EP10: Property Management Perspectives: Investing Wisely for Long-Term Success

In this episode of the Property Investors Handbook Podcast, host Adam Bell engages in a crucial discussion with Colleen Sutherland from Sutherland's Property Management Group. They delve into the pitfalls of opting for discount property management agents and the long-term consequences it can have on your investments. Colleen, with 30+ years of experience, highlights the stark differences between full-service property management and budget agents, emphasizing the importance of investing in quality services. From handling maintenance issues to navigating insurance claims, Colleen emphasizes the value of expertise and proactive management in safeguarding your property investments. Tune in for invaluable insights on why cutting corners isn't worth the risk when it comes to property management.

What is The Property Investors Handbook With Colleen Sutherland?

Discover the secrets of successful property management and investing on "The Property Investors Handbook" podcast. Join Colleen Sutherland as she shares expert insights and strategies for acquiring, managing, and maximising returns on real estate investments. Whether you're a beginner or seasoned investor, this podcast is your essential guide to navigating the world of property investment. Tune in and unlock the keys to financial success in real estate.

Produced by Pod Pro Australia

  This podcast is brought to you by Podpro Australia. Welcome to another episode of the Property Investors Handbook Podcast, your essential guide to navigating the intricacies of property management. I'm your host, Adam Bell. And as always, I have the pleasure of speaking with Colleen Sutherland from Sutherland's Property Management Group.

With a wealth of experience and a keen eye for the long term success of property investment, Colleen is here to shed light on why cutting corners with discount agents might not actually end up being the bargain you think it is.

Colleen, great to have you with us. Thanks Adam. So discount agents that there, there are fewer out there. I know some have come and come and gone. Can you walk us through some considerations of a property owner what they, you know, decisions they should make when deciding between, you know, a full service property management agent like yourself and someone who's doing it on the cheap?

Okay, yes. I get that question all the time. So people will say so and so down the road is doing it for 1 percent or 2 percent or something. There is quite a significant difference between the two of us. So In my agency, we offer a full suite of services, and to have the full suite of services, I need to ensure that my figures are right for my business.

So I have a specific business model and as do many agents in what they're doing in business. The cheaper fee agents have a different business model in mind. So And I know that there is a plethora out of agents out there to choose from that are cheap, like I think they even go down to 3 percent or something.

Yeah, I know. And I've tried to make the figures work, seeing how, how do they, how are they doing it? So when they're right down at 3%, they are building an asset. And then they're going to sell it. Right. Because then they can sell it for X dollars. Sure. Admittedly, our rent rolls are valued on our commissions, but when you're that low, you're not going to sell it for much.

So they're building an asset, but at the same time, they're building a database so that when properties come up for sale, they will market to the hordes. And they can. readily have someone available to buy your property. However, they're not thinking about the owner, are they? And keeping the asset in good shape.

No, so what they're doing is Capital growth for the property investor. Correct. So they're building, building, building, and that puts pressure on the staff, or they outsource all their staff to overseas, which is the latest thing now. So you don't get to speak to anyone. And if you've got the senior property manager there, she'll either be too busy to take your call or she's gone and here's Susie, but Susie only lasts four months and she's gone and here's Mary.

So there's no continuity of your property and it's history and you don't get to speak to anyone. You've got to email. And that's how they can do it super cheap. And then they cut corners, but. See, I guess I'm starting to think you see those ads on TV, the, the cheap insurances and you know, and why not? And I think the point they're making is, look, it may be cheaper and it could go okay if nothing goes wrong.

If nothing goes wrong. But wait until something goes wrong and then you can't claim. I'm seeing an analogy here that, you know and things do go wrong with, we've done, we've talked about this in the podcast before, lots of things can and do go wrong with properties. That's right. Unexpected things.

And I think you're going to find yourself probably in a lot of trouble potentially with with these budget agents should something go wrong. Yeah. So when something goes wrong, the landlord will panic. Fair enough. We're at the other end of the phone, calming them down and saying, this is how we're going to handle it and be proactive in our approach where if you've chosen a cheaper, Then you need to expect that maybe you won't speak to anyone, or maybe you'll get little Susie on the front desk and she won't exactly know what to do.

So there is a lot of variables to choosing a cheaper agent. Mm, now I can see that. And I guess, talk to me about services that may even, you know, we talk about yourself being a full service agent. What sort of services would a budget agent not be doing at all or, or, or doing properly? Well, not doing it at all would be probably the biggest scenario.

So let's again say the agent is between three and five percent. They'll give you a schedule of what they will do and they will rent control for you And they will tell you when maintenance is coming up and they will tell you when the lease is coming up They don't actually do anything for those things They'll just tell you sure and what happens there is I've told you you're busy.

Mr Landlord and I get that you're busy, but We forgot that we didn't fix this because I don't have authority to do that because I'm not charging you for that. Whereas in a full suite we will take care of that maintenance, take care of the lease renewal, review the RAN, do all the things and inspections.

all done for you. Yeah, and you don't have to worry about it. You pay for is what I'm hearing here Colleen. You do and then at the end of every month you don't have a screed of And then you're sitting there going, Oh, did that happen? Did I do that? Didn't I do that? And you don't have to think about it. So it's peace of mind.

It is. Yeah. Yeah. And you've mentioned all those things. I think another one would be insurance claims. You guys help when, when that's necessary. I mean, yes. And discount agents, they wouldn't want to borrow that. I wouldn't imagine. No, and they wouldn't want to borrow it because you're not paying for it, but they wouldn't want to borrow it because they've got Susie who's fresh out of real estate school.

Yep. And she's got no clue how to save money for the landlord in that regard. So we know how to lodge the claim. We know how to, the invoice needs to be worded. We know to follow up all those sorts of things and make that payment. a seamless process of making an insurance claim. Absolutely. And being that you do that, you've got the experience, you do it well.

Yes. And that's, that's what you're paying for it. I mean, I love the insurance analogy we used earlier that you know, people look at insurance premiums of what they pay. Oh, I pay that and I get nothing from this. Well, it's, it's what you do get when you need it is what you're paying for. It's when you make that claim as well, or when something goes wrong.

Yep. Is when you really know that I've got a property manager on my side. Yep. Look, I'm sure quite a few people discovered this with the storms recently that came through the Gold Coast you know back in late December there and Boxing day or Christmas night or something? Yeah, Christmas night.

Yeah. And I can imagine that there's some very happy property owners out there who had great you know, great managers sorting them, sorting everything out for them and probably some who are in a world of hurt right now because their managers couldn't. So, one of the things during those hurricanes, they've called it, is we had a lot of fences come down.

And they're boundary fences, so it's my landlord and the neighbour. And the neighbour is often also rented out, and it's us. We didn't hear from the neighbour's agent. We still haven't heard from some of the neighbour's agents. But we did all the legwork. To get the fence made safe, and then to get it removed, get the quotes in, you know, all that sort of thing.

And I've made a claim on my landlord's side, we don't know what is happening next door, because they didn't even ring us. Wow. And so it's like, oh, do I keep going, and Yeah. Yeah. So, it's the proactive approach that's saved A lot of the landlords, yeah. And that's what you guys do, get in there and get things sorted out.

Because on the other side of the coin, I knew a neighbour near me during that particular storm whose fence got hit by lightning. So it was a Colourbond fence and it just blew out a couple of panels. And yeah, look, I would assume with a, with a discount it was on a, on a boundary that went onto another property.

So there wasn't another neighbour, you know, to, to worry about, or it was actually the boundary of another estate, and quite well away from their houses, so they weren't too concerned about it. But it took him a while. Weeks. It might have even been into into the months to to get that sorted through his through his property.

Well, his property managers. Oh, right. Really? Yeah. Yeah. And the and the The problem was he had a dog and the dog kept getting into the other. He had to keep it inside. I remember talking to him about this and I guess this is what can, can happen. He put it, he, he got onto them straight away, but first of all, it was Christmas and it was new year and then, well, hang on, we've got a whole heap of.

You've just got a fence with a couple of holes and we've got, we've got houses with roofs. So he's just getting excuse after excuse from his property managers. He eventually asked, can I get in touch with the owners direct? And that wasn't going to happen either. So he was left in no man's land. Oh, the poor, and I've heard that so many times.

So it's lucky that the neighbor has us on the other side, getting those fences sorted. Yeah. Because otherwise, we still to this day, what is it, two and a half months since the cyclone, haven't heard from some of these agents. Wow. And it's like, here you go. I mean, this just proves what we're, what we're here to talk about today that you know, you do get what you pay for and you know, cutting corners, especially if things go wrong can end up costing you a lot more in the, in the long run.

Absolutely. Well, look, thanks, Colleen. It's, it's clear that when it comes to, to property management, the wise choice is an investment in quality and expertise with a, you know, a full agent like yourself. That's what you're paying for. You've been doing this for 20 years. I'm 30. 30 is it? Oh my goodness.

So you know what you're doing and you know, it's peace of mind for your tenant and, and the property owners. So. If you don't, have a listen to this, don't consider cutting corners when, you know, property is one of the biggest investments in most people's lives. So why not protect it with someone who's really going to look after you and the people who are living.

In your investment, they're important because you're dealing with people's home lives for sure. And I think because they've got so many to manage, the human element has been removed. And we saw that a lot during COVID. Yeah. Is that it's like, this is it. This is how I have to do it. And it's like, and I feel sorry for the tenants at that time or, or during the time of the cyclones or anything that's to deal with their home life and needs repair, sorting out, attention of some sort.

So, but the other thing that cheap fee agents do is they will do a service that's like, Rent collection service. So everything else is what you pay for on top on top. So Often works out cheaper to pay the full fee and have it all done and have it all done And then when it comes time to making You know sorting something out like whether it's the fences or whatever.

It might be you've got a team of experienced people knowing what they're doing. It might take ages and longer than you would expect. That's what happens in our, in our line. So for sure. Look, it's, it's, it's clear, Colleen, you're not just managing properties, you're enhancing investments. So look, thanks so much.

This has been a really insightful episode and I'm sure there's a lot of people out there. We understand that the cost of living and everything and money is tight, but there are certain things you just shouldn't shouldn't scrimp on. And you know, these are people's investments and their, their future and get, get someone in like yourself, Sutherland's property management group who can and it's peace of mind.

Yes, it is. Thanks so much. Look forward to having another deep dive into another property managed subject with you on the next episode. Look forward to it. Thanks, Adam.