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What are the ingredients to good property management?

Photo: Auckland apartment buildings by Jason Pratt

Property management, when performed well can make investing in property a real breeze but when managed poorly can leave landlords and tenants tearing their hair out.

Property management seems like the simplest of roles… so why is it so frustrating? Well the landlord has provided sole right to what is probably one of their largest assets so they need to deal with trust and transparency concerns. Tenants need to deal with uncertainty surrounding one of Maslow's most fundamental needs - a safe comfortable place to call home. Throw in an 3rd party such as an agent or management company who is looking to make money and you have an almost perfect recipe for dysfunction and frustration.

Let's start by looking at some of the typical problems:

  • Slack systems or processes with poor record keeping so tasks end up forgotten and/or in a mess. Typically seen in: Self-Managed
  • Frustration at paying high fees for what appears to be a super simple task and then having to get involved every time something goes wrong anyway. Typically seen in: Professionally managed
  • Having to pay marked up prices on maintenance and other services - often these fees are not well disclosed. Typically seen in: Professionally managed
  • Lack of control and having decisions taken without you being consulted. Typically seen in: Professionally managed
  • Periodic nature of the work. Some months nothing to do and then the week you are busy or about to go away everything happens at once. Typically seen in: Self-managed
  • Frustrated tenants due to inaction or poor communication. Typically seen in: Both self-managed or professionally managed
  • Understanding and abiding by tenant and landlord rights and obligations. Typically seen in: Self-managed

From these problems, we can summarise 3 key components we need to have good management:
- Clear communication
- A well-built reliable consistent system that effectively solve problems
- Transparency and value for money

Communication

Communication is by far the most important of these components. The Chinese whispers and misunderstood intentions or preferences, which happen when landlords and tenants miscommunicated directly or through an agent, is the cause of the majority of tenancy frustrations. One of the most frustrating problems is an unresponsive tenant or landlord or, for a managed property, a property manager who is not clearly and promptly passing on information. Bad communication leads to distrust which can then lead to many other issues.

Most tenancy problems can be solved with good relationships and clear communication, too many landlords and tenants take an attitude of what I can get away with or what my minimum rights and obligations are. This can produce short term wins for either side but this approach and almost always works out on a low-quality tenancy for both sides and in the future the tone is set and when future or larger issues arise there is no basis to sit down and resolve it. Almost always when things end up at the tribunal it means both sides are going to lose in some way (even if they win in the tribunal).

Tenants and landlord can work together to create a win/win relationship where the tenant has a quality secure home and the landlord has a successful investment. There is no conflict in these objectives.

Systems

Great systems are the foundation of good property management. Having records, reminders, understanding the tenancy process and implementing them fairly and accurately. Great systems mean lower costs, better compliance, less leakage and lower risk. It should be the foundation of any property management service.

Having great systems is easier when you have 20 or more properties but they are just as important for a landlord with 1 or 2 properties. In fact, 1 property landlords have more risk than those with 10+ properties because there is a big difference in losing 100% of your income vs 10% if something goes wrong.

Value

For most landlords, their mortgage will be their biggest cost and a cost (if they have done their financial research wisely) they have very little ability to make a significant reduction in. For managed landlords, their second biggest cost will be their property management and for self-managed its usually loss of rent due to poor record keeping or high tenant turn over.

Value in property management is very subjective for each landlord and their property; and is usually a trade-off between spending 8.5% on a manager or spending time and managing it yourself. Finding a balance is usually the key

How myRent solves these issues

Communication
- Notifications for tenants and landlords for every rental payment so everyone is completely up-to-date and in control of their rent
- Maintenance issues logged with photos and videos so there is no confusion about the seriousness or scope of the problem
- Maintenance issues documented well enough so that in many cases a tradesman can give you feedback before a callout charge
- Simple Tenancy Agreement and Insulation Statement creation with e-signing to help landlords save time and stay compliant
- Automated bond lodgement with Tenancy Services
- Storage for all your tenancy documents
- Expense tracking, so no receipts are ever lost or misplaced
- Notifications with your options for renewing the tenancy
- One dashboard available 24/7 where you can see everything you need to know about each of your properties
- One place to find all the information about a tenancy that maybe required by your accountant, lawyer or other professional advisor

Systems
Our system is purposely built for NZ tenancies from the ground up by people who are landlords or tenants themselves. It's designed to be simple, compliant and accurate. We have used the latest in app and web technology to bring the service into the 21st century and ensure that your information in safe and convenient.

Value
$75 tenant find service and 1% property management.... need we say more? Find that balance between using time and spending money.

The information contained in this article is exclusively for promotional purposes. It does not in any way constitute legal advice and should not be relied upon as the basis for any legal action or contractual dealings. The information is not, and does not attempt to be, a comprehensive account of the relevant law in New Zealand. If you require legal advice you should seek independent legal counsel. myRent.co.nz does not accept any liability that may arise from the use of this information.

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