Finding a property manager
Sunday Star Times – 21/06/2009
Jo Kupa, Manager Roost
Question: I’m heading off to take up a position in Hong Kong, which earns substantially more than I am earning now. I own a property with a largish mortgage here. I will be renting this place out, as I have no intention of selling in this market. I will be renting in Hong Kong for the duration of the contract, which is for two years. The rent on my Auckland property (I own it through a family trust) does not cover the mortgage, so I will have to top it up. I won’t be able to manage the place myself and will need a property manager. I have tried to research them, but there is no way of telling which are the good ones, and they all sing their own praises.
My question is this: How do I find a good one, and how do I keep them honest when I am away? I also wondered if because I own the house through a trust (which owes me a lot of money – I am forgiving it year by year as I pay the mortgage off), can I claim some of the costs for property management and insurance while I am away?
Jo writes: I agree that it is important to find someone trustworthy to look after your property, especially if you expect to be out of the country for a while. Ask people you know with rental properties about their property managers, if they have them. If that proves of no help, search yourself, and treat the process as if you were hiring an employee for a business you own, which is exactly what you are doing.
When it comes to claiming property management costs, the situation is less daunting. Given your property is in the name of the trust, the trust as property owner makes any claims. The trust should declare the rental income so it can offset costs associated with property. This may include costs such as management expenses or insurance. You may have appointed an independent trustee who can, if you wish, act for the trust while you are out of New Zealand. That trustee can also supervise the property manager and/or vet potential new tenants. Your mortgage broker may also help by recommending an accountant independent of the trust. This can take the worry out of the actual claim process as they can attend to this for you.
The Panel’s comments are general and should not be taken as advice.