When you’ve just acquired an investment property, there are a couple of decisions you need to make. One is whether or not you’re going to go with a property manager or whether you’ll manage this yourself.
For those of you who are thinking – “why don’t I just manage this property myself? It’ll save me money as opposed to working with a property manager, and it sounds relatively straightforward” approach with caution – there can be many hidden risks that you’ll uncover along the way, which may cost you thousands.
In this article, we’ll discuss the most common property management mistakes that are often overlooked by landlords managing their own properties, with Lisa White and Amy Jordan from Haven Home Rentals – your residential property management specialists within Wellington.
Watch instead:
Mistake Number 1: Not Vetting Your Tenants Properly
Vetting is the action of examining someone to ensure they’re the right fit and suitable for your property. Are they in a secure job? Do they have pets? How long are they planning to stay? This can include
background checks, credit checks or reference checks. Essentially you want to ensure that you’re not just taking someone at face value, or what they look like on paper and then they turn out to be a lot less ideal than you were hoping for.
Handy Tips on Vetting:
- Ensure you meet the person face to face. First impressions really count.
- A Property Manager should also have a software subscription that allows them to do additional checks that aren’t available publicly.
- Give them a bit of a social media stalk as well if you’re still apprehensive
Mistake Number 2: Notice Periods
This can be a tough and costly lesson for a lot of landlords who manage their investment properties. Notice period rules can change quite frequently – particularly when a new government comes into power. The fines, or in some cases paying rent back, for not giving the correct notice periods to tenants can be extremely expensive, so Property Managers ensure they’re across notice period changes at all times to ensure you don’t end up in hot water with the tenancy tribunal.
Mistake Number 3: Not Knowing the Laws and Standards
Tenancy rules and property standards are forever evolving – not keeping up to date with these changes can mean a trip to the tenancy tribunal or expensive fines. A Property Manager’s job is to keep up to date with all of these changes and making changes to the tenancy agreement etc. when they are enforced, ensuring you don’t to worry about knowing the Healthy Homes Standards and Residential Tenancy Act etc. like the back of your hand.
Mistake Number 4: Renting Out to Someone You Know
When you’re renting out to someone you know, someone or who is having a tough time, or has a difficult living situation, this can be all well and good until something changes, say the relationship turns sour and you need to be the iron fist. If you think you can handle this, then absolutely rent out to someone that you know – particularly if you’re certain that they’re going to treat your property with care. However if you don’t think that you could handle it if things were to go wrong, then a Property Manager can act as a good buffer between you and the tenant and can have those hard conversations when/if it’s needed i.e. rent needing to be paid, cleaning that needs to be done etc.
Mistake Number 5: Not Anticipating for Time Spent on Property Issues
When you’re a landlord who is managing your own property, the chances are that you’ll also be working a part time or full time job. A common mistake is thinking that managing a property won’t take up too much of your time, which is a huge mistake. Issues with tenants and with the property i.e. things breaking and needing to be replaced, always arise and you’re going to have to be the one to fix them.
Handy Tips on Private Property Management:
- If you are wanting to manage the property yourself, get hub of tradies you can rely on that specialise in emergency repairs and have quick turnaround times for odd jobs you may have as chances are, you’ll need them more than you think!
Mistake Number 6: Thinking that Property Managers Cost a Bomb
Property Managers’ costs are usually around 7-9% of the rental income. If you have a rental property and the rent is $600 per week, that works out to be around $54 per week. They’re generally available 24/7 for emergencies and if you break it down in terms of cost per hour it is 0.32c per hour for a tonne of peace of mind.
If you’ve got a property in Wellington and are thinking it might be high time to engage with a Property Manager and get an appraisal, Haven Home Rentals cover all of Hutt Valley, Wainuiomata, out to Porirua and out to the Northern and Western suburbs. You can contact them via email or through their website as well.
