In my position as Director here at Investors Edge Real Estate, I am in charge of an organisation that is very successful in buying, selling, and managing investment properties in the Perth market. But did you know that I used to do exactly what I tell people what not to do now?
Before I started Investors Edge, I was a private landlord. I had four investment properties and thought I could manage them all myself. I had no respect for what property managers do, and I didn’t think it was worth the money to hire a property manager.
I knew I was really smart because I was saving money. I mean, what could be so difficult about managing four rental properties especially when you are the owner? It worked great for awhile. The work was more than I expected and there was a lot of micromanaging involved, but I managed the properties OK, and the rent checks kept rolling in.
One day, something happened that would change my mind forever.
It was the typical landlord’s nightmare situation. The tenant at my property in Huntingdale was behind on rent. Since I had a busy life, I hadn’t been paying attention. When I realised something was wrong, they were already three weeks behind.
Three weeks might not seem like a lot, but when you have to make loan payments and you aren’t really making much of a monthly profit, you don’t have a lot of margin for error.
Anyway, I spoke to the tenants and asked why the late rental. They told me a very sad and heart-wrenching story about how their son was dying, and the doctor’s bills were “crippling” them.
At that point, I had a choice: I could be a businessman or a human being. I chose the latter and I cut them some slack. I told them to pay as much as they are able. After two more weeks, the tenants called and said their son had passed away. They said they were moving away and gave me a three-week notice.
They owed four weeks rent when they left and I had to pay for a lot of cleaning and garden fix up work. Since I was doing the leasing myself, I had three weeks of vacancy before I could get someone into the house.
Their four-week bond covered some of the rent arrears and cleaning fees, but it left me with a $800 difference and $1050 in lost rent, for a total loss of $1850. In addition, the whole experience left me sapped of time and energy–mentally and physically.
The only good side of the story was that I felt I had done the “right thing” by giving a deserving family a break as they were losing their son.
As I was doing some cleanup work, I spoke to a neighbour. I mentioned how bad it was about the tenant’s son. Two weeks later, I got a call from the neighbour. He told me the ex-tenants were picking up mail from the property. Guess who was playing in the front yard?
That’s right! My former tenant’s “dead son” has resurrected, alive and kicking at my front yard! There was no mistake, it was clear as the sun: The tenants had only one son–and it was definitely him.
Since that moment–and since starting Investors Edge–I have learned that I made many mistakes as a manager, and that I really had no idea what I was doing.
I got scammed out of $1850 by a tenant’s lie about the saddest thing there is– ”death of a loved one,” but ultimately, the lesson that the incident taught me was worth far more: You have to run your property investing as a business.
The bottom line is that your business deserves the best professional property manager that your money can buy. You will save far more in dollars, hassles, and peace of mind than you ever pay a professional property manager.
At Investors Edge, our property managers do all of the work for you: We screen tenants, we conduct research and find the maximum rent that your property can command, we take care of those 2AM maintenance calls, we arrange for cleaning, and we conduct periodic inspections to ensure that your tenants aren’t causing any damage to your investment.
Most of all, we provide a buffer between you and your tenant. We’ve heard every sob story, even one which had the ultimate excuse of all: a dying son.
When you are ready to treat your investment property like a business see if Investors Edge are the right property manager for you, call us on 1300 472 427 or (08) 9742 1606.
Read an article on: “Confessions of a Director“