.jpg)
Talking Property Management
Elite property manager Samantha Eason discusses aspects of successful property management, including the management of client assets, as well as growth and strengthening strategies. Supported by Exclusively Managed - Brisbane Boutique Property Management. There is no doubt Sam is not one of your standard podcast speakers - this won't be a perfect sounding podcast, we spend our time focusing on our clients assets and investments, but we are here with you to discuss the dangers of improperly managed investments.
Talking Property Management
The Cost of Ignorance on Your Investment Property
Discover how a seemingly minor oversight in property management can lead to seismic repercussions. In this episode, I, Samantha Eason, confront the sobering reality of what happens when experience doesn't equate to competence.
We explore a shocking case study of a renowned agency that, despite their 30 years in the business, stumbled catastrophically by failing to collect a tenant's bond and botching the subsequent legal steps. This cautionary tale underscores the critical need for continuous training and prioritising people over profit to avoid disorganisation and tenant dissatisfaction.
My promise to you is straightforward: I will provide honest, sometimes tough insights to aid your success, even if it means playing the role of the villain.
This episode is a call to action for all property managers and investors. Together, let's improve industry standards by sharing these valuable lessons with colleagues and local investors, fostering a more informed and resilient community.
If you have any questions or scenarios you would like us to discuss on an upcoming episode, please email samantha.eason@exclusivelymanaged.com.au or visit https://www.exclusivelymanaged.com.au/
Donate to the sleepbus foundation here.
https://www.sleepbus.org/services/sleepbusfund
Hello, welcome back to another episode of Talking Property Management. I'm Samantha Eason and today I want to, I guess, dive into a situation around severe mismanagement. So I'll be talking about some critical lessons learned from a real investment experience, and I wish there was some good, but unfortunately this episode is just about the bad. So while today's episode is more about understanding legislation and best practice and why it's essential in this industry, while also hiring the right team and Property Manager Matters, this is also an episode about how offices and agencies that advertise something like we have a team with 30 plus years experience or a combined 30 years experience or something like that really doesn't mean shit. I've said it before property management isn't just about managing properties. It's about understanding the legal landscape that surrounds them, best practice and everything in between. Mistakes with the wrong agency will lead to significant financial losses, and it's not just for investors but for property management agencies as well, and I'm not going to beat around the bush. Today I'm going to be discussing a particular agency with over 30 years of combined experience, so, despite the longevity in the field, the whole team made a critical error that cost one of their clients significantly and unfortunately, it's a very well-known agency. So before I say anything more, I don't think the listeners to our show understand this, but franchises aren't forced to complete in training. It's actually up to the franchise owner and principal and licensee if they want their team to complete in the training because it costs them money in the training, because it costs them money. So maybe this episode can become a lesson for the property managers and principals in our industry as well who aren't up to date with the best practice and legislation.
Speaker 1:Too many people, I find, are putting money over people and that is where their business will fail, and I know I've talked about this before. But people will always come first, money second and you'll succeed. The amount of times I wish I could walk into these offices and train these property managers. It's honestly frightening. There's a few agencies and this one is definitely one that I wish I could knock on that door and just throw their computers at the wall and go. You're not doing it Like. Either walk, go home, give up, hire someone who can do the job or sit down and learn Like I just don't get it.
Speaker 1:So poorly trained property managers and principals will have a significant negative impact on the property value and the overall tenant satisfaction as well. Someone doesn't care in this team. Either it's the property managers or the principals, or both. Like if you've got a team that isn't doing you know the simplest of tasks correctly, either the team isn't being trained or the principal doesn't care enough to force them to be trained and to put them in a position where they can be better. There is also the possibility that the principal has no idea of property management, which is pretty common, given that they're mostly focused on sales. Property manager is just a little sweetener. You know what I mean, so it's very common, unfortunately.
Speaker 1:So when your team lack the necessary skills and knowledge, it will often lead to inadequate maintenance, delayed responses, tenant issues, client issues, overall general disregard for property standards, but also the mismanagement around those particular faults in that team will result with severe mistakes and then a really poorly run portfolio. Essentially and I say this all the time If you look after your tenants, they'll look after you and your property. You can do that without being taken advantage of, but so many agencies haven't realized this. But a lack of training in your property management team will foster a culture of neglect and disorganization and if tenants start feeling unheard and undervalued, major mistakes happen and clients lose money. If clients lose money, they don't sell their property with the agency that lost the money and that counts for the whole franchise. So whether or not it's franchise or not, like if it is, that owner is never going to be associated with that franchise again. Communication breakdowns and ineffective problem solving strategies will excavate tenants dissatisfaction and it will result in high turnover rates of tarnished reputation for the property, the property manager and the agency.
Speaker 1:We have a website out there called shitrentalsorg. Have a guess of who the most mentioned real estate agency is on there. So I just I don't understand why there are so many agencies and principals out there who just don't give a shit that they won't train their staff or ensure that they're hiring the staff that know what they're doing. It's just, I just don't get it. But let's get straight into it.
Speaker 1:Yeah, this agency that I'm going to be talking about today managed a rental property and they failed to collect a bond from the tenant when they moved in. What's even better technically worse is that they lied to the property owner and advised them that it was the RTA's responsibility for breaching for lack of bond. So either they had no idea of the process or they honestly lied because that tenant was still not breached for the lack of bond. So without the bond, which is the security deposit, the agency technically had no leverage Like when the tenant had rent arre. The agency technically had no leverage Like when the tenant had rent arrears. There was no leverage. There was damages, there was cleaning issues, but mainly during the tenancy, while the tenant was in the property. For that two or three months there was severe amount of rental payments that were late and an abnormal amount of complaints from neighbors. But up until February, I think this tenant moved in around December they still hadn't realized that they didn't have a bond for this tenant. They still hadn't realised that they didn't have a bond for this tenant. The tenant obviously didn't care. They were breached for renneries.
Speaker 1:The agency incorrectly breached for renneries, I should add, and they couldn't enforce the breach effectively because they had failed to follow proper procedures. Because they had failed to follow proper procedures, which shows a severe lack of understanding of the legal matters when it comes to a tenancy and whatnot. And I know exactly what this tenant is thinking Like. I know you guys do too. But oh my God, do you remember that agency that I rented to? Ha ha ha. They didn't take my bond. I owed over like $3,000. Ha ha ha, what idiots Like. That's exactly what he's thinking. How could the tenant not be thinking that?
Speaker 1:So, to make matters worse, the agency was then advised to go through to QCAP from the owner, and they didn't even do the paperwork correctly. They couldn't complete their QCAT application correctly. This tenant vacated maybe a week after or two weeks, if we have to after this QCAT application was lodged. So they did the QCAT application for a warrant of possession. Of course that wasn't completed correctly either, because they asked for renteries, which you can't do. You need to make a claim for an amount above the bond, considering there's no bond. That's technically what the claim is, but you can't do that until the tenant's out. So you do one QCAT application for termination of lease. You know the process for a warrant of possession, but what is crazy is that they didn't do that. It wasn't marked as urgent because it was only seen this month and this happened in February. So it wasn't marked as urgent. They then claimed for rent arrears, which you can't do, but then didn't withdraw that when the tenant did vacate a week after they had lodged the paperwork. They then kept that, but then told the owner that they would be claiming, you know, rent loss, maintenance, repairs I should say cleaning bills and all of that at QCAT shortly after the tenant vacated. They apparently took several weeks to do this QCAT case because the owner was constantly asking for it.
Speaker 1:I just don't get it. Like don't work in the industry if you don't know what you're doing. Or principals, train your team. It's not difficult. Like we have people that you can pay to train them. Send them to a better performing office and go hey, I'll pay you $6,000. Can you train my property managers Because they have no idea what they're doing? I'll pay you $6,000. Can you train my property managers because they have no idea what they're doing? Like you have a senior property manager in that office with only five years experience and she couldn't pick this up.
Speaker 1:What makes you think that five years is an amount of time that someone is trained as a senior property manager? So that's a critical oversight and QCAT provides a framework for resolving disputes. But if you don't know how to navigate it properly, you end up with no resolution at all or, in our client's situation, a complete waste of fucking time. And our client has now endured 10 months of financial losses because of these mistakes and the whole situation could have been avoided with a proper understanding of the QCAT process, best practice and you know how to be a property manager essentially. So imagine being in our client's position, facing a massive financial hit due to someone else's negligence on two occasions. It comes down to like experience alone doesn't guarantee competence. Whether that property manager has five, 15, 30 years, there's no guarantee there.
Speaker 1:Seasoned agencies need to stay current with the regulations and best practice. It's not enough to rely on just past experience. Like everything in our legislation is evolving, you will have precedence with so many other cases and that is something that I include in my QCAT documentation is I include precedents from similar situations. So what do you learn from this? And this comes down to property managers, principals, agencies and also investors. You must have a solid understanding of the legislation that surrounds and governs tenancies. If you are in property management, where we have had over I don't know 15 reforms in two years, with more to come next year, you need to know the best practice way to complete QCAT documentation.
Speaker 1:Breach tenants communication in general. I just don't get it. So either they knowingly lied to the property owner or they just don't care and I also think, in this agency's experience, the lack of care and knowledge from the agency principles outstanding like not in a good way. When I requested early termination, given the severe mismanagement when I took over this property, he said no, so he cared more about $200 than the owner losing $2,000. They didn't take the bond from the tenant, like you are the reason why the owner has lost money and you couldn't care less to waive the 30 days has lost money and you couldn't care less to waive the 30 days. That makes no sense and it's frustrating because when I mentioned this in one of our property management forums for Queenslanders, I got banned and blocked for hazing. I'm sorry, but I firmly believe that if you've made a mistake you need to be held accountable. But I firmly believe that if you've made a mistake, you need to be held accountable. You know like yes, I have this public forum but I'm not naming names. But if an agency has made a mistake, the owner doesn't want anything to do with them. They've lost them a severe amount of money. They can be held accountable and this owner is well within her right minds to take this to the Office of Fair Trading. I support 100% and I would 100% assist her with that process. As to you know how to make that complaint, but she's out of pocket. Two and a half grand because they couldn't take a bond, breach the tenant for lack of bond. They didn't realize the tenant had no bond until they were ready to vacate the tenant and put them on ticker. They had no bond. Absolutely ridiculous.
Speaker 1:The cost of ignorance can be incredibly high, as I've highlighted in this episode. As I've highlighted in this episode, and when I say there are agency principles that care more about money and focus on their sales team, this is exactly what I mean. If you're in property management, you need to take the time to educate yourself or find an agency that will educate you. It's not just about managing properties. It's about protecting your clients. It's not just about managing properties. It's about protecting your clients, adding value to their home and, of course, protecting your reputation.
Speaker 1:This situation is a powerful reminder of the importance of due diligence. Don't let a lack of knowledge lead to losses. Thank you very much for listening to today's episode. If you found this episode informative, please subscribe and share with your colleagues and local investors. I am not going to shy away from the bad news and information in our industry because, unfortunately, I feel that a lot of property investors, property managers, need to do better and they need to know better. And by doing that, if I have to hurt a few feelings while having these episodes, I'm more than happy to. If it means that clients get to grow their wealth and their property investment journey works, then I'm more than happy to be the bad person in these situations.
