DIY attitude and cost concerns prompt landlords’ to reject property managers

Monday 26 September 2011

A do-it-yourself attitude is the main reason landlords opt not to use a property manager, followed by concerns over expense.

By The Landlord

The findings were revealed in a survey conducted by Realestate.co.nz of its email subscriber base which was completed by 398 people.

The survey found a fifth of respondents identified themselves as landlords (21%), and a further 7% said they are or plan to be a property investor.

Realestate.co.nz chief executive Alistair Helm said he was surprised at the amount of respondents identifying themselves as involved in property investment.

"It's a decent number and would probably give a sense that people haven't given up on investment property - far from it - they're pretty keen to keep in that area of future investment," he said.

Helm said his initial perception was that the company's audience would be "just regular home buyers or first time buyers."

"Clearly the information that we provide is of appeal to people who are in the property investor market. That was quite a surprise and a welcoming insight to see."

Among those indentifying themselves as landlords or property investors, the majority, 41%, said they did not use a property manager as they preferred to do it themselves.

One third (31%) said they employed the services of a property manager and of the remainder, 21% cited cost as a reason not to use a property manager and 7% said they hadn’t considered using one.

The survey also asked landlords/investors how many properties they owned.

The majority owned either two (32%) or one property (28%), while 24% owned between three and five properties and 14% had five or more.

The survey also found 32% of respondents were looking to buy and asked further questions around their intentions.

It found 30% plan to buy a property within the next month, 22% within six months and 15% within the next year.

The remainder was split into three groups of 11% planning to buy within three months, when a deposit had been saved or when the market improves.

More interestingly for current property investors, the survey also asked respondents who identified themselves as tenants when they intended to buy.

The majority, 33%, said it would be when a deposit had been saved, followed by 20% intending to buy in the next 12 months, 18% in the next six months and 15% in the next 18 months.

Only 8% said they were waiting for the market to improve, and 5% said they never intended to buy.

Comments from our readers

On 27 September 2011 at 8:23 am Winegrower said:
The article is too glib. The real reason landlords are reluctant to use Property managers is the lack of diligence and commitment on the part of many of them. In my experience there is no attempt to minimise the cost to the landlord even though they are paying a management fee . Often there is a cosy relationship between tradesman and the manager. Often Tenant complaints are not checked out properly before the tradesman is called resulting in unnecessary cost to the Landlord.
On 27 September 2011 at 5:01 pm Ron said:
having recently decided to rent and therefore switching roles from being a landlord to a tenant, I am confirmed in my belief not to use property managers. I have decided to move from a property as the property management was so poor. The rental market is presently very buoyant in Christchurch, prospective tenants tend to avoid applying for properties that are managed by agencies, and they do a great disservice to the owners that they are acting for. Although when i worked in real estate sales I had sympathy for the workload property managers endured the situation seems to have got worse. They are so busy fighting brush fires that they are usually unable to provide the service that landlords are paying for.
On 28 September 2011 at 10:49 am Doc said:
Well said Winegrower!!! Spot on... I do almost all the 'repairs' myself as the property manager wants to call tradesmen for every damn thing!!!
On 28 September 2011 at 4:15 pm Murray Gray said:
I do not use property managers as they do not give value for money. Tradespeople are employed to do repairs and the property managers do not check that work has been carried out properly. Gave up after using two property managers. Property managers don't always use tradespeople in local area that rental property is situated.
On 1 October 2011 at 7:41 am PropertyInvestorCentre said:
It is certainly no secret that not all property managers are created equal. And it can be hard to find a good one. But in my opinion it is impossible to build a large property portfolio without using properties managers! One of the ways i diversify my portfolio is to invest right across the country. This also lets me take advantage of higher cashflow and capital growth than what might be available in my own location. Therefore I have to use property managers.
Commenting is closed

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