New to IP - What to do when tenant requests repairs

[DennisLeung]

Hi guys,

I'm a bit new to this property investment area and was wondering how you guys deal with requests to fix things in your property that are broken, particularly those who have properties hundreds of kilometres away. Just got an email from the RE agent who states that the lights are not working in the living room and they have just bought new bulbs. This is despite us organising a family member (who is not an electrician) to go and fix it up a few weeks ago (was working before we left). In another incident the tenant reported the shower was not producing hot water, so we called our own plumber only to find that the tenants had replaced the showerhead that came with the building with their own and it was their own showerhead that was faulty. In that case the PM advised that we should ask the tenants to pay half the cost of the plumber but we did not pass on the cost.

How do you usually respond to these kinds of requests. Is your first reaction to go and inspect the property itself to get an idea of what the fault actually is even if you have no idea about fixing the problem or do you just rely on the PM to organise an electrician or plumber?

 

[Spades]

Hi Dennis,
If it's old fusing and hasn't been updated,it might be something as simple as a fuse blown in the meter box or fuse box inside.
If it's a blown fuse,turn off main switch and replace with fuse wire.
Could you get your family member to go and have a look?
Just a suggestion,
Cheers Spades.
Ps.Sounds like a blown fuse but i could be wrong.

 

[BRUTE]

Let your pm do their job and allow them to organize tradesmen, ensure that it is clear that if it is their fault, ie: the showerhead, they will bare the cost not you.

 

[womble66]

I have a maintenance clause added in my lease for my IP:

MAINTENANCE CLAUSE:
Where the tenant reports that a repair is required to the premises, the tenant agrees to reimburse the landlord for any service call fee charged by the tradesman where it is found that no repair is necessary. The landlord also reserves the right to invoice tenants for any repairs which were the result of tenant negligence or beyond normal wear and tear,

Based on this clause I would have invoiced my tenant as they were negligent in not advising of or installing a unserviceable shower head.

One word of advice however when it comes to electrical issues always use a licenced tradesman so you have insurance coverage and warranty comeback if they dont fix the issue. For thesake of a service fee its just worth the risk if the underlying issue becomes a major problem.

 

[norwoodman]

If you've got a PM, then your tenants should be in contact with them. Most PMs have a list of preferred tradies on hand for contact to deal with the plumbing, electrical and other maintenance issues. There is a reason why you have a PM and this is one of them!

 

[fisherman]

You do get a little cynical about naive office bound PMs whose response to everything is either to flick an email to the owner or holler for a tradesman, "I am much too busy for that etc.".

Perhaps some PMs have yet to manage their own home. Because after calls for tradesmen for blocked sinks from fat, blocked shower drains from human hair and tripping earth leakage from the tenant's suss appliances and overloaded powerpoints, an owner is entitled to wonder what property management s/he is paying for.

Good PMs have relevant practical life experience and exercise judgement before concluding that trades are needed.

Oh for the days when a PM chose to visit and check where a tradesman was demanded by the tenant.

I question whether the current business model for property management is sustainable. It might work to pay for the operation of the REA's office, but it is likely not sustainable for property owners.

 

[wylie]

You do get a little cynical about naive office bound PMs whose response to everything is either to flick an email to the owner or holler for a tradesman, "I am much too busy for that etc.".

Perhaps some PMs have yet to manage their own home. Because after calls for tradesmen for blocked sinks from fat, blocked shower drains from human hair and tripping earth leakage from the tenant's suss appliances and overloaded powerpoints, an owner is entitled to wonder what property management s/he is paying for.

Good PMs have relevant practical life experience and exercise judgement before concluding that trades are needed.

Oh for the days when a PM chose to visit and check where a tradesman was demanded by the tenant.

This is why we have saved thousands of dollars by being able to go to the IP ourselves, see what is "really" the problem and either fix it ourselves or get in our own tradies. It is not everyone's cup of tea, but something we enjoy being able to do.

 

[fisherman]

Wylie,

To be frank, the best property management we ever had and it was in a difficult area too, was when we engaged a previous tenant who had a successful debt collection business to collect the rent. We did the rest.

We paid a similar fee as charged by REAs for property management. The debt collection agency always said we were overpaying, but we never experienced any tenant problems for the years it was managed that way.

Perhaps there is an alternative model for property management in there somewhere

 

[xanh]

Although it may be a pain in the short term, I think it pays to find the tradies yourself. PMs don't really care if they are expensive or not and will always tell you their tradie is 'pretty good'.

My PM arranged a quote for a certain company to trim a hedge out the front of one of my IPs. The quote was $660! The PM thought this was reasonable. Needless to say, I didn't go ahead with it and instead went ahead with a quote that I arranged for $100.

 

[fisherman]

Although it may be a pain in the short term, I think it pays to find the tradies yourself. PMs don't really care if they are expensive or not and will always tell you their tradie is 'pretty good'.

My PM arranged a quote for a certain company to trim a hedge out the front of one of my IPs. The quote was $660! The PM thought this was reasonable. Needless to say, I didn't go ahead with it and instead went ahead with a quote that I arranged for $100.

REAs do themselves and owners a disfavour hiring young women on their personality and presentation, when it is relevant practical life experience, attention to detail and sober judgement that are essential for successful performance of the job.

If they want a receptionist for sales by all means get one, but don't put her into property management where it is beyond her personal skill set.

 

[BeYourOwnAgent]

REAs do themselves and owners a disfavour hiring young women on their personality and presentation, when it is relevant practical life experience, attention to detail and sober judgement that are essential for successful performance of the job.

If they want a receptionist for sales by all means get one, but don't put her into property management where it is beyond her personal skill set.

^^^ This is because most agency principals want it all in a nice little package.

They want the analytical and organisational skills, but they also want it in a nice package with sales skills to secure new business, which generally doesn't work.

 

[BeYourOwnAgent]

Perhaps some PMs have yet to manage their own home. Because after calls for tradesmen for blocked sinks from fat, blocked shower drains from human hair and tripping earth leakage from the tenant's suss appliances and overloaded powerpoints, an owner is entitled to wonder what property management s/he is paying for.

/QUOTE]

Over the 6 years I ran my own agency, I employed a total of 15+ separate property managers.

Not a single one had their own investment property.

I also employed 3 sales agents, and none of them had investment properties.

I would argue that a very, very small % of PM's have an investment property, and I think it is definitely to their detriment.

I would personally love to conduct a survey to see what the actual number is (of PM's with investment properties) ... just haven't figure out a good way to do it yet!

 

[Perp]

ensure that it is clear that if it is their fault, ie: the showerhead, they will bare the cost not you.

If you mean the PM, I doubt any agency would agree for this to be a clause in the agency agreement, but you can try. If you mean the tenant, like womble66 has suggested, at a minimum it would have to be in the lease, and even then, I wonder whether that would hold up at Tribunal. Anybody tested that one?

You do get a little cynical about naive office bound PMs whose response to everything is either to flick an email to the owner or holler for a tradesman

Amen, brother! (Or sister!)

I've invested a significant amount of time training my PM to ask the tenant questions.

Don't tell me "broken light" - that's so vague as to be useless. Has the tenant tried a different light bulb? Are they sure they have the right switch (if they've not used this light before)? Have they checked the circuit board for tripped switches? If the light fitting is actually "broken", is there something physically broken by impact (if so, how?), or does it look OK but simply isn't providing power to the globe?

After being deluged with a list of questions like this from me every time a repair is requested, she's now learned to ask most of the obvious questions herself. Particularly as I found that more than 50% of repair requests were withdrawn following my more detailed list of questions.

 

[BeYourOwnAgent]

I've invested a significant amount of time training my PM to ask the tenant questions.

God this rubs me the wrong way (not you, rather your PM!). Paying a significant portion of your rent to a PM to manage the property, and then having to invest time training them to ask simple questions.

*slaps head*

 

[fokas]

I would argue that a very, very small % of PM's have an investment property, and I think it is definitely to their detriment.

Why's that?

 

[BeYourOwnAgent]

Why's that?

For one they don't appreciate that calling a tradie out without investigating can often cost money that didn't need to be spent. To them, it's just one of the things associated with having an IP.

As a landlord, you want to make sure that every dollar you spend is for the right reason, as it correlates to your yearly cash flow position.

When you are a landlord, you appreciate how important it is to keep your tenants on side; if you forge a good relationship through great communication etc, it makes a huge difference. A PM who doesn't have their own investment can't really understand this, and again this can be to the detriment of the relationship.

If you own an investment, and you are a PM, you know what you would expect and how you would want your own property to be managed, and this would transfer over to the way you manage the expectations of your clients.

Yes you can do the job without having your own IP, but I definitely think being a landlord arms you with a greater understanding, and also the experience to better cater to your clients wants and needs.

 

[Perp]

God this rubs me the wrong way (not you, rather your PM!). Paying a significant portion of your rent to a PM to manage the property, and then having to invest time training them to ask simple questions.

*slaps head*

Oh, I hear you. Drives me up the wall. And then you've just got them trained, and they have staff change, and you have to start over...

Why's that?

What BYOA said, plus, they often really don't have a clue about the cashflow.

One of my PMs suggested replacing a fairly large item a few years ago, and I said that I didn't think we could afford to do it immediately (it was sub-optimal but functioning). She responded, "oh, it's OK, I've done the maths and the month's rent would just cover it, so you wouldn't have to 'put in' any money".

I said "yes, but we still have to pay the mortgage". It turned out that apparently she had thought all the money the agency deposited in our account was "pure profit", and like "extra spending money" or something.

When she found that not only was the ginormous freaking mortgage more than the gross rental income before any expenses, she was aghast.

*double facepalm*

 

[BeYourOwnAgent]

Oh, I hear you. Drives me up the wall. And then you've just got them trained, and they have staff change, and you have to start over...

What BYOA said, plus, they often really don't have a clue about the cashflow.

One of my PMs suggested replacing a fairly large item a few years ago, and I said that I didn't think we could afford to do it immediately (it was sub-optimal but functioning). She responded, "oh, it's OK, I've done the maths and the month's rent would just cover it, so you wouldn't have to 'put in' any money".

I said "yes, but we still have to pay the mortgage". It turned out that apparently she had thought all the money the agency deposited in our account was "pure profit", and like "extra spending money" or something.

When she found that not only was the ginormous freaking mortgage more than the gross rental income before any expenses, she was aghast.

*double facepalm*

You want to know the scary thing? That PM is probably managing around 150 properties.

Let's be super conservative and assume the value of each property is $300,000 - that equates to a $45,000,000 portfolio ... and she didn't even have a basic understanding on how things worked. *triple facepalm*

 

[wylie]

You want to know the scary thing? That PM is probably managing around 150 properties.

I'd be keen to know how your own staff went in this regard? Did you have any landlords having to manage your staff? Any landlords unhappy with the way your office was run or the service (or lack of)?

Without seeming to be antagonistic, but there don't seem to be many posters on here who have NOT had issues with having to manage the PM or who are frustrated with their PMs.