Good vs. bad property management: what it could cost you
Investing in property is often seen as one of the most reliable paths to building wealth. But there’s a critical factor many investors overlook: the quality of your property manager.
A good property manager is more than just a rent collector — they are your partner in protecting and maximising your investment. On the flip side, poor management can lead to costly outlays, and even legal trouble.
Here we show how the standard of your property manager can make or break your investment.
How a good property manager adds value
- Maximising your rental return
Experienced property managers know the local market. This means they know what the rent should be to attract quality tenants quickly, and they can advise on appropriate rent rises and adjust accordingly at lease renewals.
Furthermore, they can identify low-cost improvements that can justify a rental increase.
This means your property stays tenanted, there is little or no gap between tenants, and your income is optimised.
- Finding and retaining quality tenants
The right tenant can make your investment stress-free — the wrong one can cost you thousands. A good property manager screens applicants thoroughly such as looking at background, employment, and rental history. They build a professional relationship with the tenant based on mutual respect, meaning they identify and address potential issues early.
This usually leads to longer tenancies, thus reducing vacancy rates and ensuring you have a stable, regular income.
- Preventing expensive problems
By conducting regular routine inspections, the property manager will identify maintenance issues early, and prevent them from becoming costly repairs later down the track.
They have a network of trusted, cost-effective tradespeople, the maintenance is of a high quality and done in a timely way.
Furthermore, they will ensure legal maintenance requirements, such as smoke alarm testing, are carried out within the legal timeframe.
This also ensures your property is meeting all legal safety and compliance obligations, and if there is a situation where you need to make an insurance claim, as well as the insurer looking more favourable on your claim, they will have all the paperwork ready to support your application.
- Reducing vacancy periods
Every week your property sits vacant, it costs you money. Therefore, you need a proactive property manager who markets your property promptly and effectively and responds quickly to inquiries and arranges inspections.
Their responsiveness can mean the difference between one week or several weeks on the market.
- Legal compliance and peace of mind
Property laws are complex and ever-changing. A knowledgeable property manager undergoes the training to ensure your property is compliant with state tenancy laws.
They will draw up a comprehensive tenancy agreement and ensure both parties understand their responsibilities, and consequently, reduce your risk and liability. Furthermore, they will manage breach notices, and handle tribunal matters professionally and within the law.
- Embrace technology
From signing leases to lodging maintenance requests more and more tenants prefer to use technology; it’s quicker and easier for them. In the same breath, landlords also want the technology to enable them to quickly track income and outgoings, and receive monthly and annual rental statements.
This is why we developed an online portal for our landlords and tenants.
The feedback from our owners about the online portal is that it is convenient and a comprehensive way of managing rental properties. Landlords who use our portal can view statements, financial reporting, ongoing maintenance, upcoming events, inspection reports and more.
For tenants, our portal streamlines the rental process. We accept online applications, have online signing and generally we make life a lot easier for the tenant, giving them a better rental experience. They can see their statements, create new maintenance requests, see upcoming events, access receipts, rental information and lots more.
How a poor property manager can damage your investment
- Incorrect rent
Setting rent too high can lead to prolonged vacancies. On the other hand, setting it too low means you’re not getting the full return on investment. Poor managers often fail to monitor the market, meaning you to lose income either way.
- Bed tenant selection
Rushed or lazy screening processes often lead to nightmare tenants — missed rent, property damage, and legal headaches.
One bad tenant can cost thousands in lost rent, tribunal costs, and repairs.
- Neglected maintenance
A manager who ignores tenant complaints or skips inspections can allow small issues to grow into major expenses — like water leaks, mould, or pest infestations. This costs you more to put the issue right, and potentially can cost you in terms of any capital gains you could make when selling the property.
- Slow or poor communication
If your manager is hard to reach, vague in updates, or unresponsive to tenants, it reflects poorly on you as a landlord — and often leads to high tenant turnover.
- Legal non-compliance
Not keeping up with tenancy laws can lead to penalties, disputes at tribunal, or forced compensation to tenants — all of which fall back on you, the owner. These can be very costly.
How to choose the right property manager
Not all property managers are created equal. Here’s what to look for:
- local market knowledge
- transparent fee structure
- strong communication and responsiveness
- proven track record with testimonials or reviews
- regular inspections and detailed reports
- proactive approach to maintenance and tenancy management
- thorough tenant screening process
- low vacancy rates
- detailed financial statements for tax return purposes
Your property manager should be your boots on the ground and the person who can help you grow your portfolio and help you realise your financial goals; they shouldn’t be the person that will drain it and turn your dream into a financial nightmare.
Would you like a free rental appraisal, or learn more about our services and how we can help potentially get you a better return on investment?
As members of REINSW, we do all the training to ensure your property is legal and your paperwork is in order, and we work hard to ensure your property is leased with reliable and good tenants. We also take the stress out of marketing, managing and running your property, ensuring you get the best from your asset, and your asset is properly cared for.
Contact us now for more information about property management and property investment. Call us on 02 4956 9777, send us an email to mail@newcastlepropertymanagement.com.au or pop into our Cardiff office for a chat to see how our property management services can help. For property management tips check out our Facebook page.