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What can happen when an Onsite manager charges 5% to manage your investment property

Posted by Jacinta Greentree on 17 June 2016
InvestRent recently collected a file from an onsite manager, who was being paid 5% to manage their investment. The saying, 'you get what you pay for' is certainly true in this situation. Incredibly, there are 90+ properties in the complex where the following occurred:
  • It took our office 4 attempts to be able to collect the file as the onsite manager would not release the file. (After reading on, we know why!)

  • Lease agreement had 3 pages only (should have 8 in QLD). Dates on lease are incorrect.

  • Upon collection of lease discovered that the lease was due to expire in 2 days, asked onsite manager if they had spoken with the landlord and actioned a lease renewal they hadn't. (keep in mind if you would like to increase the rent, notice period of 60 days is required, therefore landlord would have to wait an additional 2 months for increase to be effective)

  • The onsite manager took over management rights of the complex beginning of December 2015. Our office collected the file on the 9th June, advised they had not completed a routine inspection of the property. (6 months and counting)

  • Smoke alarm has been checked by onsite manager, but no compliance report completed, nor signed.

  • The onsite manager advised the tenant to cease paying rent from the 5th as they were no longer managing the property, the tenant has now fallen into arrears as a result of this as their pay dates have now changed. there is no need for the tenant to stop paying rent as all money goes to the landlord this has now left the landlord without renting coming in.

  • The lease agreement is in 2 names however only one tenant is listed on the bond form.

  • Processing of applications is minimal - no thorough rental history obtained and no TICA check Completed (this is for tenants who default on their lease agreements, stop paying rent, do damage and or do a runner as such.) This process should be checked for every tenant as in some cases the landlords insurance is void if the tenant is on TICA. No proof of income was supplied with application to ensure that the rent amount could be afforded. Basic ID was provided (license, bank card and copy of current lease that is all)

  • Limited opening hours- only working 2-3 hours per day.

  • Maintenance is completed by the onsite manager who in most cases is not qualified to do so, buying items cheap off ebay instead of using qualified tradesman insurance issues if something occurs?

  • Landlord was not advised back in January that the airconditioner had stopped working Landlord was advised in June that the previous onsite manager still had the invoice/report and it hadn't been passed on like it should have- attitude was better late then never!. Technician advised it was not worth repairing. (onsite advised that they brought a remote on EBAY that didn't work What a surprise! Ebay isn't the answer) Technician quoted to replace unit at $2400.00 . If tenant wanted compensation they are entitled to this as they have been without the air conditioner for 6 months. Again the landlord would have to pay this compensation or have the rent reduced to accommodate this.

  • Onsite manager took it upon themselves to paint sections of the property without the landlord knowing. They also removed a cooktop and replaced with a cheap one using ebay goods also. once again landlord unaware of this until management was taken over by our office.

  • They advised that there was no outstanding maintenance when speaking with the tenants they advised issues had been reported but the onsite managers were only fixing parts of reported maintenance - so items are outstanding.

  • This particular onsite manager doesn't charge a re-let fee. They also don't complete entry condition reports. The entry condition report we collected had no agent comments only tenant comments therefore when vacating the tenant comments are the only ones that can be used- are these comments correct? Nobody knows.

  • They had no copy of the keys issued to the tenant at the commencement of the tenancy.

It's little wonder that landlords get upset when their property investment is handled in such a way! The difference between having cheap management to a fully dedicated team like InvestRent to manage your investment can be as little as $1 a day.

If you self manage, or engage a property manager purely on fees you are exposing yourself to possible situations like the one we had here, and the long-term consequences that come with it.

Too often, InvestRent hear the story that 'we had to sell our rental property because of poor tenants or management agents'. InvestRent has a dedicated team that specialises in property management, one that will treat your property investment like the business it is.

Don't put your long term financial goals at risk with cheap or no management!

Jacinta GreentreeAuthor:Jacinta Greentree
Tags:Property News

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