Are PM's worth it?

[goddessk]

Hi all,

As a new IP owner of lower cost properties the PM costs obviously eat into the rental income and although I know they are tax deductable, just interested in what people think of their PM.

The time savings are obvious and it makes it easier when your IP's are nowhere near you (as mine aren't) but I have had to follow them up, make sure I am getting all the right paperwork, harass them to do stuff and so on. And they all seem to be the same.

If you have an IP that just hums along and the tenants are there for 12 months or more, I am wondering if it is worth it. Plus in my case they get around $800-1000 a year. What can you really expect for that kind of money?

I'm interested to hear some stories or feedback from some of you regarding whether to have a PM or not. I know that it will vary by property, state, what your tenants are like etc, etc but just generally interested in some feedback. Any stories of good or bad situations are welcomed.

 

[Rixter]

All my property portfolio is managed by PM's....I do this for a number of reasons. Mainly better Time management & legal issues.

It allows me to concentrate on building my Portfolio while I employ PM's to operate the day to day running of properties within it. I believe its more professional & business like this way.

Theyre up to date with all the legal issues associated with the act, regulations & leases, represent me in court should a tenant requires eviction, Advertising & vetting new applications, Paying my IP Bills, Collecting rent, inspections, orgainising repairs & maintenace, as well as can advice me on market conditions - all this for a nominal fee thats fully tax deductable.

The last thing I want to do is become a slave to the operation of individual properties within my portfolio - To me it sort of defeats my purpose for building my portfolio in the first instance.

 

[Monopoly]

Goddesk,

I have more stories than I could poke a stick at; both good and bad with respect to tenants and PMs. It really is a matter of doing your homework, and if you did this when you first bought the IP then you should be well and truly used to it, and will not mind doing a thorough review of potential PMs.

Having a PM can have its downsides, but for the most part IMO, especially if they do their job and do it well (ie. are professional) thus keeping you informed at all times of ALL goings-on with respect to the IP, then they are worth every penny. Good commuication, professional service and happy tenants means you can sleep better at nights, and your (tax deductible) money has been well spent.

Late addition: Rixter is spot on!! A good PM will be up-to-date with legalities of property manangement, and (the bit I love the most) it saves you time which you can better spend on enjoying life!!

Cheers,

Jo

 

[toony]

Well worth it

Yes they are well worth it in my opinion.

When there is a problem, thats when you get the most benefit.

But you still need to manage them. I still chase them up for certain things, but the chqs always come in on time and they have never had a problem finding new tenants in time.

I work full time and dont have the time or inclination to deal with tenants.

 

[duncan_m]

I found them a waste of time and money.. sloppy paperwork, poor tenant selection, poor advertising, slow to act on late rent, arrogant, expensive.. not just one, quite a few I engaged...

I now self manage all of mine.. When I have no vacancies I spend no more than 1-2 hrs a week on paperwork and managing them.. my tenants seem to stay longer, I'm more in tune with my properties, I know exactly whats going on with each property.. no nasty suprises like upcoming vacancies that havent been advertised for..

I love self managing it saves me at least $20K a year...

BUT most my IP's are quite close and I'm a very good judge of character, for what-ever reason I seem to be able to "read" people in person so have almost always picked good Tenants..

If my IP's were more than 30-40mins away I'd get them managed.. without a doubt. If I wasnt confident around people I'd also self manage.

 

[lizzie]

i have a brilliant pm and definately recommend them if you can get a good one. it only takes on bad tenant which ends up in the tribunal to realise what a blessing a good pm can be. also, i don't want to be bothered in the middle of the night with hot water or roof problems. i'm also a softy, so it's good to have a barrier between myself and the tenants - then i can be a harder decision maker when it comes to requests as i don't have to deal with the tenants myself.

 

[kathryn d]

I remember someone saying once that they do the maintenance at their IP'S but never let on they are really the owners.

Could an owner do the same when dealing with the tenants? Have a separate phone for dealing with tenants and their requests. Shut off phone after business hours and let machine take messages? If you don't want to give in to certain requests have the "manager you" say the owner refused?

 

[Don and Liz]

never ever self manage - focus on the bigger picture and devote that extra time to generating a large portfolio rather than becoming preoccupied with low end task and problem - some people can do it successfully - it takes a certain "skill"

 

[geoffw]

never ever self manage - focus on the bigger picture and devote that extra time to generating a large portfolio rather than becoming preoccupied with low end task and problem - some people can do it successfully - it takes a certain "skill"

I self manage one property, not for the money, but because the previous property manager was so crappy. My flock of bats I'm happy to leave with the PM.

 

[grubar30]

I'm with Duncan - I also self-manage…I simply found most PM fees to be unnecessary and a burden to my cash-flow....$1600 a year for a PM to manage two of my properties?…...no thanks, I can do the same job myself – and its that much easier when things don’t go wrong…in fact, the two years my properties were handled by a PM, only a single washer needed replacing…and that itself cost me an unbelievable $70 for a plumber the PM sourced…it was an expensive lesson and I now do all maintenance myself…its challenging, rewarding and like duncan said – I’m more in tune with what’s going on with my properties…in addition, I do everything from advertising for tenants (yes, its easy as an AD in the weekly paper), handling the paperwork (leases, bond, entry report - the REIQ website makes this so easy), repairs, etc……

As for troublesome tenants…well its funny you know, because I’ve never had any trouble with tenants except when placed by a PM – I still remember those 3 feral uni. chicks who lived like animals and ended up trashing my carpets, curtains, walls….never again!


George “vote NO for PMs” Grubar

 

[Corsa]

I can see pros and cons for both sides for getting a PM or not.

All the reasons that Duncan have outlined make sense, but i think an important distinction to make is can you do your own repairs.

For me, I would struggle to work out any plumbing issue or problem needing repairing. I am definately more of the hands off kind of property owner and paying someone to replace a washer for $70 would not bother me as I could not do it myself. I also work in the corporate world so dont really have time to manage - and the practise runs I have had have all lead to disastrous results! i am a terrible judge of character obviously as all the people i have ended up trusting have let me down.

So for what is costs me to get mine managed, I dont mind the tax deductible expense. The only one that i manage I am shortly going to get a pm to do that one as well.

depends on your personality, time contraints, $, skills, and what you enjoy doing.

 

[lizzie]

and paying someone to replace a washer for $70 would not bother me as I could not do it myself.

or get a handyman to do it for $30. for $30 tax deductable i can't be bothered.

 

[WillG]

I have only used PM's because of time constaints with work and family.

I have had some good and some bad PM's. My current PM seems good but you never know what is really going on.

I like that I don't have to speak to the tennents. I have purely a business relationship with them. I have no problems asking the PM to raise rent etc.

If the rent is late, I ask the PM the hard questions and expect an answer ASAP.

'Big problems' only seem to arise when I have been travelling with work and have managed them well over the telephone with the PM.

I like that I can ask the PM to get 3 quotes when something needs replacing/fxing.

At some stage I would like to self manage one or two IP's so I can get a better idea of how PM's make their money and so I can have more control

 

[geoffw]

Some PMs have been known to have kickback deals with tradesmen. It may actually be cheaper to pay your own tradesmen- or at minimum, do your due diligence on the cost of tradespeople.

 

[duncan_m]

or get a handyman to do it for $30. for $30 tax deductable i can't be bothered.

I do them all at the same time.. if I get a call for a leaking tap I turn the water off and do every tap inside and out.. takes a little longer, but I can guarantee I wont be back in 5 weeks time for another leaking tap at the same place.. Get to do a "stealthy inspection" at the same time.

 

[grubar30]

Get to do a "stealthy inspection" at the same time.

Sneaky, but I like it...

That one's going in my tips and hints folder....



George

 

[House_Keeper]

A good PM is worth it. The problem is that not many PMs are good. It took me 3 PMs until I found somebody who was able to do a professional job with a minimum of due dilligence.

If you're going to get a PM, make sure you spent enough time verifying that they are able to do a professional job.

Cheers,

 

[Puppeteer]

One thing that hasn't been mentioned, is that you will likely find it hard to get landlords insurance unless your property is mangaged by a PM.

I have one good property manager, and one that is pretty average. The average one will soon be an ex manager as I look around for a new one.

 

[Rixter]

One thing that hasn't been mentioned, is that you will likely find it hard to get landlords insurance unless your property is mangaged by a PM.

I have one good property manager, and one that is pretty average. The average one will soon be an ex manager as I look around for a new one.

Maybe get the good one to take over the average ones work

 

[Kiwi Investor]

Hi Dunc, what is a 'stealthy inspection' ??

Would this be like the police doing a search without a warrant ??