Property Managers are melting under the glare of the media spotlight at the moment. It seems every media content provider has got it in for the property management industry. However, the environment in which a rental property operates is changing very quickly.
The Government is making big changes to the Residential Tenancies Act. You’ll find out a bit more on those changes in a previous blog, and these changes are going to do more than just push rents up and disadvantage the very people (sorry, voters) that Labour is trying to help.
The landlord that does not keep up with these changes and make the necessary moves to comply with these new laws is going to get into a bit of strife. I predict that at least one landlord is going to get nailed to a tree for not following the new rules, one way or another.
With that in mind, I’d like to address something that’s plagued property management for all the years I’ve been doing it. There are a lot of popular misconceptions with property management and I’d like to clarify just nine of the most obvious ones for you.
Property Management is money for jam
Um, no. It’s not easy at all, and it certainly isn’t a “clipping-the-ticket” junket that some people would have you think. There are a lot of intelligent, dedicated property managers out there who love their jobs and do fantastic work on behalf of their owners and tenants. If you think we are “leeches” (thank you, Barry Soper) sucking the blood from the veins of the downtrodden, come and spend a day with a property manager and find out what we actually do for our valued Client Owners.
You can manage your rental from overseas
Actually, that’s illegal. If you’re a landlord and you leave New Zealand for a period longer than 21 days, you must appoint an agent to look after your rental. And don’t go thinking you can cover it with your good old mate from the rugby club who’s a bit handy with plumbing and repairs. Your appointed agent must also be a signatory on the Tenancy Agreement and the Bond form. Unless of course you intend to keep the bond in your own bank account, which is also illegal.
You can visit and enter your rental any time you want to
No you can’t. You have to give the appropriate notice to do this, and if you don’t, your tenants can take you to court and possibly get exemplary damages for you doing so.
You can kick your tenants out any time you want to
Again, no you can’t. For this you also have to give the appropriate notice.
You can keep the bond in your own bank account
That’s illegal too. I’m regularly surprised by owners who get me to take over their rental management (probably to go overseas) and I find that the Bond hasn’t been lodged with Tenancy Services and is in fact nestling in the owner’s bank account.
You can do all your own repairs and maintenance
You can, and there are two main watchwords if you want to keep doing this. The first is Health & Safety considerations. Your rental property is a PCBU under those regulations so you have to operate within that set of rules. If you don’t you could be up for a fine of as much as (drumroll……) $400,000!
The second reason is that insurance companies are tightening their policy wordings, and if you for example do a dodgy plumbing repair as an unqualified plumber and you end up flooding the rental property, they may not cover you for that expense.
You can store all your own stuff in the garage/basement/attic of your rental
Yes you can, but you can’t drop in on the property to grab any of your things without giving the proper notice to your tenants (see above). Also, again, your insurance company will most likely only cover your stuff for about six months if you’re lucky. Just don’t store the family antiques and artworks in your rental.
Looking after the place yourself is much cheaper
It is indeed, until something goes wrong. See all of the above.
You must have tenants on your books that would love this place
Not many property managers actually have “books”. None that I know of keep a ledger of prospective tenants, mainly because tenants find their own place to rent through channels like Trade Me, realestate.co.nz and homes.co.nz. The days of tenants leaving their details with a landlord and a property being matched up with them are long gone.
Don’t Be Frightened
I realise all this might seem a bit daunting. However, the days of the good old ‘Number 8 wire / she’ll be right’ style of property management is fast disappearing, and the Government is speeding that change along. If you need to know more, get in touch with me. After all, it’s what my team and I are best at.