A rental property is an investment. You put the time and effort in order to see results. Obviously rentals require active management to keep tenants, tenancies and the properties themselves in line. So, ask yourself, would you prefer to be that person or is it worth putting your rental in the hands of a professional property manager?
Finding tenants
You’ve bought an investment property, renovated it, and it’s ready for tenants. How do you go about finding them? You can place an ad in the paper, perhaps another one on TradeMe, but what then? In some areas
you might struggle to generate interest, particularly if you're new to marketing property or if there's a drop in the demand for rentals .
On the other hand, you might be swamped by calls for more information, requests to visit the property, and
then face the prospect of sorting through hundreds of applications to find suitable tenants. Do you have the
time to take all of those calls, sort through applications, and walk people through your rental property?
That’s a lot of time and effort before you’ve even begun to reap the rewards of a rental property. By managing it
yourself, yes, you know exactly who is going in and who you’re handing over the keys of your investment to, but
are they as they appear?
Tenant screening
Professional property managers usually include vetting and background checks on potential tenants as standard. It’s their priority to find someone who doesn’t cause trouble, pays their rent on time and will take care of the place. When in some cases you might be handing over the keys to your retirement, you want to be as sure as you can about the person you’re handing them to.
A standard vetting process should include following up with referees, credit history, employment history,
criminal background checks, prior Tenancy Tribunal hearings, verifying identities and confirming the
potential tenants are who they claim to be.
Property management agencies will often share information with each other if they’ve been burned by someone in the past, and some background check databases are only available to licensed property managers. If you’re not used to investigating people it may be easy to miss something
It’s a lot to sort through and can be very time consuming. A property manager might be able to remove some of the guesswork around their history and character to help you make a better decision of who to rent to.
Knowledge and experience
By managing your own rental property you know exactly what is going on. You have control over the inspections, the maintenance and you know what needs to be done and the best way to deal with it. You also build an understanding of the property market and learn what can and can't be done, but all this takes time. For example, you can increase rent, provided what you're intending to charge is inline with the lease and legislation of your area. Unfortunately, as a new landlord "you don't know, what you don't know", which can lead to fines and penalties if you make a mistake or misjudge a situation.
Not all property managers understand the value of good communication. Some will keep you up-to-date with each and every detail, others will give you a broad overview, and some struggle to answer the phone or reply to emails. A good property manager should keep you as updated as you wish to be, and educate you on the market as well. It is in their best interest to keep you happy and get the maximum return for your property. On the other hand, if you’re not overly interested in understanding the market or being involved in your property, a good agent can take care of everything for you without you needing to worry.
Perhaps there’s more to managing a rental property than you first believed? At the end of the day, time is the most valuable asset you have and there’s not much point in owning property and gathering a passive income if you’re not able to enjoy it.
Worried about letting your home to untrustworthy tenants? Our free guide can help:
