Should you take on all properties, or be choosy?
It seems counter-intuitive, like a store turning away customers, but could some landlords be more trouble than they’re worth?
Jamie Billerwell, Business Development Manager at Code Property Group, certainly thinks so.
“I think you need to be extremely selective with the landlords you’re bringing into your business,” she says.
Through years of experience, Billerwell has collated a list of red flags that she uses to indicate that a landlord may not be worth working with.
Said list includes landlords who base their choice of property manager entirely on fees, and those who fail to see the value of an experienced property manager.
“Another sign is any abrasive or aggressive behaviour,” says Billerwell.
“As well as if they don’t trust the property manager or BDM, and definitely if they don’t want to comply with legislation regarding smoke alarms, water certificates, and the like.”
Billerwell also says that landlords who want a high quality tenant in the shortest possible timeframe, but fail to see the value in professional property marketing, also represent potential problems.
Unfortunately, many of these warning signs may only become apparent when you’re already working for the landlord, however.
So, before accepting business, it’s best to take the time to get to know the landlord, and then rely on your experience and use your best judgment.
“When you ‘appraise’ a property, you need to look at it as an interview – not only for you, but for the landlord, too,” says Billerwell.
Lisa Perruzza, BDM at Place Estate Agents, says it’s all about risk management.
“A property where the landlord is not willing to complete maintenance, or will not comply with regulations, is not a client you want to have,” she says.
“We’ve terminated management agreements with landlords who pose a risk, and we’ve also declined business for properties that don’t meet housing standards.”
Perruzza says she recently read a building and pest report for a new investor’s property, and found the deck was unsafe, and needed to be tended to before the home could be tenanted.
“They were initially unwilling to do the repairs due to costs, but later agreed – after some negotiations,” she says.
“Once completed, we’ll be happy to take on the management.”
Landlords who fail to carry out maintenance or meet regulations will quickly create an excess of overhead, but Jamie Billerwell says there are other, more significant downsides to taking on undesirable clients.
“They say on average, one property manager leaving a business will cost ten managements – regardless of how long they’ve managed the portfolio,” she says.
As such, bringing on any and every client you can find may serve to inflate your rent roll initially, but if your property management staff begin searching for work elsewhere as a result of constantly dealing with overly difficult landlords, it’s going to have adverse effects on the business’ long term.
“One landlord is not worth a good property manager’s mental health and happiness,” says Billerwell.
“We have to think of the bigger picture, and be mindful of the consequences of every landlord – good and bad.”