A property investor has revealed to RPM some key things property managers do wrong – but what is the tipping point where you lose business?
When Jo Leditschke started receiving bills for unauthorised repairs, she realised something wasn’t right with her property management company.
“When I got a massive bill for an unauthorised repair in my letterbox, I knew that it was time to ditch my property manager. The constant turnover in staff and the lack of attention to detail had already put me on edge, and this was the tipping point.
It turned out that the tenant in my [suburban Melbourne] Elwood apartment had been calling the property manager for weeks and weeks, with no reply. Growing frustrated at the lack of response, and with the property in urgent need of repair, they decided to go ahead and instigate the work themselves. They didn’t go through the quote process, and as a result the work was performed at far greater expense than it would have been if the property manager was doing their job properly.
I understood the tenant’s frustration completely – the property manager hadn’t been returning my calls either.
I knew that I wanted to grow the portfolio further and I didn’t want to risk losing any more of my rental yield on other people’s stupid mistakes. So I decided to take over the management of my two properties.
Almost 15 years later, and with five properties to my name, I haven’t looked back. That’s not to say that self-management is a breeze by any stretch of the imagination. Being on call 24/7 can be trying. Having to plan endless open for inspections, when demand for apartments in Melbourne dips, is frustrating. You also need to have all of your properties in close proximity, which will rule it out for many interstate investors.
Self-management is definitely not for those who shy away from hard work. It’s something which is definitely suited to certain personality types. You have to ring around and organise tradespeople, form a good relationship with your tenants and be prepared to conduct condition reports.
But for me, the benefits far outweigh the negatives. In a tight yield market such as Melbourne, saving on management fees can be the difference between a positive and negative return. Sourcing tenants has become so much easier in the digital age. I use several websites to list my properties when they become vacant. Meeting tenants from the very first time they step foot in the house also affords you a sense of control over your assets that you would never experience through a property manager.”