Should You Engage a Property Manager?

AS YOU CAN IMAGINE, this is a question I often get asked.

So, let me perhaps start by saying that with all my properties … I, personally, engage a skilled property manager.

And people then ask … If you know so much about commercial property, why don’t you manage the properties yourself?

The answer’s fairly straightforward – as there are basically 4 reasons …

1. It’s because of everything I know

Commercial property management is a highly-specialised task with ever-changing statutory requirements needing to be complied with.

Things like:

  • OH&S Rules
  • Essential Services Regulations
  • Disability Standards for Buildings

… just to name a few.

And unless you are prepared to keep yourself up-to-date with the continual changes … you’ll quickly fall behind in the responsibilities you have towards your tenants.

Therefore, it would be naïve for you to base your desire to manage your own property on the expectation of saving costs. Because of the potential exposure to litigation, you’re opening yourself up to … the ultimate cost could be far greater than any savings you may initially enjoy.

And so, knowing all that I know … it’s simply not worth the risk.

2. Property Managers carry PI Insurance

If anyone is to be sued for mishaps with your building … it’s far better for that to be your Property Manager.

The only responsibility you then have is to respond quickly to their advice or requests. And act upon their recommendations, in a timely manner.

You see, if they alert you to a health and safety issue within the building, along with a proposed remedy … the only exposure you have is as a result of inaction on your part.

Furthermore, if you suffer a loss through your Property Manager’s mistake … you can also claim against their PI Insurance – to recover that loss.

3. Your Time is far too Valuable

Even if you are a full-time Commercial property investor … your efforts are better spent sourcing new opportunities. It’s not your job to perform the day-to-day hands-on role of managing the properties. 

Let’s ignore for the moment the amount of study you will need to do to keep up-to-date with all the statutory requirements. 

Because … as your portfolio grows, you will be run off your feet with continual contact from tenants. Not to mention, having to look after collecting the rental involved.

Unless you are set up to do this is a business … you’ll end up being totally consumed. And it is simply not a sensible use of your time or your talents.

4. You need to remain as the Higher Authority

This is something covered in some detail … as part of my Negotiating MasterClass training course. 

You see, if you ARE dealing directly with your tenants … then, they expect you to be able to make a decision, on the spot.

However, it might not suit for you to do that. Sometimes, you may want to gather your thoughts – or simply, stall for time.

Whereas, the managing agent can listen to the tenant’s request … And simply say that he (or she) needs to talk with you, as the landlord.

That allows you to consider the request (along with your property manager’s advice) and respond in a measured way – without being forced into a hasty decision.

Bottom Line: Unless you are fully trained (and fully equipped) to perform the role of a Property Manager – don’t expose yourself to the risks involved, and the potential legal implications.

Engaging a competent property manager or be considered as cheap insurance – the cost of which may well be recouped from your tenant. But at the very least, it’s tax-deductible.

So, hopefully, I’ve managed to convince you as to the need for you to engage a Property Manager. Ultimately, your benefits lie in preserving your … Time, Money & Legal Protection … plus retaining your Flexibility when negotiating.

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