How Your Property Manager's Maintenance Process Can Kill Your Returns

If you want to be successful in property investing, you need to have a good property manager. 

Not only will they ensure you‘re getting the best rent and the lowest possible vacancy, but they can also save you a whole heap of stress when it comes to the day- to-day management of property and tenants. 

However, I’ve noticed some practices from some property managers that leave a lot to be desired. Most of these revolve around their repairs and maintenance processes. 

With 82% of complaints in the industry relating to communication and maintenance, it’s clearly not something many get right, and this could really diminish the returns you see from your property over the long run.

Here are a few ways your property manager’s (PM) maintenance processes can really kill your investment property returns. 

1. Being an order taker

This is the most common complaint I hear about and is usually seen amongst inexperienced PM’s.

Being an ‘order taker’ means that your PM will coordinate maintenance issues too robotically. When they receive the call from the tenant, they’ll turn to their default mode and just send someone, without finding out more first.

Why this can kill your returns: You may not actually need to send someone to fix, therefore you’re getting charged tradesperson call-out fees for no reason. $100+GST here and there a few times per year and say goodbye to any good returns you could’ve seen.

2. Not asking qualifying questions 

Further to point 1 above; it’s crucial that your PM is not just an order taker, and they ask questions to get to the heart of the issue before taking action.

Storytime: I heard of a property manager who received a call from the tenant saying they had no hot water. Turning to their default robotic self, they ended the call as quickly as possible and called a plumber.

Turns out, it was an electric hot water system (which the plumber told them when he got there). The PM then had to send an electrician to attend. So not only did the landlord needlessly have to pay the plumbers’ call-out fee, but the tenant had an additional wait before they had hot water again. 

Tut tut.

Your PM needs to ask questions before they act.

3. Not having a strong network

Having a strong network means that your PM knows and has prior experience with a handful of plumbers, electricians, handymen, appliance repair people etc. 

If your PM doesn’t have a strong network, then not only are they going to be unable to get you the best tradies at a negotiated rate, but it also means they’ll spend additional time trying to organise the repair. Meanwhile, your tenant has to live with the issue. This can make your tenant unhappy, which means you may lose a good tenant at the next renewal.

4. Not knowing the laws around who pays for what

Again continuing from the first point above; if your PM hears the word ‘leak’ and blindly sends a plumber at your expense, then you have an issue.

For example, if you own a strata-titled property, your PM needs to know what is your responsibility to repair, and what is the body corporate’s responsibility. 

Or is the issue due to negligence or damage on the tenant’s part, making it their responsibility to repair?

Again, the PM’s incompetence by not digging deeper could end up costing you.

5. Not knowing the tax laws behind repairs and maintenance

Specifically, the difference between repairs and replacements.

A repair is when you return the object back to its original condition. And (no-brainer): A replacement is when you replace the said object with another, new object.

A repair is tax deductible in full, a replacement is tax deductible over a number of years due to current tax depreciation laws.

Therefore, it’s best to schedule repairs before June 30th so you can claim the tax straight away, and it’s better to organise replacements after July 1st, so you don’t ‘waste’ a year of depreciation.

Sometimes it won’t work out this way but every now and then it may save you some tax.

6. Not communicating well throughout the process

As mentioned at the beginning of this article, 82% of complaints about PM’s come from a lack of communication and maintenance.

Not being kept in the loop with an important maintenance issue can be incredibly stressful and frustrating. 

Whilst it may not kill your monetary returns, a lack of communication can definitely kill your peace of mind.

Wrapping up

So how does your property manager stack up? Could they be needlessly costing you a few hundred bucks every year, which could be much better spent hacking away at your mortgage?

If so, perhaps it’s time you made a change - which is simpler than you think.

To your property management success.