PROPERTY MANAGEMENT MYTHS

PROPERTY MANAGEMENT MYTHS

There are some strange ideas in the world of property management which owners pick up from various uninformed sources. I will try to address some of the most common misconceptions I have come across in over 2 decade’s involvement in this business.

“There is no need to have rental protection insurance if I use a professional property manager.”

 I cannot think of a single investment that does not involve some element of risk, whether stocks, bonds, futures or even bank accounts.

Residential real estate has a history of offering sound investment, however the unforeseen can happen and this can impact the flow of rental income. The trick is to be prepared.

Take the following for example:

Good tenant, excellent references, been employed by the same company for a number of years. For three years he is the ideal tenant and, always pays rent on time. The tenant loses his job or his wife leaves him for the next-door neighbour and he is left with children to support and no income. Now he would not be considered such an ideal tenant.

A professional property manger puts all applicant tenants through a rigorous screening process at the start of a tenancy to select the best tenants.

However, just like a job applicant, we see them at their best.

In addition, we cannot predict the future of their employer or their marriage.

Regardless of how good the property manager is or how many reference checks are done; there is no way of predicting potential complications to rental income flow.

So just like it is prudent to carry insurance against fire, we recommend owner’s insurance against these sorts of problems.

The best part is the insurance is cheap and the cost is a tax deduction.

Ross Cutten

Owner / Director

Noble Real Estate