Are PM's worth it?

[Bargain Hunter]

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...

A tenant recently stopped paying rent. The PM went to the tribunal and although we won when the tribunal asked for proof of the increase in rent (some 60 or so months previous) the PM couldn't produce it. Therefore the tribunal allowed the tenant to put the extra payments they made over the period toward the outstanding rent and bond (the PM didn't even get a bond).

I have sent a letter to claim the $960 which is the shortfall for the period and the PM is saying that there is no proof that the increase was requested and therefore it was probably just a mistake in taking the extra amount each week.

I know no tenant who would pay more than they would agree to pay.

Anyway, when reviewing other properties held by this PM on our behalf we have discovered a number of discrepancies resulting in a further loss of around $513.

So a PM who has charged us over $5,000 to manage these properties over a three year period has lost us around $1,400 and can't understand why we would be asking them to make up for the shortfall.

Yes, we have every intention of changing PM's however we want to recoup the outstanding money. Is there an organisation we can take our complaint to????

This PM ought to be banned.

Regards


Andrew

 

[House_Keeper]

Yes, we have every intention of changing PM's however we want to recoup the outstanding money. Is there an organisation we can take our complaint to????

This PM ought to be banned.

Regards


Andrew

You can lodge a complaint with the department of fair trading.

Don't expect to get any money back through this process though.

Cheers,

 

[alexlee]

If your objective is to build a number of properties (which often involves buying interestate for diversification and land tax minimisation reasons) then you need to have PMs. Not all PMs are good, of course, so you might have to go through a few before you pick the right ones.

Also, PMs may give you some contacts regarding future property buys. I have a good PM in Queensland who referred me to a sales guy in her office. I haven't bought anything off him yet, but the info he's sent me so far has been very interesting: a few properties with plans for redevelopment. Other than that, my PMs give me some good info on rents in the area, effects of new developments, etc. They don't just volunteer the info, though: I have to ask them specifically.
Alex

 

[TheBacon]

You can lodge a complaint with the department of fair trading.

Don't expect to get any money back through this process though.

Cheers,

Can also make enquiries with the RE institute of your state. However, this is a club for r/e agents and all you will get is words - not actual help.

TB

 

[Puppeteer]

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

Average one is in Swan View

Good one is in Busselton. I don't think they'll wear the cost of inspections in their fixed rate for some reason

Just going back to the first post in this thread. If my property just hummed along for 12 months, then that is an indication that the property manager is doing their job properly. That's what I pay them for.

In terms of problems with PM - try talking to the Principal of the agency. Probably a bit late now, but make sure everything is in writing and that you have all your documentation organized. That way you can walk in and say "Well I have the request in writing, so pay up".

I've got money out of agencies before for repairs due to poor property management and signing off bonds when much damage was done. I always keep a complete set of photo's and do my own inspection of the property prior to handing it to a PM. I tell them right from day 1 that I expect the property to be in a similar condition when I get it back from them. I maintain the property and I have insurance for damage by the tenant. I ask the PM's and Principal what they would do in a few what-if's that I've experienced.

They usually write me down as "pedantic landlord" on their files. I like it that way.

 

[lizzie]

my pm sends me a copy of every piece of correspondence with tenants - that way there are two copies in case one goes missing.

 

[Jacque]

After some less than perfect experiences with both tenants and PM's, I now am a little anal about paperwork, authorised repairs in writing and inspection reports. Naturally, some of my PM's are better and more efficient than others too. This makes an enormous difference to both my time and my income

I like to be informed after every inspection, I have to authorise every repair (except unforseen emergencies) and I keep copies of ALL correspondence so that nothing goes "missing". In effect, I manage my managers. But that's how I like it It's not that I don't trust them- it's more that I like to know where I'm at with every property. I also maintain a diary specifically with reminders of inspections, new leases etc to remind myself of upcoming tasks. Perhaps I'm a control freak?!

 

[Fish]

Hi Guys,

I think that if you are going to self-manage, you've got to be prepared to do the work, research the area, and be anal / professional in your approach.
There are legalities attached with things like bonds, tenants rights, safety etc. You need to put the time in to know the field. If you haven't got the time or inclination to keep good records, study the field of PM'ing, then you may be setting yourself up for trouble, and headaches should things go bottom-up.

I suppose it boils down to time availability and whether you're that way inclined. Saving money is one thing, but unless you have the time or inclination to do it well...then perhaps the risks outweigh the rewards?
But for those who do take the challenge and do it well - they become educated in another aspect of investing.

Cheers
Fish

 

[wish-ga]

Tenant visited my husband's office yesterday and said that the gas stove is (cant remember exact description) playing up

The above was posted in a thread by Alanna. The tenant is showing up at her husband's work. When I hear things like that it makes me think that a PM is a good idea. Some people will be serial pests and you may be thankful of a buffer. I like the privacy aspect of having a PM.

 

[crest133]

Some of you "good judges of character" don't seem that good when it comes to picking PM's, but I guess tenants and PMs - the good ones and the bad ones - tend to say the same things when presenting themselves for assessment.

If I had enough properties in a portfolio, I would tend to self-manage the good properties because they tend to attract better tenants and require less maintenance and so are less labour intensive, and farm out the cheapies to a tough PM because they are labour intensive in both depts - maintenance and tenants. And if I had enough cheapies, and the PM had done a good job of protecting me, my properties and my expenses well during the year, I'd tip the PM personally (not the REA) $200 cash each Xmas. It'd be a spit in the ocean compared to the headaches and expenses a slack PM can let slip past them and allow to land in your lap.

It's OK to say don't keep a dog and bark yourself, but don't forget to look after the dog.

cheers
crest133

 

[duncan_m]

Some of you "good judges of character" don't seem that good when it comes to picking PM's, but I guess tenants and PMs - the good ones and the bad ones - tend to say the same things when presenting themselves for assessment.

Crest the main problem is the transcience within the industry.. you pick an Agency based on the initial PM who makes the 'sales call' to you.. 18months later that PM leaves.. or you engage the Agency only to find that the receptionist at the Office and the Junior PM's are the ones doing the day to day to work..

 

[goddessk]

I like to be informed after every inspection, I have to authorise every repair (except unforseen emergencies) and I keep copies of ALL correspondence so that nothing goes "missing". In effect, I manage my managers. But that's how I like it It's not that I don't trust them- it's more that I like to know where I'm at with every property. I also maintain a diary specifically with reminders of inspections, new leases etc to remind myself of upcoming tasks. Perhaps I'm a control freak?!

Jacque, I'm with you. I know I am definitely a control freak however I have had to relax a bit with my paranoia on wanting everything on time as they just don't seem to care. I have been requesting keys for my first property for over a month now (4 hours away from me and I didn't attend settlement) and every copy of all paperwork (which I am still waiting for). I will ring the principle next, as I did last time when they lost my keys and wanted me to pay to replace them.

The PM on my new property was asking me whether I thought that the rent should be increased by $20. When I suggested that given I have purchased the property site unseen (except through photos - it's interstate) and that I would like her to go and look at it and advise me whether she thinks it would re-rent easily if the existing tenant balked at a $20 increase (hasn't actually even settled yet), she sounded surprised. Goodness knows I don't want to be greedy and scare a perfectly good tenant away and risk not having a tenant for weeks. Some advice wouldn't have hurt. Holy moly, what do you have to do to get the job done properly?

Anyway, thanks everyone for your responses. There is some interesting reading here. I think I will maintain the use of a PM however I think their work leaves a lot to be desired. Let's hope it gets better from here on in.

 

[Whatever]

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

For my 2 cents, I use a PM and just look forward to a monthly email rent statement and a direct deposit into my bank account. As others have said, when its all ticking along perfectly you probably ask "'why am I paying this PM 7-8% or whatever"'. Its when things get difficult with the IP and at the same time you are having issues at home and stress with your full time job that you realise thats why I'm paying a PM fee.- you just expect them to handle it. From what I have read here there are heaps of bad/slack PM's out there... I have had experience with a slack one, but not a bad PM combined with a nightmare tennant.. thats probably deserving of another thread....

regards,


Paul

 

[Jacque]

Drawing conclusions from the commonalities expressed in this thread, I think we all agree on a few points when it comes to using PM's:

1. Good PM's aren't easy to find and keep
2. Clear and ongoing communication is the key to a good ongoing working relationship between landlords and PM's
3. It's important to still keep tabs on your PM and manage the relationship
4. PM's can provide that all important distance and privacy between you and the tenant
5. If electing to go down the self-managing path, know the legislation and processes required thoroughly

 

[Dazz]

Drawing conclusions from the commonalities expressed in this thread, I think we all agree on a few points when it comes to using PM's:

1. Good PM's aren't easy to find and keep
2. Clear and ongoing communication is the key to a good ongoing working relationship between landlords and PM's
3. It's important to still keep tabs on your PM and manage the relationship
4. PM's can provide that all important distance and privacy between you and the tenant
5. If electing to go down the self-managing path, know the legislation and processes required thoroughly

1. Agreed, but then if you spend more time finding good cashed up reliable tenants the need for a PM is severely reduced.

2. Agreed, but then you are 'working' your buffer. Why not just substitute the word tenant for PM ??

3. Once again, introducing the 3rd party involves another layer of everything, which costs you money.

4. If you have chosen wisely and signed up a fantastic tenant there is no need for distance and privacy. Depends on your tenant of course. If your tenant is a poorly paid labourer with 5 dependents....yes, you may have a point. If your tenant "point of contact" is the CFO of a large organisation and the organisation is the tenant...then no, you do not have a point.

5. The legislation for the residential side of things is a doddle. Anyone who's done a Uni course of any description could pass standing on their heads. 18 yr old numpties with zero experience pass the exam to qualify as a PM over the course of 1 WEEK....with an exam on the following Monday. My wife has done the course, and having got up at 3am and tested her with every question and every law....it's very very easy. Studied 6 hours....got 98%. I'm not taking anything away from my wife, but it ain't hard. But then the RTA only deals with the minor ressy stuff. The really good stuff is a totally different ball of wax.

 

[Rixter]

1. Agreed, but then if you spend more time finding good cashed up reliable tenants the need for a PM is severely reduced.

2. Agreed, but then you are 'working' your buffer. Why not just substitute the word tenant for PM ??

3. Once again, introducing the 3rd party involves another layer of everything, which costs you money.

4. If you have chosen wisely and signed up a fantastic tenant there is no need for distance and privacy. Depends on your tenant of course. If your tenant is a poorly paid labourer with 5 dependents....yes, you may have a point. If your tenant "point of contact" is the CFO of a large organisation and the organisation is the tenant...then no, you do not have a point.

5. The legislation for the residential side of things is a doddle. Anyone who's done a Uni course of any description could pass standing on their heads. 18 yr old numpties with zero experience pass the exam to qualify as a PM over the course of 1 WEEK....with an exam on the following Monday. My wife has done the course, and having got up at 3am and tested her with every question and every law....it's very very easy. Studied 6 hours....got 98%. I'm not taking anything away from my wife, but it ain't hard. But then the RTA only deals with the minor ressy stuff. The really good stuff is a totally different ball of wax.

IMHO, Its not a matter of if its hard, easy, right or wrong way. Its more what the individual investors personal preference and time contraints are which dictates the best option for themselves.

 

[Dazz]

IMHO, Its not a matter of if its hard, easy, right or wrong way. Its more what the individual investors personal preference and time contraints are which dictates the best option for themselves.

I disagree. What's wrong with taking the easy right way. Why contemplate the hard wrong way ??

Trouble is, your HO doesn't address the issue being discussed at all.

What you have stated could be tacked on as a non-descript to any and all thread discussions. It adds nothing. It is such a vague generalist statement that it is about as useful as "seek independent legal advice" and "consult an adviser for your particular circumstances", all very true and very correct....but what specifically do you take from those statements. They belong at the footer of a lawyer or FA comment trying to dodge responsibility / liability, not a specific discussion / banter about whether a "PM is worth it"....

 

[Rixter]

I disagree. What's wrong with taking the easy right way. Why contemplate the hard wrong way ??

Trouble is, your HO doesn't address the issue being discussed at all.

What you have stated could be tacked on as a non-descript to any and all thread discussions. It adds nothing. It is such a vague generalist statement that it is about as useful as "seek independent legal advice" and "consult an adviser for your particular circumstances", all very true and very correct....but what specifically do you take from those statements. They belong at the footer of a lawyer or FA comment trying to dodge responsibility / liability, not a specific discussion / banter about whether a "PM is worth it"....

Thats just your oppinion - the same as I've already stated that what I've said was my oppinion!

What you regard as being "easy way" may be regarded as being "the wrong way" for someone else, purely because we all have different risk profiles, needs/desires nd timeframes. Its ones perception of theses that determines their personal preferences.. Trouble is not everyone holds the same perception as you, me or anyone else for that matter.

Maybe its just my perception of what you're trying to say here. Are you stating otherwise - that what you state is the "be all and end all" on the topic

 

[Dazz]

Maybe its just my perception of what you're trying to say here. Are you stating otherwise

Mate, you can perceive / believe / feel / interpret anything your little heart desires. Knock yourself out...going round and round in circles wordsmithing whatever you want whenever you want.

I'm not trying to state anything. What I wrote on the particular subject is very clear and unambiguous, and I stand by it 100%. If you are confused in any way, try taking a deep breathe and sitting down for a rest....your muddled confusion might just clear. Have a great day.

 

[lizzie]

actually dazzling - i don't have a clue what you mean either. very wordy, doesn't mean anything and not useful in the slightest to this thread.

at least rixter was summing up the consenseus of this thread - what works for some doesn't work for others. he is suggesting that one take all the info offered and make you own informed decision.

i for one love my pm - everything runs smoothly 95% of the time, but that other 5% is worth every cent i pay her. duncan has the complete opposite experience - both of us are happy with our choices. neither is wrong/right or hard/easy, just different and suiting our own circumstances.

each to their own.

go rixter!