To ask how much property managers in New Zealand charge may be like asking, “how long is a piece of string?”
Every property management company has their own fee structure which would form part of their overall charge to the property they are managing. There is generally a monthly percentage of the rental fee that is charged, which may vary considerably, but are typically between 5-10%. There may also be fixed charges for things like letting, marketing, inspections, etc.
Around 40% of rental properties in New Zealand are managed by a property management company, and there is good reason for this. There have been some unfortunate instances with property management companies that have tainted the industry in the past by providing substandard service; and within an industry that is unregulated, this could be seen as a red flag for investors looking to make use of a property manager.
This however does provide some fuel for property management companies to work harder and show their worth to potential new clients. Furthermore, an understanding of what a property manager does will suggest why it is so beneficial for any landlord looking to rent out their property. In general, a property manager takes care of all responsibilities involved in renting a property and making sure the landlord has a hassle-free experience. Some duties include, but are not limited to:
Getting the property rented
- An initial setting of the rent would be done in the form of a rental appraisal. Property managers have tools and access to information in relation to market rent and trends, along with experience to correctly set a rental price.
- A diligent vetting process is undertaken in order to find ideal tenants for the property.
- Property managers assist with any necessary compliance statements or maintenance needed prior to a tenancy.
- There is also a full hands-on letting process including managing viewing & handling queries from potential tenants.
Managing the rent
- Property managers also use software and systems to collect and track the rental income from tenants. In addition to this, the owner will receive frequent statements of their finances to ensure everything is kept completely transparent. Unfortunately, there are instances where payments may lapse and this can never be guaranteed to be avoided. However, a good team try and minimise late fees and payments by being in constant contact, plus maintaining total transparency with owners and tenants.
Managing the tenant(s)
- This is regarded as a core responsibility. Management of the tenant(s) would include screening and vetting of prospective tenant(s), handling tenancy agreements, and making sure all parties are in line with the latest laws and legislations. A property manager will handle any complaint, maintenance and/or emergencies that might arise. There will also be ongoing inspections of the property that will take place during the tenancy. This is very important for insurance purposes, as well as giving the owner some peace of mind knowing that his or her property is well maintained.
Managing the Property
- Property maintenance and repairs are always a hands-on process to ensure the property itself is maintained to a high standard, to keep it functioning in top condition. When dealing with repairs and maintenance, many things can arise, from a loose toilet seat, to more serious issues like the insulation of a property, which is regulated by Tenancy Law. Having a property manager deal with these issues will give the landlord a “hassle-free experience”. By managing a vast number of properties, a property management team has the advantage of having dedicated trades people for specific jobs who are trusted for their service and pricing, therefore offering the best possible solutions for all involved.
In depth knowledge of Tenancy Law
- It is very important that laws relating to tenanting the rental property known and adhered to. These laws may be amended and/or changed at any time, and is it imperative to have a property manager stays up-to-date with these changes. Various bills and amendments have recently come into play, one of them being the Healthy Homes Standards (HSS). The HHS outlines acceptable standards on a property regarding insulation, heating, smoke alarms and ventilation. By having a property manager oversee and handle any requirements, an owner can rest-assured they are in safe hands.
So, back to the question – ‘how much do property managers charge in New Zealand?’
A better question might be “what is a property manager worth to a potential owner?” With so many processes involved and angles to consider, it’s clear that by having the right team handle things for a reasonable fee, a good property is worth their weight in gold!
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