Have you heard the joke about the two types of commercial property Landlords?
But seriously, which type are you? Many times I hear commercial property owners say “why pay an agent just so I can check my own bank balance each week?”
If it really was that simple, property management firms wouldn’t exist. Instead, we see multi-national firms with tens of thousands of square metres under management and growing at a rapid pace.
As someone who has experienced both sides of property management as both a landlord and a tenant, I know which type I am. For me, the paltry amount of a few percent paid to a company to manage my problem tenants is money well spent.
Of course if you have a dream tenant who never does anything wrong, always pays on time and is locked in on a 10 x 10 x 10 year lease, maybe you can do it yourself. But here’s the trick. While these dream tenants do actually exist, they don’t just fall on your lap, they have to be nurtured and courted in just the right way… because every landlord wants them! From experience, I know that these dream tenants often like that layer between owner and tenant to remove the emotion out of the equation. When you own it, your heart is in it – it’s natural. But sometimes you may be pushing a little too much. Big companies are distanced from the emotion and this is why they like dealing with another unemotional party – the agent – who can talk on their level and just give the facts. That’s the dream tenants. What about the bad ones?
I am constantly amazed how many self-managed landlords I deal with who call up in a fluster asking for help to fill a vacancy quickly because “they did a runner”! Then my conversation with them usually goes like this…
You get the idea. So by saving a few percent on “bloody real estate agents”, these brilliant property gurus often find themselves in the hole for tens of thousands of dollars trying to remove all the dodgy tenants’ unwanted garbage and then clean up the premises back to a presentable state. Sometimes, this cost runs into 6 figures, not to mention the lost rent over the weeks and months it takes to make good. But hey, at least they saved a few bucks on agent fees right?
So without further ado, here is our list of…
Thanks for reading. Now go and enjoy your golf… unless you’re a Type 2 landlord!