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For Jennifer, hiring a property manager meant she wouldn’t have to think about the day to day admin of her rental property. She assumed that they would take care of everything and give her the peace of mind she was paying for.
Unfortunately she hired a bad egg, and over a period of twenty years her property manager lied to her and deceived her – while assuring her all along that all was well and even sending statements to confirm this.
Jennifer has since terminated the relationship, and has hired lawyers to try and recoup the mountain of debt she has incurred, while counting the very real cost of his actions.
Her story is a reminder how the wrong property manager can cause untold stress, financial woes and impact the ROI of your rental property.
Kept in the dark
In the beginning everything seemed to be under control. Jennifer’s property manager was sending regular statements and performing all of his duties, including advertising and sourcing new tenants and paying all bills associated with the property.
In reality the bills actually hadn’t been paid and the property was slowly falling into disrepair, with little or no routine maintenance and repairs. This was exacerbated by a high turnover of tenants – all unbeknown to Jennifer.
“It was all lies. He was pretending to pay bills, but they were overdue. I was being given statements saying they were paid, when they never had been. Debt collectors were actually after me but were serving papers to my property manager. Meanwhile interest was adding up on all the unpaid bills. I also discovered that he was withholding, and pocketing, the rental bond deposits tenants had paid him – which is illegal! And as far as strata were concerned, he was acting on my behalf, so no one got in touch with me.”
When you hire a property manager you need to trust them because they essentially act on your behalf
“When you hire a property manager you need to trust them because they essentially act on your behalf. I trusted him and thought he was there to help manage my property and make my life easier. But instead there was deception, fraud and theft – which is totally unbelievable!”
There were warning signs, including a period of 12 months where she saw no statement or inspections reports. She also noticed late fees cropping up on her bill. The agent shifted blame to his receptionist and placated Jennifer with assurances the fees would come off her next statement.
There were warning signs, including a period of 12 months where she saw no statement or inspections reports
Jennifer ended up finding out what was really happening by accident. A phone call to strata revealed that she was actually $25000 in arrears for unpaid levies. This prompted her to get personally involved, soon discovering a whole litany of problems including the deteriorating state of her property.
The damage inflicted by years of neglect and successive tenants was extensive and included worn and stained carpet, water damage, leaking pipes, smashed vanity mirrors, torn curtains, a damaged rangehood, paint stains and a broken oven.
Frustration and Fair Trading
Jennifer’s first port of call was to approach Fair Trading, who administer the licensing of estate agents and prescribe rules they must abide by. These include an obligation to be honest, fair and professional, and ‘act in the client’s best interest at all times’.
Not only was he hiding the late fees and interest charged on bills for my property, but he also signed papers without my knowledge.
“I spent months building a case and made every complaint possible against this man with Fair Trading, but his real estate licence still hasn’t been revoked. I gave them as much information as I could, including 33 bills where he had attempted to obscure entries by scribbling over the amounts with a pen. Not only was he hiding the late fees and interest charged on bills for my property, but he also signed papers without my knowledge!”
At this point Jennifer came to a crossroads, and had to make a call.
“I had to decide if he gets away with it or if I should chase him. A lot of people don’t pursue a case because it is horrendously expensive, but I wanted the money I incurred for his incompetence. So I found lawyers through the Law Society, which by the way, costs me money every time I call. It is now going to the district court.”
The financial cost
Meanwhile Jennifer has been counting the very real financial cost of this misadventure, which she currently calculates is in the region of $55k and counting. This includes:
- $25k in lawyers fees, with more to come
- $15k to repair and upgrade parts of her neglected property
- $9k for a bathroom renovation (an additional $7.5k was paid by strata for waterproofing)
- $5.5k on miscellaneous fees, bills and costs associated with the property
“Because I’m suing the agent I now have $25,000 in legal debt.”
Fortunately Jennifer had taken out landlords insurance, which covered some of the damage to property. Her renovations could have easily been $30k all up without this cover.
Time for a change
Jennifer had previously considered changing her property manager but thought the process was a minefield of paperwork.
“I always thought, ‘the minute these tenants leave, I’m going to get rid of him.”
“When I found out the tenants were moving out, I started renovating and was scrambling around for an agent. Most agents just weren’t very interested, which is strange.
“I mean, it’s prime real estate right across from Sydney University. I was thinking, ‘you should be grateful that I’m offering my property to you!’”
Discovering the Leasi difference
This is when she discovered Leasi and decided to make an enquiry.
“I did my own research and came across Leasi online. I filled out a form and they contacted me really quickly. I told them it was being renovated first, and they surprised me by calling back after these works were finished.
“Because of my nightmare experience, I was skeptical and reluctant to have anyone other than myself manage my property.
“But… They called when they said they would and emailed when they said they would. They were just so persistent, and if they said they’d contact me in two weeks, then they did. Leasi were not only patient and understandingly horrified to hear of my experience, but were also able to restore some confidence and faith in the service they could provide.
“Ashley was upfront, explained everything very professionally, and assured me they’d take care of everything.
“The guys at Leasi just didn’t give up on me.”