Repairs and maintenance: Improved 2012 service to landlords
Towards the end of 2011 we trialled using our main maintenance contractor, Nigel Bailey from Land Dynamics Ltd to carry out our 3 monthly routine inspections.
Generally it’s at this time that we pick up on repairs and maintenance not reported or noticed by the tenants so these inspections are important for a number of reasons which also obviously include how the tenants are looking after the property.
At about the same time we also introduced an electronic system of carrying out the inspections on ipads which means that we can receive information concerning the inspection in real time. Having Nigel carry out the inspections has shown the value in having a professional ‘maintenance minded’ person involved in this important role. On a lot of occasions Nigel has been able to fix minor repairs on the spot at no cost to the landlord. Often it’s the small minor repairs like those Nigel has been able to fix which fall by the wayside and end up causing frustrations for tenants, landlords and property managers alike.
This year we are hoping to extend and further improve our repairs and maintenance service by appointing a full time independent contractor to the roll. That person will be responsible for carrying out the majority of our routine inspections as well as organising repairs and maintenance including liaising with tenants, landlords and other sub-contractors.
We believe having a dedicated, professional and independent contractor responsible for all aspects of our repairs and maintenance programmes will see a more efficient, cost effective and efficient service being available to our landlords.
2012 - It’s all about improving our service
Recently we wrote in one of our newsletters about the ‘cowboy property managers’ giving our industry a bad name (9th of August 2011 – Would all of the cowboys please leave the building). At the time of writing the article we thought that we were doing a pretty good job of providing the very best service we could to our Landlords and also to our tenants. The article did give us cause for reflection however and there’s nothing like the old adage – ‘you can always do better if you really try’.
Just before Christmas Jeanette and I travelled to Melbourne and meet with the owner of a large property management company in order to discuss Australasian ‘best practice’ property management. The company we meet with are an award winning property management company, using the same computerised systems as us. During our discussions we discovered that they reimburse rents to their Landlords twice monthly instead of monthly as we were doing at that time. The reason, they said was that it “offered better cash-flow for their Landlords and helped with the Landlords peace of mind by reducing the amount of rental income tied up in the property management trust account”. We thought that their reasoning was sound and decided to institute the same process at the start of the New Year. As a result, from now on we will reconcile and pay all of our landlords twice monthly (mid-month and end of month) instead of at the end of the each month.
We understand that the Otago Property Investors association intend writing an article about property managers. They are asking for feedback from their landlord members with good and bad property manager experiences. What we are doing well and what improvements in the service we offer you would like to see. If you feel so inclined please send some feedback especially if you are happy with the service we offer you as a landlord. Comments can be emailed to: Rhonda.schlaadt@otago.ac.nz
Keeping up with technology
Some of our landlords and tenants may have realised over recent months that we have moved from a paper based inspection system to an electronic one using iPhones and iPads. Fair to say the transition hasn’t been ‘glitch free’ but fingers crossed it seems to be working quite well now.
The system we use allows us to tailor our inspections to individual properties. This means that rather than receiving a lot of extraneous information what landlords should receive in future in their reports will be concise, accurate and relevant (depending on the type of inspection being carried out – entry, routine, exit).
One of the advantages of the new system is that we have ‘real time’ access to most information contained in previous inspection reports relating to a property.
Would all the cowboys please leave the building
Sometimes there’s not a lot you can do about bad press which has the potential to impact on one’s own business. Case in point- Greg Ninness’s recent Sunday Star times article titled ‘rental agency mayhem’. In the article Ninness highlighted that yet another Auckland rental agency had ‘done a runner’ - leaving residential property owners thousands of dollars out of pocket and that property management was a ‘soft target for cowboys’. Trump Assets Management and City Gardens Management, which managed many tenancies in the City Gardens high-rise complex in downtown Auckland (often apartments were sold off the plans and investors offered ‘package’ management deals) had followed Wellington Company Jerico Residential Property Management in closing their doors leaving clients out of pocket, the article reported.
Ninness wouldn’t have had to look far to find a Real Estate agent happy to make comment which predictably pointed the finger at changes to the Real Estate Agents Act. Before those changes Real Estate agents had a virtual monopoly on the property management business, according to the article – which afforded Landlords and tenants protection because Real Estate agencies are required to operate trust accounts which must be audited every 3 months.
What rubbish. It’s like saying if you insure your car you will never have an accident. Propertyscouts was successfully operating as a property manager well before the changes to the Real Estate Agents Act. And, a three monthly audit is hardly likely to stop a property manager employed by a Real Estate company from legging it with your rent, except that clients of a Real Estate firm may be able to claim against a fidelity fund for reimbursement if something does go wrong with their funds.
If you are a Propertyscouts landlord/tenant or thinking about using our company you may be interested in what we do to mitigate your risk. Firstly both Jeanette and Milton as the two business owners have between us considerable business risk analysis backgrounds, Jeanette for the IRD and Milton for the Police and Department of Internal Affairs. Our business structure means that fraud by either owner would be almost impossible with all financial transactions requiring sign off by both of us. No employee has the ability to conduct financial transactions on accounts containing Landlords funds. Also, a large scale fraud would be akin to business suicide and financially wouldn’t make sense.
But a close analysis of the article reveals that the fraudulent ‘property managers’ didn’t operate at all like we do at Propertyscouts and that there were plenty of warning signs for landlords in advance of the thefts. Erratic reimbursements to landlords to the extent of having to ring to chase up payments, unable to make contact with property managers, account numbers changing and bonds not being lodged. Any one of these ‘warning signs’ should be a clear indicator that you are probably dealing with a cowboy – and you should …ask them to leave the building.
There’s never been a better time to buy (part ii)
Since our article in the June/July Propertyscouts news bulletin we have helped five of our landlords add additional properties to their rental portfolios. This has included ‘scouting’ the property market and looking for properties we think would make good rentals. Often for landlords/investors they just don’t have the time (or ability due to location etc.) to do the leg work. That’s where we can help because we’re doing it all day – every day. Some of the (better) Real Estate agents are realising that we are active in this area on behalf of our investors and this can present an opportunity for a ‘heads-up’ before a property goes on the market. For those investors happy to do the leg work we can help with (free) written rental appraisals to help convince the bank manager and for your own peace of mind.
Of the five investors we have helped recently three have completed settlement and their properties are now fully tenanted, one has settled but has a couple of weeks of maintenance work to complete – we have received one off-shore tenancy application for this property already. The remaining property settles at the end of August. We’re confident we’ll have a great tenant lined up by then.
In the last edition of the New Zealand Property Investor magazine there was a short article analysing the best NZ location for owning a rental property. Taking into account all of the relevant factors the article (written we think by an Aucklander) stated that Dunedin still represented the best location! As we said…there’s never been a better time to buy.
Propertyscouts investor club update
Recently we looked at the St Clair Esplanade motels as a potential investment for our ‘investor club’ members but the numbers just didn’t stack up. We are still looking into a modern block of 10 units in the inner city. If this sort of passive residential investment appeals then please hit the attached link to be included as a member of the investors club. Contact us here.
New Body Corporate rules
If you own a property subject to Unit Title rules the new Act which came into force about a year ago (with a 15 month lead-in time) will override a lot of the existing rules from the 1972 Act.
One of the new requirements is for body corporates to establish and maintain a long term maintenance plan covering at least ten years. We believe that strategic maintenance planning of this sort will be a real test for a lot of body corporates.
Calculating appropriate and sufficient contributions from unit title owners will be imperative.
Body Corporates are given wider responsibility for repairs and maintenance under the new Act as well as a change from unanimous agreement amongst owners to 75% agreement. Unit Title disputes involving sums of up to $50,000 will now be heard by the Tenancy Tribunal and sellers will be required to provide purchasers with disclosure statements around decisions a purchaser might have to make before buying a unit in a Body Corporate complex.
Generally we think the changes are for the better but they do place a lot of additional onus on body corporates.
That’s why we have developed a simple process plan for helping Body Corporates meet their commitments under the new Act. We can take a lot of the stress away from the management of a Body Corporate and ensure it functions more efficiently and cost effectively. Please get in touch if you would like more information on the Body Corporate services we offer. For more information on the new act go to www.dbh.govt.nz/unit-titles-updates.
Theres never been a better time to buy another property
Apparently…..there’s never been a better time to buy a property. Well that’s what the experts say and we think this time around they are pretty much on the button.
With house prices down (according to the Sunday Star Times between April and May the median Dunedin price fell by $5000), interest rates at the lowest they have been for decades and rents relatively static there are some pretty good rental bargains to be had.