This week I have been dealing with squatters at one of the properties I have listed.
The landlord moved out of town and didn’t know that the tenants on the lease had “sub-let” the property to their friends. These tenants then moved out and the “friends” were now living in the property alone.
Rent stopped being paid and the owner started being called by neighbours advising that the squatters were using and dealing drugs. They were also stealing property from other homes in the area and kids’ bikes from the neighbourhood and local elementary school.
Eventually the squatters were kicked out by the RCMP and taken to a shelter. The landlord was left with a $5,000 clean-up bill, plus the two months of lost rent prior to the situation being resolved.
If the landlord had used a licenced property manager to look after this property, this situation would never had happened. Tenants screened by a licenced property manager rent longer, pay on time, put less wear and tear on the property and generally cause fewer problems.
Typically, a property manager will charge you half a months’ rent and then 10 per cent of the month’s revenue of the property they are managing. If you hire them to rent and manage a property for $1,500 per month; that works out to $750 up front (for finding tenant) and $150 per month management fee.
Here are what I think are the top five benefits of hiring a licenced property manager to manager your investment property:
1. Increasing property value. Quarterly preventative maintenance inspections and communication with owners, advising on steps they can take to maintain property value. The structure maintains its value as a result.
2. Screening. Completing a credit cheque on a potential tenant is a good indicator if they are going to pay rent on time. Many self-managed rentals rely on only checking references. This can result in a landlord looking to get rid of a problem tenant not being completely honest with a new landlord.
3. Shorter vacancy periods. Property managers advertise for tenants constantly and know what to say and where to advertise to get high quality candidates quickly. If a tenant moves out it is quickly re-rented.
4. Long-term tenants. In general, tenants who rent a home managed by a licenced property manager are happier than those dealing with a remote owner directly. A happy tenant is more likely to rent long term than one who is not happy with the landlord.
5. Less stress. By hiring a licenced property manager, you will eliminate the need to chase rent, find contractors, deal with late-night emergencies and other time-consuming tasks. It will result in more freedom and more spare time.
The benefits of having a licenced property manager look after your investment property far out-weigh the costs. All the local real estate brokerages have property managers on staff so that’s where to start if you are looking for help managing your property. I recommend interviewing three and hiring the one you think is the best fit.
Tony Browton is an award-winning Realtor who lives and works on BC’s Sunshine Coast.
His weekly blog can be found here http://www.truebluerealty.ca/blog