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The 3 Biggest, Nastiest, And Most Expensive Mistakes Property Owners Make When Considering Changing Property Managers…
Costly Townsville Property Management Mistake Number One:
It is hard/difficult/stressful to change agents.
The signs have been there – possibly for years. The reasons you chose your property manager might have been decayed by one example of waste after another. You have turned a blind eye to how long it takes for your property to get new tenants, to how you only ever seem to talk with “assistant property managers” who seem to be just out of high school, and to how it has become accepted that arrears, being out of lease, and vacant properties are “acceptable”.
Like pulling out a splinter – Waiting does not help
Deep down you know that it is time to move to a new manager. But. Isn’t it sort of messy? Is there going to be a lot of fuss and ill-feeling? Often owners put up with far more poor service for far too long – because they think that changing agents is tough.
And this is one of main reasons that agents with poor service and inadequate systems continue to be in business. Property owners simply refuse to change – until finally it is one straw too many. Owners “put up with it” – because they mistakenly believe it is hard to change agents.
Here is the first reality
Poor managers lose listings all the time. As a landlord You just don’t hear about it. They expect it, and when they lose a listing they hardly notice.
There is not usually any angst, or fuss, and the transfer usually goes without drama.
The Second Reality
The second reality is that the transfer to a new agent is completed by signing just 2 simple documents. That’s it. It’s that easy. There is no fuss, no scene. Your new manager politely contacts the old one, they send some files, done.
Did you know that the transfer to a new agent is completed by signing just 2 Documents???
Most professional agents provide a FREE transfer service and take care of all the details including transferring bonds and rental payments. Easy peasy!
There is no requirement for you to lift a finger, your new agent will contact your old agent and organise everything for you.
Costly Townsville Property Management Mistake Number Two:
Its best to change property managers at the end of a lease or when the property is vacant.
So, once you know that it is time to change property managers – when is the best time to take action?
Many owners believe they should wait until the end of a lease or when a property next becomes vacant to change agents.
There are a couple of reasons for this belief. One is that it is somehow simpler in terms of administration. As we saw above – the paperwork is almost the same whether there is a tenant in place or not. No real difference at all. And changing managers does not affect existing leases.
That’s right, your tenants lease will remain valid even if you change agents mid term. (In fact we find that most tenants are happy when landlords move across to us – because we are organised and get things done.)
Another reason that some owners believe it is better to change managers when the property is vacant is that they believe that it somehow manages to give the new managers “a clean start”. Ie the chance to get new tenants and get them trained properly. I guess some owners over-think the situation.
The Third Reality
Great Agents Just Want to Look After You. We find that it is far, far better for all concerned to take over the management of a property when there is still time on the existing lease.
Changing during a lease has great benefits. Your new agent then has time to assess the current tenants, (they may be great tenants badly managed).
Plus it also allows your new agent a sufficient marketing period to help fill your property quickly should your current tenant move on, helping to reduce vacancy time.
Both of these will keep more money in your pocket. And further, your new agent will also be much more vigilant to ensure any outgoing tenant is held accountable and ensure the property is left in good condition.
Costly Property Management Mistake Number Three:
“I’ll stay and see if it gets better..”
This one is my all time favourite. I call it “better the Devil you know”. If your local restaurant kept serving up bad meals you’d change in a flash – but owners stay with bad managers year after year and cost themselves thousands of dollars.
The biggest place money is lost from your rental is vacancies. If an agent doesn’t think you’re important enough to return your phone call you can be pretty sure they aren’t returning your current or potential tenants phone calls either.
The results are lost tenants (or prospective tenant) and lots of days vacant.
The Average Townville rental is approximately $400pw. If it takes the agent 2 weeks to return a call, 2 weeks to process an application and a week to finalise you are out of pocket a whopping $2000. (That’s almost $100 per week on a 6 month lease).
I believe that agents in general have become sloppy and unfocused in dealing with vacancies. In Townsville last year the AVERAGE number of days each rental property was empty was 14.2 days. Many were vacant far longer, and the average was decreased by some areas of high demand (and some good agents bringing it down – WINK!)
This is the one brutally clear message about when to change property managers. Is it best to pull the splinter out quickly? Or leave it in your finger allowing it to fester, swell, and cause you lots of pain? You can leave it in, put band-aids on it, and take pain killers – but the only effective response is to pull the bloody thing out. This means being a little bit brave in the short term to avoid continuing misery.
IF you are getting bad service, staying where you are is costing YOU money, so the longer it takes to move the more you lose!
The Dangers of Waiting
There is no reason for leaving your change of property managers until the lease ends. It is fraught with peril, and in most cases will needlessly suck hard-earned dollars out of your wallet.
Remember that it is YOUR responsibility as property owner to ensure that your managers are consistently getting the best return on your assets, and to continually re-assess them to ensure they don’t drop the ball and cost you money.
Every day you spend with poor quality property management is costing you money.
Your property is an investment, the same as your superannuation and shares and by taking a little time and making the hard decisions now you’ll enjoy the benefits when you really need them.
Coral Sea Townsville Property Management Townsville