It’s no secret that the majority of landlords are often less than satisfied with the level of service and support that they receive from their property management team.
In 2012, overall satisfaction levels for landlords dealing with the property management industry were lower than ever, and it’s easy to see why; with rental arrears seldom followed up, inspections completed rarely, if at all, questionable paperwork practices and non-compliance with notice requirements among the list of the most common complaints.
In most cases, it may come down to a simple lack of commitment; for the overwhelming majority of property investment companies, more than 80% of total profits come from property sales, which means that rental management is low on the list of their overall priorities. It stands to reason that sales jobs within a property management company are the most coveted, leaving the most junior staff members responsible for the rental management obligations.
Unless the property management company was chosen based solely on their commitment to the rental market, or they have specialized and experienced rental experts on the team, it’s likely that the property manager in charge of your investment is an entry level staff member, on an entry level wage, with more properties to manage than is possible to take care of adequately, and no financial incentive to do a better job.
Having an inattentive property manager can be a frustrating prospect, but beyond the frustration of a company that doesn’t offer a timely response to enquiries, or doesn’t provide the right kind of support, is the risk of getting caught out financially because the agency isn’t paying sufficient attention to the tenants.
It’s well documented that the further behind a tenant falls in rental fees, the more difficult it will be for them to get back on top of the payments. The fewer inspections taking the place, the more likely it is that damage or cleanliness issues will go unnoticed. Additionally, it’s a safe bet that if the landlord isn’t feeling supported by the property management company, it’s more than likely that the tenant won’t be either, which could result in higher tenant turnover and could even be damaging to your personal or business reputation.
With trust among landlords and property management companies at all-time low, and the number of landlord complaints at an all-time high, the Real Estate Institute of South Australia recently called for more regulation and licensing of property managers; but with government departments already struggling to balance their limited resources, and current laws often unable to be satisfactorily enforced because of limits on staff, it raises some questions as to how the new regulations will be adequately policed.
With no fundamental changes to the property management structure in sight, and with so much at stake, savvy investors are taking matters into their own hands. More and more property investors are learning that it’s better to outsource some of the property management responsibilities while retaining overall control of their investments.
According to Mark Woschnak, CEO of rent.com.au, 40% of current rental properties are listed by non-agents, compared with only 5% of homes for sale; and that number is increasing all the time.
More people are renting than ever before, and that level of demand allows private landlords to make the most of market conditions, while enjoying freedom from dealing with a less than stellar property management company. Specific tasks like screening prospective tenants, inspections and rent collection can be easily outsourced to professional personnel on market-competitive terms, and can save hundreds, if not thousands, of dollars a year, not to mention your sanity.