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Photo: Getty Images
Photo: Getty Images

BusinessMarch 2, 2018

Why property managers are terrible – for everyone

Photo: Getty Images
Photo: Getty Images

Rent Week 2018: Property managers. Two words to make the blood run cold, whether you are a tenant or a landlord. Rebecca Stevenson weighs up the data and anecdotal evidence, and her ruling is final: property managers suck.

Hear me out. I’ve been on both sides; yes, I have been a landlord (pretty much by accident) and I was not rolling around in piles of cash and chuckling while I hit refresh on online banking. It was actually hell – and my experiences as a tenant under the reign of property managers were not much better. That’s why today I firmly believe property managers are shit, for both tenants and landlords (don’t not all landlords me). These are my top three reasons why:

They’re money hungry

Property managers are so good at extracting cash from both tenants and property owners, anyone would think they are in this for themselves. I’ve done a fair bit of scanning the internet over the past few days and it appears property managers charge about 6-10% (PLUS GST OF COURSE) on all money collected or paid out on behalf of a property owner. That can be rent or repairs or any money that is handled by the manager in the course of looking after the property.

Some property managers will even add an eye-watering 15% fee (again, plus GST) to handle the Watercare bill. Water. Bill. 15%. Plus GST. That is not outrageous at all!

Or hey, how about paying a 10% administration fee for a lightbulb to be replaced? So while you are paying your ridiculously high rent and cursing your landlord take this comfort – they are paying through the nose every time you need a plumber (if they have a property manager) and even just when you pay your rent. 

Stuck in a bidding war for a rental? A property manager could be to blame. Some property management companies brag about inducing bidding wars, like this one. The lovely folk at Walker Weir Property Management will take it from here: “We leverage the best aspects of your property and create competition among tenants to push the rental rates higher. Your rental rates directly impact the value of your asset because renting it for more means it’s worth more.”

How does it work, you ask? “Properties are advertised for rent with a ‘price guide’, not a set price. Prospective tenants then lodge a tender for the amount of rent they are willing to pay more often than not above the price guide. We then balance the quality of tenant with the highest offers for the property when setting up a tenancy. This method of renting properties makes under renting a property a thing of the past. Walker Weir Property Management is the only company (that we know of) to rent properties this way.”

And of course, any increase in rent means an increased slice for the property manager.

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But rental bidding is not just good for landlords – property managers are always looking out for both sides. Walker Weir again: “Tenants can get the property they want and secure it immediately with the right bid. Tenants don’t have to waste time visiting other properties and filling out numerous applications; they can act immediately on the house they want. Tenants drive the value of the property, establishing the amount that they’re willing to pay.” Yay!

Oh, then there are letting fees. Need I say more.

Your money is not as safe as houses

Because property managers are not regulated (no police checks, no code of conduct, no body overseeing whether property managers are doing a good, bad or horrible job) they also don’t have to keep your money as safe as lawyers, for example, because there are no rules about it. 

Luckily, we can just trust our property managers not to steal a tenant’s rent or a landlord’s income. Well, except for this property manager, or this property manager or this property manager. Or heck, what about this guy from this week who it is alleged owes 67 landlords in West Auckland more than $350,000.

Again, tenants have been equally well served by this gentleman, with 12 bond payments from tenants not lodged with the bond centre. And we only know about these ones because they were also licensed real estate agents, but I am sure there is nothing for us to worry about, at all.

What does Consumer NZ say about them? Well, they have had concerns since at least 2011. Head of research Jessica Wilson said via email: “Owners and tenants need to have confidence property managers are fit to do the job. The current unregulated market isn’t providing any reassurance this is the case. We can’t see why property managers have escaped regulation when related trades haven’t. At a minimum, we’d like to see mandatory registration requirements, backed up by professional standards and an effective disputes system.”

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And a warning from the watchdog: If you use a property management company, be on your guard. There are few safeguards to fall back on if things go wrong.

Service levels, um, vary

Some of them really, really do suck. And I went through a few in the past five years, both as a tenant and again, as a landlord (sorry). There was the property manager who forgot to take photos before the new tenants moved in (so when they moved out and damaged the place we couldn’t do anything), or the property manager that did regular inspections (mm hmm) but had no idea an additional mum, dad, and aunty had been moved in, in breach of the agreement.

Or, this time as a tenant myself, there was the one who tried to bully me into paying to have the carpet commercially cleaned in our earthquake-damaged rental, yet didn’t make the owner vacuum up the dog hair (or pick up the dog shit) everywhere before we moved in. Oh, and there was the time they didn’t do the final inspection until a week after we’d left and then the property manager tried to charge me for landscaping.

And there was the time one of our tenants developed a bit of a hoarder situation. Again, even though we were paying for inspections we had no idea until he’d scarpered. And there were so, so many other things, but I have tried to put it all behind me because being that angry is not healthy for a person. Suffice to say, I am no longer a landlord.

But don’t just take my word for it. Look around, listen. If you know someone, or even just follow someone on social media who lives in a rental property with a manager in situ they probably have their own tales of woe and anguish to tell. What could we do about this suckiness? There are some voluntary membership organisations attempting to pull up standards. A property management company might also belong to REINZ which at least has a code of conduct (you can also find accredited managers through these sites).

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We also do have the REA (The Real Estate Authority) dealing with wayward licensed real estate agents/property managers. The agency says it received 13 complaints about property managers between 1 July 2016 – 30 June 2017, and 364 enquiries about property managers during the same period. Of the enquiries, about 140 were from landlords and 140 from tenants. “Generally, we’ll receive an enquiry because they had an issue with a property manager. Most are referred to tenancy services, or to their lawyer. Occasionally it will be something we can look into and our early resolution team will discuss the complaint process with the person,” spokesperson Lucy Corry says.

But despite pressure from some bigwigs like Dame Roseanne Meo (chairwoman of the Real Estate Institute of New Zealand) nothing has happened, at all, in terms of addressing professionalism in the industry other than relying on the Tenancy Tribunal or Disputes Tribunal. Dame Meo’s concerns include: lack of regulation for trust account money, inadequate or no professional indemnity insurance, no screening for property managers and no dispute resolution processes.

We don’t really know how much of an issue it is because we are not measuring it. But I am sure she’ll be right. Eh.


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krispy kreme-1_preview

BusinessMarch 1, 2018

Cheat Sheet: What’s the big deal with Krispy Kreme?

krispy kreme-1_preview

Welcome to the Cheat Sheet, a clickable, shareable, bite-sized FAQ on the news of the moment. Today, Jihee Junn finds out what all the fuss is about with global doughnut brand Krispy Kreme, which launched in New Zealand this week.

Doughnuts!

Delicious!

What’s your favourite?

Can’t go wrong with a good ol’ glazed. There are few better joys in the world than taking a deft bite into that sugary veneer.

I hear Krispy Kreme’s big on the glazed doughnuts. Speaking of, what’s Krispy Kreme anyway?

Krispy Kreme’s an American doughnut company and coffee chain which was founded in 1937 in North Carolina. It rapidly expanded in the 1990s when it started opening stores outside the southeastern United States, and in 2001 it opened its first international branch in Ontario, Canada. There are now more than 800 stores worldwide and the company also sells its doughnuts in convenience stores like 7-Eleven.

Krispy Kreme’s first NZ store in the south Auckland suburb of Manukau (supplied)

But we’ve had Dunkin Donuts in New Zealand for years. Why are people so excited about another American doughnut company entering the market?

Because people like new things? Sure, Dunkin Donuts is a huge name in the world of sweet ring-shaped bread, but so is Krispy Kreme. Its arrival has been a long time coming, so the hype and anticipation’s been building for quite some time.

One of the most exciting things about the new store for a lot of people is the 24-hour drive-thru, meaning people can get their 3:00 am doughnut fix without even having to get off their bums. Then there’s the impressive production facility working behind the scenes which, at full capacity, can whip out over 4,300 doughnuts every hour.

Also, in today’s social media age, having Instagram-worthy food porn like rainbow sprinkled doughnuts and caramel drizzled shakes generally helps to get the excitement levels up.

Fair enough. So, what was opening day like on Wednesday?

As a somewhat functioning adult with a full-time job, I wasn’t quite afforded the luxury of lining up to attend the store’s 8:00 am (!) startBut according to Krispy Kreme’s own PR crew, dozens of dedicated fans did make the trek to Manukau in the wee hours of the morning to queue up before doors opened. First in line was South Auckland resident Shannice Godkin, 18, who camped outside the store from Monday evening onwards with her best friend and cousin.

For her unlikely heroics, she was awarded a year’s supply of doughnuts as “New Zealand’s number one fan” while her best friend received six months and her cousin received one month. Meanwhile, the first 100 people in line all received a free box of doughnuts as well as some Krispy Kreme branded merch.

Donut doubt her dedication: Shannice Godkin loves doughnuts so much she spent two days camped outside Krispy Kreme’s first store. (supplied)

Gosh, that’s a bit OTT don’t you think?

Well, people camp out for two weeks straight for iPhones and Yeezys. Whatcha gonna do?

It should also be noted that despite being an otherwise festive day, reports have come out that a woman from the Phillippines was turned away from lining up when security guards found out she wasn’t a New Zealand citizen. Krispy Kreme has since apologised, but not before the Phillippine ambassador took to Facebook to call the store KKK, or Krispy Kreme for Kiwis

We’re still left with the most important question though, which is: do Krispy Kreme doughnuts actually taste any good?

I’m no doughnut connoisseur, but they taste pretty good to me. Sure, they’re nothing to write home about, but I wouldn’t say no if someone offered me one. Are they any better or worse than what its main competitor, Dunkin Donuts, has on offer? That’s a matter of personal preference. But they seem pretty on par to me.

I’m sold. Can’t wait to stuff my face full of them!

Not so fast there! In case you need reminding that doughnuts are a treat food, the Choc Iced doughnut contains 17.9g of sugar per serving. And according to the World Health Organisation, that’s two-thirds of an average adult’s recommended daily sugar intake.

Krispy Kreme’s production line can make over 4,300 doughnuts an hour when running at full capacity (supplied)

In fact, the poor nutritional value of Krispy Kreme’s doughnuts has attracted the ire of some New Zealand anti-obesity advocates. They’ve accused the company of deliberately exploiting some of the country’s most vulnerable people by opening its first store in the south Auckland suburb of Manukau, which has one of the highest obesity rates in New Zealand. In 2013, the Counties Manukau health district obesity rate rose to 38%, while the national rate rose to ‘only’ 29%, according to Ministry of Health data. 

Krispy Kreme defended the location of its store, arguing that it was “driven by finding the most suitable site to build a manufacturing and retail space”. They also said that its arrival in NZ has allowed it to employ over 150 people of which 80% are from South Auckland

Treat food. Got it. But just one last question: is it ‘donuts’ or ‘doughnuts’?

According to the fountain of knowledge that is the internet, the dictionary-approved spelling of the ring-shaped cake is ‘doughnut’. ‘Donut’ is the shortened version that’s been around since the late 1800s. But it wasn’t until the 20th century that it became popularised thanks to Dunkin Donuts. So +1 to Krispy Kreme for its technical accuracy regarding the word ‘doughnut’. But -1 for spelling everything else in its name wrong.


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