Putting Value into Property Management

Property investors, do you ever wish that managing your investment was more profitable and less stressful?
Find out here how that's possible.

Auckland Property Managers

Why you’re better off with Bridgman Property Management

Checking what your Auckland Property Managers charge

Some Auckland Property Managers may cost you dearly! Here’s what to look for to make sure you’re not out of pocket.

Have you bought investment property with the goal of making money out of it? If so, there are a number of factors that affect the profitability of your property investment. These factors are vital considerations when you’re choosing an Auckland Property Manager for your rental properties.

Here’s your checklist to help you choose a Property Manager that’s got your best financial interests at heart…

1. Is the Property Manager’s fee reasonable?

Most Auckland Property Managers’ fees are between 7.5% and 8.5% plus GST. Our fee is 8% plus GST.

Why you’re better off with Bridgman Property Management:

Many property investors make the mistake of only looking at the property management fee when choosing a Property Manager. But this is actually a very small part of what can affect the profitability of your Auckland property investment.

Read on to find out what else you should be factoring into your calculations…

2. Is the Property Manager trained to identify maintenance issues?

The majority of Property Managers in Auckland aren’t trained to recognise maintenance issues early on – often resulting in major maintenance work being required later.

Unattended repair work that is initially a small cost to resolve will become an expensive maintenance job when allowed to deteriorate further.

Typical examples are the timber shower step which is suffering some paint peeling. If repaired immediately, the cost may be $70 for a repaint. But if it’s ignored, the timber suffers decay and rot which may penetrate through to the floor and the sub-floor cavity. After years of being unattended, the tenant advises the Property Manager that the bathroom floor has become soft. The $70 maintenance job has turned into a $3,000 bathroom repair because the initial problem wasn’t recognised and acted upon.

Another example is a timber window frame. If it’s left unpainted it will deteriorate to the point where a new frame has to be installed. Again, identifying the problem when paint starts to peel is paramount. But if the frame and sash become rotten and need replacement, typically this could cost $1,000+ for the materials and labour.

If ignored for even longer, the timber framing adjoining the window joinery will be exposed to water penetration and will start to decay. Because of this failure, water starts to enter the inside of the building causing further damage and even higher costs of repair.

Why you’re better off with Bridgman Property Managers:

Barry Bridgman at Bridgman Property Management is a Certified Engineer with extensive experience in the engineering, construction and project management industries. That means he has the skills and training to identify maintenance issues early on, before they get out of control.

3. Does your Auckland Property Manager provide an independent building inspection – for FREE?

Having a sharp-eyed Property Manager that’s able to spot maintenance issues early on is great. But nothing can beat a regular check from an experienced building inspector.

Here are some things our building inspector will check for:

  • Exterior Walls, Windows and Doors:
    • Check painted surfaces for peeling, chipping, blistering, cracking, chalking, water damage or mildew.
    • Check windows for cracked glass, loose putty, evidence of water damage.
    • Check if washing of building exterior has been completed.
  • Roof:
    • Check for damage to gutters and downpipes.
    • Check for damaged, loose or missing roof tiles.
    • Check roof for leaks/deterioration, check paint condition of corrugated or long run roofing, check for surface rust or damaged roofing and loose or misplaced roof tiles.
    • Ensure there are no branches overhanging or scraping roof, ensure branches are well clear of chimney to avoid fire hazards.
  • Plumbing:
    • Check tap and hose connections under sinks and toilets, look for leaks.
    • Check the caulking around all bathtubs and showers.

Why you’re better off with Bridgman Property Management:

The Annual Property Maintenance Report is written by an independent building inspector – and is FREE for Bridgman Property Management clients.

The Annual Property Maintenance Report is written by an independent building inspector – and is FREE for Bridgman Property Management clients.

Bridgman Property Management provides a FREE Maintenance Report to its clients – every year for every property.

The Report is written by Ian Wallace, a highly experienced and qualified building inspector.

The Maintenance Report contains the building inspector’s verdict on the interior and exterior of your property, based on a thorough visual inspection. It covers:

  • Foundations
  • Sub-floor (where accessible)
  • Exterior cladding/walls
  • Joinery
  • Roof
  • Roof space (where accessible)
  • Plumbing and drainage
  • Ancillary buildings, such as decks, carports, garages and balconies.

A key part of the Report is the summary of repairs that are required. The recommendations for repairs are conveniently split into Urgent, Near Future, and Future, allowing you to budget for any maintenance work.

As a customer of Bridgman Property Management, you will receive a FREE Annual Maintenance Report for every property we manage for you, every year. (And at the time of creating this report, Bridgman Property Management is the only property management company in New Zealand that offers this maintenance reporting at no additional cost.)

4. Does your Auckland Property Manager profit from maintenance on your property?

All properties need maintenance: this is unavoidable. But what really starts eroding the profitability is when Property Managers charge a mark-up on the work done by contractors and tradesmen.

This raises some important issues:

  • Does the property really need the maintenance work requested by the tenant? With so many Property Managers juggling large portfolios of 100 to 250 properties, they won’t have the time to check out what’s wrong personally – they’ll just call a trades person to fix the issue.
  • Property maintenance is a fact of property ownership. But do you really want a Property Manager to profit from this? The mark-up they charge can really erode the profitability of your investment.
  • Most Property Managers don’t have any training or qualifications in building and construction, and leave all the decision-making to the contractor. And, of course, it will be the contractor who will be invoicing for the work, and the Property Manager is unlikely to question or double-check the contractor’s recommendation!

Why you’re better off with Bridgman Property Management:

First of all, contractors won’t be instructed to undertake maintenance or repair work until we’ve visited the property and confirmed and identified the problem.

Secondly, you won’t be charged a percentage mark-up for individual maintenance and repair jobs worth up to $3,000. We’ll still manage it and check up on the contractor’s work (which is also an opportunity for us to check that everything else is OK with your property). But we’re not here to profit from maintenance work carried out on your investment.

Example: What the commission on maintenance work is really costing you

Imagine that you own 4 properties, and your Property Manager earns $250 in commission from maintenance work each quarter.

… that’s $1,000 a year – and in 5 years’ time, that will have built up to $5,000. That’s enough to fund an interior re-paint of a 2 bedroom unit/apartment or perhaps a new carpet and bathroom renovations.

These renovations would allow you to charge more rent in future, or they could increase the value of your property.

Yet if that $5,000 goes to the Property Manager, you miss out on that opportunity.

We believe that your money should be spent on your property maintenance – rather than add to a Property Manager’s profit margins.

For all work above $3,000 in value the project management fee is 8% plus GST, which includes us visiting the property daily to check and supervise the work. Barry Bridgman at Bridgman Property Management personally undertakes these inspections: he has 25 years’ experience in engineering consulting and construction, so you’re engaging a highly-qualified and experienced expert for this project management work.

5. What will the Property Managers do if the rent is late?

Ensuring that rent is paid on time, every time is vital. So it’s worth asking potential Property Managers what they do if the payment is late: do they simply phone the tenant? Send an email reminder? Send a letter or a 14 day notice to remedy?

Or will they actually visit the tenant to collect the rent?

Why you’re better off with Bridgman Property Management:

While there are other property managers that promise zero tolerance on late payments, the difference is that Bridgman Property Management will make contact with the tenant within 24 hoursand personally visit them, if required, to collect the outstanding rent.

We’re one of the very few property management companies which operate an in-house collections service.

From experience, we’ve learnt that when a tenant knows that the landlord will visit them to collect the rent, then payment problems tend not to arise. To date, this means that in our 25 years of managing rental properties, we’ve never once had a rent default.

6. How many weeks will the property be vacant each year?

Many Property Managers expect properties to be vacant an average of 4 weeks per year. Ouch! This is a lot of time for your property to be sitting empty and costing you money!

Why you’re better off with Bridgman Property Management:

Once a tenant gives notice to vacate, the marketing of the property starts with showing it to prospective tenants. During this period, open homes will also be run during the week and on weekends. Marketing the property and re-letting is not left until the tenant vacates. Bridgman Property Management aims to have a seamless transition between departing and new tenants, just as we do with our own properties.

7. Does the Property Manager charge a letting fee?

Some Property Managers charge tenants a letting fee. You may not think that this matters, because, after all, it’s paid by the tenant, rather than by you!

But it’s actually a very important consideration when choosing a Property Manager in Auckland. You see, if they charge a letting fee, the Property Manager is actually profiting from having a high tenant turnover rate. Yet it’s long-term tenants who tend to make the best residents as they are more likely to look after your property and treat it with respect.

Remember too that in property investment the quality of tenants is vital. Choosing the right tenant is important for protecting your investment’s capital value; for maintaining a healthy cash flow; and for keeping you sane! Don’t let the financial inducement of a letting fee get in the way of finding (and retaining) great tenants.

Why you’re better off with Bridgman Property Management:

There’s no letting fee; we’ve structured our pricing so that our income is just from the management fee. This way, there’s no conflict of interest and we can focus on building good relationships with stable, long-term tenants that have an interest in looking after your property.

Examples of the hidden cost to you with letting fees

Let’s look at these using a $300 week rent; 8% property management fee; and $300 letting fee…

Property Manager A: Lets property for 44 weeks (2 x 4 week vacancies and 2 tenancies):

– Property Manager’s income: $1,056 management fee + $600 letting fee = $1,656
– Your income (net of the management fee): $12,144

Property Manager B: Lets property for 48 weeks (4 week vacancy and 1 tenancy):

– Property Manager’s income: $1,152 management fee + $300 letting fee = $1,452
– Your income (net of the management fee): $13,248

Bridgman Property Management: Lets the property for 52 weeks to one tenant:

– Property Manager’s income: $1,248 management fee + zero letting fee = $1,248
– Your income (net of the management fee): $14,352

These examples are indicative only and do not infer any guarantees on rental income or profitability.

They do, however, show that what’s good for you isn’t the most profitable outcome for a Property Manager!

If you’re wondering why Bridgman Property Management works in this way, it’s because we’re property investors too. We care about growing your investment so you get the best possible returns on it.

8. How much time does the Property Manager have available to care for your investment?

The property management industry often recognises that the optimum number of properties a Property Manager should have in their portfolio is 80. Yet this number is usually exceeded: often even very junior, inexperienced Property Managers without qualifications can be managing 100 properties. Some Property Managers even manage 120, 200 or 250 properties.

The more properties a Property Manager manages, the less time they have to focus on YOUR property!

Why you’re better off with Bridgman Property Management:

Bridgman Property Management strictly limits itself to managing just 60 high-quality properties at a time. That means that we’ve got the time and resources to really take care of your Auckland property investment. We don’t need a larger portfolio than that, as we’re focusing on properties in quality suburbs which yield high rents!

Our services are available on a strictly first-come, first-served basis. So if you’d like a Property Manager that puts your property’s profitability first, please contact us right away.

Contact us today to enquire about our exclusive property management services

free property management help
First name: *
Last name: *
Email address: *