We live in the golden age of outsourcing. Many of us walk around with Tim Ferriss and Tony Robbins etched in our psyches: time is the one thing that is more valuable than money, more lauded than accolades, and the one currency we can’t earn more of. As our tenancy laws become increasingly complex, this way of thinking hits home harder than ever.

Let’s be honest: most of us love the institution of property investing but hate the day-to-day. Why bother deciphering the Residential Tenancies Act (RTA) when we can palm off all that hard work to property managers and focus on the big picture?

But here’s the thing: there is outsourcing, and then there is wilful blindness. One is the hallmark of efficiency and business acumen; the other is just asking for trouble.

Property managers
Landlords still have to keep their eyes wide open and maintain control. Property managers juggle multiple clients and cases; while most do an exceptional job, mistakes can happen. And when they do, it often falls on the landlord to ensure errors are acknowledged and addressed. It’s not just about covering our legal backsides; it’s about protecting the profitability of our investments.

Vigilance is critical. Many investors don’t realise this, but property management contracts are commercial contracts; the usual consumer protection laws against unfair practices don’t apply.

Additionally, property managers remain unregulated, leaving their landlord customers with the unenviable task of contending with a marketplace with no minimum standards. Without mandatory industry benchmarks, anyone can hang out their shingle as a property manager, creating potential risks for landlords who are less informed or overly trusting.

RTA compliance
If the spectre of RTA compliance is giving you the heebie-jeebies, know this: you cannot make all your problems go away by signing with a property manager.

Let me share a couple of examples that highlight why staying involved is so important:

1. The Indemnity Clause Trap: Most management agreements I've seen contain indemnity clauses that, in practice, could leave landlords footing the bill even when the manager falls foul of the Tenancy Tribunal. While the big, long-term players usually have systems to sort out who pays what, not everyone does. This can leave affected landlords with little choice but to duke it out in the Disputes Tribunal to avoid paying for something they didn't do, didn't agree to, or knew nothing about. These indemnity clauses can be ticking time bombs for anyone who does not scrutinise its details, ask questions and negotiate new terms at the outset.
2. The Double-Dipping Debacle: An APIA member recently encountered a situation that shows how even reputable companies can slip up. She, an experienced investor, entered into a management contract with a well-known company. The contract includes a schedule for add-on charges for things like advertising and vetting new tenants. When her fixed-term tenant left early and agreed to cover these costs under section 44A of the RTA, the overworked manager accidentally billed the member for the same expenses. It was an honest mistake but one that might have gone unnoticed if this member hadn't checked with us about her rights under the RTA and questioned the bill.

Even the slightest oversights can hit our bottom line hard. And in this economy, where margins can be razor-sharp, every dollar counts!

So, to my Ferriss-Wheelers and Robbinators out there: yes, your time is worth its weight in gold, rhodium even. But the little of it you spend staying across the nitty-gritty of your management contract will pay dividends in not just peace of mind, but also significantly improve your outcome. Stay informed, ask questions, and be proactive. These small, conscious efforts will save you both time and money in the long run.

Remember, outsourcing is a tool, a way of business, but not a cure-all. Use it wisely, find good people to work with and keep your eyes wide open. That’s the sort of smart investing that keeps you ahead of the game!