We’re always looking to refine our portfolio and make sure it has the best cash flow position as much as possible, and a threat to that is a terrible property manager. Editor Phil Tarrant shares what you need to watch out for.
We’re at the most dangerous part of our investing journey: right now we’re doing nothing, and this boredom can lead to bad choices.
Really, maintaining our portfolio came down to good management of our cash flow. It might go up, it might cost us more to hold a portfolio from a mortgage perspective, but we have control over how the properties are presented, what sort of tenants are in there, when leases are coming to an end, how much rent we’re charging.
These are all things within our control. And often, it’s things I could probably be better at being on top of.
For example, there’s been times where I’ve asked a property manager, “How come rent hasn’t increased?” and the property manager says, “There’s no one’s been in there for three weeks.” And I'll go, “Well, why didn’t you tell me?” and they'll go, “We did.”
Okay, well, why don't you call me again? That’s missing cash flow, right there.
One of the challenges we have is that not all managers are created equal. We’ve had a couple that are a real pain. I won’t mention names, but there always seems to be a problem at a couple of the properties that we have: maintenance needed, trees falling down, dog poo on the front lawn, people can’t pick it up, gardens need trimming, all of these sort of stuff, and it’s always an issue.
With some of these, it feels as though I’ve never had a full week’s rent because someone has got their nose in a trough trying to take money out of it, whether it’s an electrician, or a tradesmen, or something or another – it’s taking cash flow away. It makes me ask myself, are they just bad properties and bad managers or is it bad property management?