When things go pear-shaped - the true value of a property manager
Collect the rent, inspect the home occasionally…how hard could it be to manage your own investment property?
If everything goes ultra-smoothly, perhaps you could. But how often is life that simple? As with so many things, the true value of a property manager comes out when things get tricky.
As Arti Delaney, Team Leader at Independent Property Management says: “You’re paying for our knowledge, and our ability to handle hard situations. We know the legislation and we know the steps to take to resolve a problem.”
We asked Arti to run us through some of the common complaints she might hear from a landlord, and how her expert team would resolve them.
My tenant has stopped paying rent
“If your tenant isn’t paying their rent, there are specific steps you need to take. A private landlord can take the tenant to ACAT (the ACT Civil & Administrative Tribunal), but if they haven’t followed procedure, they probably won’t get the outcome they’re looking for,” says Arti.
First things first: how long would it take you to notice your tenant hadn’t paid? If you’re like most people, you probably check your bank statements monthly, or when a payment bounces. But by then, you might already be behind the eight ball.
“We have an established arrears management procedure,” Arti says. “We print off daily reports so that we can see as soon as someone is in arrears. If it gets to the 4-day mark, we’ll give the tenant a call. If it gets to 8 days, we’ll issue the official Notice to Remedy.”
If the tenant still doesn’t pay after that, it’s off to ACAT for a Notice to Vacate.
“The faster you deal with the situation, the better. A landlord can ask for the rental arrears to be paid, but a tenant who isn’t paying their rent probably doesn’t have the money to pay back what they owe. If you let it drag on for months, that’s months of rent you’ll never see again.”
My tenant won’t leave the premises
There are a few reasons why you might want your tenant to move out. Nuisance, non-payment of rent, or simply because you want the property to be available.
How you deal with the situation is key.
“We had one tenant in an apartment complex who was playing very loud music in the early hours of the morning. We had complaints from the strata manager,” remembers Arti. “We gave him a verbal warning first, to give him a chance to remedy the problem. He refused, so we sought instructions from the landlord and then issued a written Notice to Remedy and finally a Notice to Vacate.”
Arti estimates that the whole process took a couple of months.
By contrast, a private landlord of her acquaintance has been waiting for his tenant to leave for the past six months. “He gave the tenant a Notice to Vacate back in October, with a generous notice period in accordance with the lease agreement. The tenant immediately stopped paying rent but refused to budge. The landlord doesn’t want to pay the fee to go to ACAT, so he’s just trying to wait it out. Meanwhile, there’s no rental income coming in, the arrears are racking up, and he can’t rent the property to anyone else.”
My tenant won’t let me inspect the premises
“This comes up a lot,” says Arti. “It was especially common during the COVID-19 pandemic because tenants were wary of possible infection. But it’s always an issue. Especially if there’s already a tarnished relationship between tenant and landlord, they do refuse to let us in.”
As a landlord, you have to give your tenant the right to ‘quiet enjoyment, which means that you can’t just turn up and demand entry.
“This is another area where we have to be very careful that we’re following the correct procedure so that we’re complying with the legislation,” says Arti. “The first step is a letter that gives them 7 days' notice of an inspection. If they still refuse, we can go to ACAT and get an access order."
My tenant wants an emergency repair
Your tenant rings up on a Sunday morning and tells you there’s a plumbing emergency. What do you do next?
“We see this from two sides,” explains Arti. “If something is a real emergency, you don’t want to risk leaving it until Monday and having the problem get worse. So you need to establish a way for tenants to take urgent action if they can’t get hold of you immediately. On the other hand, you don’t want to be paying emergency call-out rates on a weekend if you don’t have to.”
Property managers solve this problem in a couple of ways.
“What we recommend to all of our landlords is a system which empowers tenants to arrange for emergency repairs themselves. So if a hot water system fails on the weekend, they can call one of our approved plumbers and ask for advice. The tenant gets a checklist as part of their on-boarding information, which defines which repairs count as emergencies and which ones don’t. If it is an emergency, they can spend up to 5% of their usual rent on a repair and have that reimbursed.”
Those relationships also help landlords with proactive maintenance.
“What we see with private landlords is, they’re busy, they work full time, and it’s easy to put off maintenance problems until they become urgent. We’ll get professional advice from our trusted contractors, not just about emergency repairs but about future maintenance issues. For example, they’ll do a repair to a hot water system but also let us know that it’s 10 years old and will soon need to be replaced.”
My tenant isn’t taking care of the property
The other side of the coin is the tenant who doesn’t care for the property themselves. What tenants see as a bit of a harmless mess can cause real damage to your property. If the exhaust fan in the kitchen isn’t cleaned and degreased, it can clog, causing poor ventilation and grease stains on the walls. Dirt or gravel in the bottom tracks of a sliding door can cause it to stick or even break.
“This is a really delicate area,” says Arti, “because a lot of people see it as a criticism of their housekeeping skills. If it’s not handled well it can really damage the relationship between landlord and tenant. As a property manager, we’re a neutral party so it’s easier for us to deal with it.”
Not only can a property manager help resolve issues that crop up, but they’ll also reduce the chances of any issues happening in the first place. As Arti says:
“Prevention is 100 times better than cure. A lot of problems can be avoided just by vetting your tenants properly in the first place. A landlord might let someone move in because they’re a friend of a friend, so they don’t check references or financial history. Because we do a comprehensive check, we make sure that our landlords have great, reliable tenants and are far less likely to run into problems.”
For more information on Independent’s expert property management service, get in touch here.
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