections can be reduced to once or twice p/a if all going smoothly.

Rent paid DD most of the time these days and auto payments can be set up for insurances, rates etc as you no doubt already know. Best of luck.

I see landlords a gamble on their biggest asset all the time. You do not want to get emotionally attached to your tenants and make bad investment decisions.

So many landlords are not willing to have hard conversations with the tenant when needed e.g. rent arrears, gardening, damages, kicking them out etc…

I have had landlords lose $50p.w. not willing to do a rent increase because the tenant will have finical hardship?

 

[beachside]

With all respect Jhai, it sounds like standard sales spiel you have heard bounced around the office rather than speaking from your own experiences as an "experienced" landlord or even a PM (ITBDM is not a PM). I wonder if you have worked in real estate any longer than half my leases. You have missed the point.

This thread is not about saving money as I would prefer to let a PM look after everything, and for some valid reasons as you have mentioned. It is about the desperation landlords face in having to deal with useless and incompetent property mangers who cost the landlord money due to their stuff ups and lack of action. Very few take responsibility, having a p*ssed off landlord go elsewhere is the easy way out for them.

What p*sses me off is when I pay someone to do a job and it takes longer than if I was to do it myself. For example, I have been waiting 2 months for my PM to look after a very simple task, something I have arranged previously and had completed in less than 24 hours when at the house. I expected this to be done within a few days (it does not cost any more) as it would show the tenant I cared about the property and hopefully influence them to put in a bit more effort in keeping the grounds tidy. My good intentions and brownie points I was hoping to gain from the tenant is out the window .....and I still have to pay the same price for the job to be done. Will my PM go around to my tenant and set them straight ..."sorry, I am slack, the owner tried to do the right thing by you but I let them down". This is just one of many scenarios where a PM does more damage than good.

I would happily pay for a good PM, but I am at the end of my tolerance in paying for someone who costs me money and causes problems.

Not happy Jan!!!!!