Most people don't invest in property to lose money. Unfortunately, when you choose a bad property manager, that's exactly what can happen! Below we'll look at three of the common consequences of selecting a lousy PM.
Nightmare Tenants
We all want that dream tenant for our property - the tenant who keeps the floors so clean you can eat your lunch off them, who pays rent so far in advance the agent has to tell them to stop, the tenant who takes as much pride in their home as you do.
Unfortunately, the opposite of a dream tenant lurks out there in the rental market - the nightmare tenant. This type of tenant can cost you a bomb and, is often the result of choosing a bad property manager.
Why blame a bad property manager? It's because the property manager is the one who should be conducting proper checks and screening processes to weed out nightmare applicants. This process includes:
- Conducting TICA checks
- Researching applicants' rental histories,
- Requesting rental references
- Assessing the affordability of the rental based on the applicants' finances.
A nightmare tenant can cost you thousands of dollars in rental arrears if they skip out. And they can cost you even more if they choose to damage your property. In some cases, the repair bills landlords face climb into the tens of thousands.
Not only can you be slugged with massive repair costs, but depending on the level of damage, your property could then be off the market for a significant period while you restore it to renting condition.
Find out how to choose a great real estate agent who will take care of your investment and provide you with peace of mind.
Blown Out Maintenance Costs and Unnecessary Property Damage
Bad property managers can damage your investment directly with their poor service delivery. Let's look at two examples below:
- Lazy Periodic Inspections - this is where a bad property manager misses or completely ignores tell-tale signs that maintenance is required. Perhaps the paint or wallpaper is starting to peel off a wall in the bathroom. This could be an early indicator of a plumbing leak which, if left untreated, could result in significant water damage to the property not to mention the property being un-rentable for a period!
- Poor Contractor Management - unfortunately not every tradesperson is reliable, honest, and skilled at their job. A bad property manager doesn't take the time to secure quality contractors at fair prices. What this means for owners is a) shonky repairs and maintenance which can detract from property values and/or b) over-expenditure on over-priced tradespeople which reduces the owners' ROI.
Zero Rental Increase
Part of the fee you pay a property manager covers the time and effort it takes for them to secure rental increases (where warranted by the market of course). A lazy property manager may not be so focussed on increasing your return on investment as they are on reducing their own workload! Because implementing rental increases takes work.
Initially this work involves market research to determine vacancy rates and rental rates on comparable properties. Then, if a property manager implements a rental increase, there is always the risk the existing tenants will decide the increase represents grounds for moving out. For a lazy agent this is bad news; advertising for new tenants, selecting new tenants and installing new tenants takes considerable time and effort!
A good agent on the other hand recognises that although a justifiable rental increase may result in a property being vacant for a short time, in the long run, their client (you, the owner) will benefit.
At OKG we are committed to caring for your property like it's our own. Contact us today to find out how we'll protect your investment.