When landlords compare property managers, fees are usually one of the first things discussed, which is completely understandable. Management fees, leasing stats, Inspection frequency, administration charges, and marketing costs can all be laid out side by side. The challenge is that some of the most important parts of property management are far harder to measure.
- How do you compare judgement?
- How do you compare experience?
- How do you compare somebody’s ability to identify and act on a problem?
Realistically in this industry, you can’t. In fact, many landlords don’t truly understand the value of their property manager until something goes wrong.
Most tenancies are relatively straightforward and drama free. Provided the rent is paid, inspections are passed, and basic maintenance is attended to for the most part, everyone gets on with their lives. It’s when something unexpected happens that the quality of management tends to become much more apparent.
Experience Is Tested Under Pressure
Last November, one of our Senior Property Managers, Aimee, received a call on the emergency line at 4am. A tenant had woken up to a crash, only to find their loungeroom ceiling had collapsed. Thankfully nobody was injured, but from that point there were a number of decisions that needed to be made quickly.
- Was there a risk of further collapse?
- Had any electrical wiring been damaged?
- Could the tenants safely remain in the property?
- What trades needed to attend immediately?
- What could wait until daylight?
Before 10am that morning, electricians and builders had attended to make the property safe, alternative accommodation had been arranged for the tenants, the owners had been fully briefed, and an insurance claim was already underway.
Most landlords would rightly expect their property manager to respond to a situation like this. The reality is that not every response looks the same.
When something goes wrong, there is often a temptation to focus on the obvious issue. In this case, a collapsed ceiling. An experienced property manager is usually looking at several issues simultaneously. The immediate safety risk, the possibility of further damage, the tenant’s rights and expectations, the likelihood of compensation claims, and the prospect of the tenancy ending altogether. A prolonged delay in any of these areas can create additional risk for the owner.
The value wasn’t simply that trades were organised, it was understanding what needed to happen first, what needed to happen next, and ensuring everything continued moving forward while multiple parties were involved.
The Cost Of Well-Intentioned Advice
In the month of May, I came across a different example. We had just taken over management of a property from another agency. The owner had intentionally allowed the property to become vacant with the last agent so we could inspect it thoroughly and complete some maintenance before offering it back to the market. During my inspection, I noticed sections of timber flooring in the kitchen had swollen. There was also evidence of a previous repair where two damaged boards had been removed and replaced… And to put it nicely, the repair wasn’t particularly good.
The flooring was an interlocking system, and replacing isolated boards had left visible gaps and an uneven finish. When I asked the owner what had happened, he explained there had been a water leak approximately three years earlier. The leak itself had been repaired, however the flooring damage remained with only a couple of sections crudely repaired.
The property manager at the time had recommended making a claim through the strata insurance policy. The excess was around $10,000, more than the likely cost of repairs, so the owner elected to proceed with a basic repair and leave the floor as it was. The owner lives overseas and relied heavily on the advice he was receiving locally.
As he explained the situation, something didn’t quite add up. While every insurance policy is different, strata insurance generally responds to different issues than a landlord’s contents and fixtures cover. Damaged flooring within the lot often falls under a different category of insurance altogether. I asked for the owner’s insurance details and contacted the insurer directly.
In principle, the damage appears to be claimable under the landlord’s policy. The claim is still progressing, however there is a realistic possibility that damage everyone had accepted as the owner’s responsibility may ultimately be covered.
What stood out to me was that the original property manager wasn’t trying to do the wrong thing. I suspect they were genuinely trying to help, but didn’t understand how to progress things to ensure the owner’s position was protected. Three years later, that advice may prove to have been incorrect and the owner was none the wiser until I was engaged and flagged it immediately. That alone could amount to a cost saving of $7,000 just for the flooring.
The Cost Of Poor Workmanship
Not every example involves insurance or an emergency call in the middle of the night. Sometimes the difference comes down to something as simple as choosing the right contractor.
In March, one of our clients purchased a property that had undergone extensive DIY renovations by the previous owner. I mean, the term renovations is probably being generous… Throughout the property there were a number of repairs and installations that weren’t particularly well executed and needed attention before the property was ready for tenants. We inspected the property and arranged quotes through our regular contractor network.
The owner had recently spent around a million dollars purchasing the property and was understandably conscious of expenditure. Rather than proceeding with our recommendations, he sourced an alternative contractor through Airtasker who came in cheaper. That’s entirely his right, the property belongs to the owner and the final decision always sits with them.
We did, however, caution him that we had never worked with this contractor before. We didn’t know the quality of their workmanship, whether they would stand behind their work if issues arose, or whether the repairs would ultimately address the underlying problems.
Then the tenants moved in, and as expected, within a short period of time maintenance requests began coming through. Several of the repairs had either failed or had not been completed to a reasonable standard in the first place. As these were all genuine maintenance issues, the owner was still required to have them rectified properly and in the end, the work needed to be redone.
The lesson wasn’t that the cheapest quote is always bad, it’s that the cheapest quote and the most cost-effective solution are not necessarily the same thing. A good property manager isn’t simply collecting quotes, they’re drawing on years of experience dealing with contractors, understanding what quality workmanship looks like, and making recommendations designed to solve the problem permanently rather than temporarily.
The Things You Can’t Compare On A Fee Proposal
Stories like these highlight one of the difficulties landlords face when selecting a property manager. Most agencies can explain their fees, how they market properties, how they communicate, but they don’t necessarily tell you how a property manager will perform when they’re presented with something they’ve never seen before.
Property managers aren’t builders, lawyers, insurance brokers, engineers, or accountants, yet they spend their careers working alongside all of these professions. Over time, experienced property managers develop a practical understanding of how these different areas intersect.
They learn what questions to ask, when something doesn’t seem right, and when specialist advice is needed. Perhaps most importantly, they learn how to look beyond the immediate problem and consider the broader implications for their client.
A surprising number of costly mistakes in property management aren’t caused by people doing nothing. They’re caused by people confidently heading down the wrong path. That’s why comparing property managers can be difficult. The things that are easiest to compare are rarely the things that create the most value.
You can’t easily compare how a property manager will respond when a tenant calls at 4am, whether they’ll identify a detail in an insurance claim that everyone else has overlooked, or whether they’ll recognise a shortcut that is likely to create a bigger problem later.
Most landlords will never experience a collapsed ceiling. Many will never need to make a significant insurance claim. Some will go years without encountering anything particularly complex. That’s exactly why quality can be difficult to recognise at the beginning of a management relationship when everything is running smoothly.
The real difference emerges when something unexpected happens and somebody needs to calmly work through the problem, understand the bigger picture, and guide the situation towards the best possible outcome.
That part of property management rarely appears on a fee proposal. It’s also where some of the greatest value is delivered.