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Flat-fee property management has come to NZWednesday 19 November 2008 AcQuire Property has launched Residential Management, a full property management service, that is offering to manage properties at a flat rate of $899 a year. Principal Ritesh Mani says this stacks up well with traditional property management where managers charge a commission around 8% of the gross weekly rent. He says there are plenty of savings for property investors, even on a basic one-bedroom property renting at $350 a week. He says that’s a saving of almost $750 a year for the landlord. “An investor with three properties renting at $350 a week will save $2200 a year – that’s boosting their yield, and it’s money that could be going straight into mortgage repayments.” Currently it appears that property investors are increasingly embracing the services of managers, with many firms reporting growth this year. Mani says that in these tougher economic times investors are seeing a greater number of tenants missing rental payments and even fleeing properties, owing thousands of dollars. “Many smaller landlords who are managing their own properties simply don’t have the time or expertise to handle these situations, and so end up hugely out of pocket. A good property manager checks rental payments daily – if a payment is missed, will ring the tenant that day. If that doesn’t secure payment they will start down the recovery process which can end in a Tenancy Tribunal hearing. Mani says the flat fee structure has been tested in London, where Residential Management London built up a portfolio of 2,000 properties in less than a year. “New Zealand has a very high level of residential property investment. Often people buy an investment property to secure their financial future, and then spend all their free time acting as landlord because they can’t afford a professional property manager.” “During a down-turn in the market, a flat-rate property management service could be the difference between some investors keeping all their properties or having to sell down into a depressed market,” says Mani. AcQuire Property is accredited by the Real Estate Institute, and all rent goes directly into an audited trust fund. Residential Management is launching into the Auckland rental market, having bought the client list and database of Vault Property Management. It intends to expand into other markets through a franchise model.
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