We have previously questioned the relevance and validity of property management statistics often cited by agents, including the "Number of properties leased this week", "% of properties occupied" and "Number of new management agreements signed".
Each of these stats are great for a quick Facebook post or a stylish icon in a glossy ad, however you need to look deeper to determine what these figures mean to you as a landlord (if anything). Now, we are seeing questionable statistics appearing regarding rental arrears performance, and we wanted to raise some key points to consider when next you are presented with a company's arrears status.
We are the first to agree that an unrelenting and daily process around managing arrears is crucial to the successful management of a landlord's property. In a small family business like our own, arrears management is essential. It is not an option to allow rental arrears to slip through complacency. To be blunt, incoming rent is our primary source of income. We will chase it tooth and nail.
Recently we have noticed some Newcastle property management departments referencing their expertise in the keeping rental arrears low. What is concerning is the fashion in which claims of superiority in rental arrears management are being made. Some marketing is stating that high arrears rates are becoming accepted practice in the property management industry, apparently evidenced by data.
We'd like to point out a few things here.
1. Rental arrears data is not public
Let's be clear. There is no publicly accessible database of real estate agent records in managing rental arrears. We do not have visibility of any other agency's rental arrears position, and nor do they have visibility of ours. How can any agency claim with authority to be better than everyone else in this area? The answer: they can't.
2. Rental arrears status is constantly changing
Rental arrears are dynamic. A tenant who is not in arrears today may fall into arrears tomorrow. Vice versa, a tenant in arrears today may pay their overdue balance and be out of arrears tomorrow. The status of rental arrears in any real estate business is constantly changing.
In order to claim any performance figure (such as "we have less than 3% of our properties in arrears"), there has been some level of intervention by the agency to choose the point at which they calculate the figure. Unfortunately, this choice introduces the likelihood of bias. Please keep this in mind.
3. Clarify how rental arrears are defined
Any property management agency's statement on their rental arrears position must include a definition of how they define arrears. Why? Technically, a tenant is in arrears the first day they have missed a due payment. If a tenant is one day late in paying the rent, they are in arrears.
However, some property management agencies will only consider a tenant in arrears if they have fallen more than 7 days overdue. This is a significant difference!
What we do when a tenant is late paying the rent
We have a daily procedure to ensure overdue rent payments are addressed without delay.
If you are seeking transparency and professionalism from a property manager in Newcastle, contact us today. We'd love to meet you and discuss your investment.
Carnelian Property Management Newcastle NSW
We are a family-owned and run Newcastle real estate agent offering expert property management across Newcastle and Lake Macquarie.