Professional Property Management Vs. Self-Management: Which Is Right For You?

Professional Property Management

Before you decide whether to hire a property manager or self-manage your investment property, you must understand what goes into managing rental properties. 

While a simple equation of ‘rental income minus expenses equals profit’ is the most basic formula for an investor, you also need to include all of your landlord duties and the time and money required into that equation. Landlords can choose to hire a property management company to oversee these duties, or they can handle it themselves. 

The Various Duties You’ll Need To Handle As A Landlord

Being a landlord takes quite a lot of commitment. To decide what option is best for your portfolio, let’s take a look at all of the landlord duties you’ll be expected to oversee if you choose to manage your properties yourself:

Repairs & Maintenance. Owning a rental property involves managing routine maintenance, organising urgent repairs and addressing the inevitable wear and tear on a property. 

It will be essential to coordinate seasonal maintenance to keep appliances such as heat pumps or HRVs functioning, gutters from overflowing and more. Additionally, you’ll need to be available to respond to emergency repairs that cannot be set aside, such as burst pipes. 

Routine Inspection. Most, if not all, insurance companies require a quarterly inspection of your rental property. The evidence of inspections by photos and reports is essential should you need to make a claim.

Vacancies. Finding your next tenant will involve much more than just putting an ad up on Trademe. Don’t forget about property visits, liaising with current tenants, talking to prospective tenants and meeting them for property viewings.

You’ll need to collect rental applications and supporting documents in line with the Privacy Act 2020, complete tenant reference checks and make an offer to the tenant. As part of this process, you should look at an applicant’s credit report, criminal history and Tenancy Tribunal Judgement, as well as verify their income and contact references. 

Tenant Relations. Sometimes, one of your tenants will call you with a legitimate complaint that you’ll need to address immediately. Other times, you will receive tenant calls for things that should be the tenant’s responsibility to handle. Regardless, you will be your tenant’s point of contact for anything and everything related to your property, good or bad.

Rent Collection. Most tenants will pay rent and their other utility bills on time. But what if the payment doesn’t show up? That’s time you have to spend messaging, emailing, calling your tenant, issuing breach notices and following up to make sure they pay.

Tenancy Enforcement. You will be responsible for making sure your tenants follow the tenancy terms. If you find out a tenant is breaking the tenancy law, you will need to follow the Residential Tenancies Act by serving an appropriate breach notice which gives the tenant an option to rectify the breach, or you can move forward with a termination.

The Many Benefits Of Professional Property Management

Property managers have made a career of fully understanding the rental industry in New Zealand. Most importantly, they understand tenancy law and what it takes to meet the Residential Tenancy Act and other laws and regulations. Property managers are usually connected to the rental property industry through associations and professional groups that update them on the rental industry and policy changes. Naturally, their help can save you a lot of time and stress.

So, property management versus self-management, which is right for you?

Property management companies typically charge between 5 to 12% of your weekly rent to manage your properties. For a $600 per-week property, you will be looking at just under $6.50 every day (that’s at a 7.5% management fee) given to your property manager to handle all of the duties listed above and more. 

So, you need to decide how much you value your time. For a low-maintenance property and tenant, $45 per week may seem like a lot of money. But if the tenant calls many times a month, constantly complains about property maintenance, is late on their rent or conducts any tenancy rule-breaking activity, that could require many hours of your time a month. Suddenly, $45 a week for 4+ hours of management doesn’t seem too bad.

Who To Consider For Your Property Management Needs In New Zealand

Overall, when choosing whether to invest your time and money by self-managing or passing the management duties along to a professional, understanding all of your required duties and responsibilities will help you make the decision that’s best for you. 

Call us today at Harbinsons if you’re an Auckland property investor and want the highest level of property management services. 

Would you like to speak to us about what we can do for you? We’d love to chat! Call our team on 021 413 621 or use our site’s contact page to send us a message today.