All About Property Management

Ep 15: All About Property Management | Dubai Real Estate Unplugged - YouTube
https://www.youtube.com/watch?v=byQUTjfOsR0

Transcript:
(00:01) [Music] thank you welcome to Dubai real estate unplugged brought to you by the team here at haus & haus real estate I'm Luke Remington manager and director for the housing house group and today we're going to be discussing the highs and lows of property management here in Dubai if you're an existing landlord or you're thinking of leasing out your property long term you're likely going to need the support of a property manager so we're going to cover the basics of property managers and what they
(00:39) basically do discuss some of the unique considerations for management here in Dubai and what you might need to consider when choosing a property manager for your property to help me with these subjects I've got the help of our Hassan house experts Louisa Bridge head of property management here at Harrison House and Yuan day Epi scene a division yeah senior portfolio manager okay so Louisa you've been in the market for very impressive 18 years here in Dubai and in the UK tell us a bit about yourself and what
(01:12) it's like to be a property manager probably after 18 years the secret to your success I'm just good at what I do that's what we're going to delve into exactly so uh five years here in Dubai um most of that house and house nice so um the secret to success empathy okay um for both landlord and tenant efficiency and most of all being proactive um in helping both sides knowing the laws is massively important as to know what you can and cannot do okay go back so you've been five years so that's been in 13 years I'm assuming
(01:57) in the UK yeah big differences between Property Management the UK and Property Management in Dubai yes a lot a lot of difference what's the main differences in Dubai you're more proactive in helping the landlord in inspections banking of checks dealing with maintenance going to court for the landlord being at the evictions if a tenant hasn't paid rent whereas in the UK that's mostly landlords will go and do that you'd find here that more people give POA to you to be able to act on their behalf it's not so much like that
(02:41) in the UK okay yeah we'll delve into that kind of access and POA and what you can and can't do I'm going to switch over to you one day tell us a bit about yourself and how you got into the field okay yeah I've been here for in Dubai for 10 years now I went to school school here and then I go into Property Management five years ago um I started doing Property Management because I feel like I like to make people's lives easy and I like to deliver on promises that we make to obviously ask our clients
(03:11) um and well versed with like all the laws in Dubai which makes it easy for me to know what I'm talking about and what what's not right and what's right in Dubai which is basically what you need to do property management and that's why I love it so much okay no that's good Louisa a property manager in a nutshell basically we're the second landlord uh we do everything that a normal landlord would do if they're too busy if they're overseas so we find their tenants we screen their
(03:42) tenants we do move-in inspection move out Buy yearlys deal with all the maintenance and if there's Bank bounce checks we can take POA do the 30-day notices uh deal with the court to up into eviction okay of eviction does every landlords need a property manager I would recommend it I think it seems to be like one of those things about a maintenance company you don't need the maintenance company until you have a maintenance issue do you find that landlords until they get the issue until they get the difficult tenant do
(04:21) you find that they try it themselves and say because what they'll be paying would they be paying 10 of their annual rent approximately five and eight percent okay at the annual rent um but yeah you're completely right it's not until landlords come across the problem yeah I got this headache um last year I did like just a snagging for him and I was telling him look take Property Management you're paying like 3005 for snagging and then you just have to pay like six percent for it comes to just maybe two thousand three thousand
(04:50) more than what you're paying right now and he was like no I can do it myself just did the inspection you know and then this year obviously he forgot to increase the rent the rents have gone up he forgot to do it 90 days before the tenant is like no I'm not dealing with this uh tenant doesn't want to pay for maintenance he's got the wrong addendum like doesn't really stand for him in the uh his contracts so now his run back and is like oh please I do need property management and I've had to pay double
(05:13) you could have paid like because if you paid last year obviously you would have done the snag in the Handover and then added Property Management under the same fee but now you're paying like that amount last year and then six percent this year and it's like yeah if you'd have done it then literally the increase in rent would have covered the property management and it'd have been better off I feel like things like it's like with first-time landlords they always want to try out but the ones who've had like
(05:36) properties for like a long time know that it's not an easy job to do the managing of the property especially if they're busy exactly their own lives to lead each day do they want to get phone calls of a weekend or of an evening at 10 o'clock at night if there's a leak or an AC issue whereas we pick it up it comes through especially with the happy tenants system that we use we get an email a notification also Leah our maintenance lady she picks it up she organizes the contractors and we're on
(06:06) it yeah exactly it's kind of difficult for landlords obviously like with maintenance as well we get three contractors we're able to like organize everything it's if you had just like a one maintenance company just ask them because they come to the apartment to check what's wrong you don't like know if that's actually what's wrong you kind of need like more than one company or at least three different codes just to be sure that that's the problem and like to compare yeah exactly yeah so with us we
(06:34) do send three four contractors to check everything out but if you don't have a property manager you don't really have the time to organize all these things but they don't really get that if you just have like a maintenance company on the side to uh whenever it's time okay just go to the apartment let's say they they fix something now and two months down the line it breaks down that's because you only got one maintenance company they could have got the problem wrong in the first place and
(06:56) they fixed something that was only going to last for a short time because that's not the actual problem you get so you always need to like compare um codes and get different companies to know what it is and also have reputable maintenance contractors you know so rather than paying for a cheap contractor that will go there and budget it fix it right the first time then in two three four months down the line it could cost you double of what it would have cost you if you'd have fixed it right the first time yeah
(07:26) no I just want to rewind on that you mentioned about people being too busy or landlords being too busy if I was a landlord and I've only got one property is is it that much time for me to manage my one property I get it if I've got five or ten properties but if I'm not in a hugely paid salaried role and I want to you know I've got this property for return investment and I want to the enemy seven or eight percent but I've paid the property manager it's going to go down to six or seven or a percent
(07:53) down the thing is with some landlords they get really lucky like if you have one property you can be extremely lucky your tenant doesn't bother you the whole year but you can get like like the one of my tenants I'm dealing with right now the guy who's in the UK and has a property here in Dubai he has just one property it's first time buying and his sentence is an absolute nightmare you know so he got Property Management last year thankfully so we're sorting everything out for him but if he was
(08:17) like yeah I have just one property I'll do for myself I'm in the UK he won't be able to suck things out now because the way it's gone we've obviously been dealing with the tenant from the beginning so we know the whole story yeah so we're able to help him more um but like I said yeah it just depends on maybe your luck if you're a really good Center you could get a really bad tenant yeah okay is this the one that you sent me to the other day exactly yeah so I went there just to see if I
(08:40) could speak to the tenant because it bounced a check so about three checks three checks um so the 30-day notice is on the door I took a photo of it and managed to speak to the neighbor very weirdly they'll steal going in and out the house cleaning it but not living there they're not living there so what is something yeah won't respond so we've served the 30-day notice so now on Monday we're ready now to go to court and open a court case so you see with cases like that he has just one property okay but
(09:13) he doesn't know what's going on like he doesn't know the Dubai laws he doesn't know what to do we're gonna have to tell him okay yeah she's bounced one check send the 30 days notice and can obviously open a case for you he has one property yes he has time but there's things that you don't know that you need someone to help you with which is what we do did he have the property management at the start or did he do you get them start get three months down the line the first check bounces or there's
(09:37) an issue and they're like okay can you now take over yeah phoning them all the time yeah they're busy with work so it's like they're like yeah can you deal with it exactly like I said we're basically the second landlord so that we're the first point of contact for a tenant okay okay so interestingly when we look at the markets and what I understand with a an up and down Market if the market is booming and landlords know that they've got a lot of tenants do they actually want a property manager
(10:11) to make their life easier because they don't necessarily want to make their tenants life easier whereas in a downwards Market when there's lots of availability and tenants can pick and choose the landlord probably wants the property manager to look after their tenant to look after their interests because they don't want to lose that tenant we are now in a market which we all know is heated there's more tenants than there are properties yeah let's let's talk about this what what are we
(10:38) seeing our landlords we're talking about tenants maybe being the the uh the difficult ones but landlords I hear aren't always they're not the nice ones either right obviously as much return on investment as they possibly can and because of the rental calculator not being updated for a couple of years now I think it is um they're doing a lot of landlords they're now doing the rent valuation okay just go into that Louisa for people that don't know okay the rent evaluation it costs 2020 dirhams
(11:15) so the rent calculator may say there's no increase in rent or it might say that there's a minimal increase in rent or your property if it's recently random sorry relatively new it won't even be on the rent calculator okay and it hasn't been updated for two years yes so we're going back to prices in 2021 exactly yes if yes um so with the rent valuation it's now take it used to take about three or four days but now because there's so many landlords doing this now it's now taking up to three weeks how do
(11:55) you do it it's all done through the rest app okay which we we do a lot of these rent valuations now for our landlords so we we log into their rest app basically and we do it all for them if you're a landlord and you haven't got a property manager as we know from a client that came to us yes he didn't know how to push all these buttons and figure out on what to upload and what not to upload so it's obviously key because you guys do it day in day out you know what you're doing so right
(12:22) so you can go to the rental valuation you can pay the 2200 I think 2020 2020 something I assume is going to come back saying yeah it's more up today yeah so you what they then do that goes before a committee and they base the rental valuation on the surrounding properties and what their current market rent is okay what they're rented at and then that's what they will base the certificate on okay according to that you can then obtain a 20 uplifting rent okay how much of your time at the moment you one day is spent
(12:58) on landlords trying to increase rent uh two hours every morning really yeah so when I get in and I saw like a checks for Banking and stuff it's just back and forth with landlords and tenants trying to increase rent emails uh rental valuations we still use the real calculator obviously because some go sometimes up to 10K but it's mostly like the valuation things being done now but yeah it takes a lot of time tenants live in the community they've been in that property for a year before the landlord
(13:27) could potentially increase it they do look online properties in the headline do they not get or do they do they I get they don't want a massive increase but they they speak to their friends in the community their colleagues exactly do they not feel that so that's my thing I always feel like if you like the place so much you want to stay in there obviously just try to negotiate even if you know that yes there's nothing on the broadcast list so they come back to you saying oh you can increase more than
(13:52) this because it says there's only a 2 000 increase in the real calculator but come on you've seen what the market is like you know that if you leave the space you can't find something else like this so just try to be on good terms with the 10 with the landlord obviously just so you know he can keep you there a bit longer you know um but yeah they don't get that they just because Dubai obviously is very flexible with tenants as well you can't just kick them out of the property obviously so some of them
(14:15) just want to stick to the yeah it's 2000 increase and that's what it's going to be okay so regulation we're talking about these rules and regulations is Property Management regulated no not at all okay so so if I wanted to start it granted I've got maybe I'm not best example but someone who the Barista in house and house wants to become a property manager tomorrow can he do it yeah okay that doesn't sound very good how so so how can you so what sets us apart from our competition there's lots
(14:58) of property management agents we don't have to be regulated our landlords interviewing you before they pay your fee or they should really do their due diligence yeah and uh check out the company [Music] reviews and I would say meet face to face or by Zoom with your property manager and ask as many questions as you can and find out just how knowledgeable that they are that's really important the landlords do this actually like whenever they reach out like hey I want my property management I want property management
(15:35) but I'm looking at a few companies right now can we set up a call whatever whatever and then they come back to you saying okay yeah you I've looked at your company you guys are good I would like to go with you guys but I feel like a lot of a lot of landlords do that anyways like they don't just say okay to you I want they do search in the market a bit and see what kind of property managers are there they interview you they ask for a face-to-face meeting yeah so um when it comes to Property Management
(16:00) not being regulated yeah obviously anyone can just walk up to you and say I can manage your property pay me this and I'll do this for the for one year for you but you need to do your due diligence you 100 need to do it just so uh you know the chances are that they're not going to cover all the services that we cover yeah so that what give me an example well we do move-in inspections move out inspections we do by yearly inspections they might not do that they might just do the Handover of the Key Bank the checks and then key collection
(16:37) we make sure that all our tenancies are renewed more than 90 days we set them at 120 so that we're on it and also if a landlord wants to do a rent evaluation now we've had a lot of time yeah I've had a lot of landlords come back to me saying oh you guys are too expensive this guy said is going to do for me for two percent one percent and I'm just like what exactly do they do for you and they're like yeah they're going to rent it out and they're going to give me my checks I'm like but that's not Property
(17:00) Management you can get an agent to do that for years you know if there's any maintenance issues there's a flood in the middle of the night who are they going to call them bounces the person you've paid one person he's not going to chase after the tenant for you or go to the irdc for you so they don't get what sometimes yeah but what did you mention RDC what does that mean rental District Center how often are you there daily at the moment is this just because the Market's so heated or is this normal
(17:28) for property management it's normal yeah I mean it it does tend to go in fits and starts doesn't it you know you could you could have a really smooth run for a little while and then all of a sudden there'll be 10 people that just don't pay the red and badge yeah exactly in which case you're backwards and forwards to the RDC every day so they know you well in there uh yes and we're all first nine turns with a few of them but I do get exactly what you're saying you can find someone a lot
(17:57) cheaper but were they a barista a week ago do they know the laws Inside Out do they have your interests at heart to actually get your money on time are they vetting your tenants to try and understand that you've got a good tenant going in and are they going to answer the phone when there are problems yeah I had a friend call me on the way to work on Monday morning um and his message was something like I'm sorry to reach out I know we haven't spoken in ages and I hate doing this but can you help me I can't move into my
(18:24) property because the previous tenant hasn't canceled their ochari so I said to him well you need to speak to your agent he said they don't answer the phone Luke they've taken the money and I can't speak to them so now I've got us trying to help him to do something but these are the often what's happening here at the moment quickly with the laws these change quite often do you get how do you keep up to date with what is going because you're just in the fields and you hear what's
(18:50) going on or it's because your best friends are down at the yard you have a lot of experiences as well like you want to do something and you get there and they're like oh that's changed yeah so that just because you're doing it so often like you always get what's going on every other week if something's changing you try to do something just because you're doing things every other day you hear what's going on uh you get somewhere and they're like oh no that's changed and
(19:12) you're like okay for next time I know this now yeah yeah well just because you're doing the same thing over and over again you get to know about it every time okay yeah so we spend you spend a lot of time in the RDC we know that the Market's going up you've talked about landlords trying to increase their rents one thing we haven't touched on is necessarily gone into detail is the eviction side of things how much your time is spent on these evictions oh my God are people trying to yeah this these evictions are happening and
(19:48) if you put yourself in the tennis shoes leaving your home or being evicted or having something chucked on your door it's happening a lot yeah a lot of landlords are getting frustrated because they're not able to achieve the market rent or even close to it so they're deciding to sell okay so they're deciding to sell yeah okay they decide to sell do they really want to sell no so what do they do they don't sell but they're telling their tenant they're going to sell yes so the tenant moves out yes the landlord
(20:26) just says they're going to sell they get new taxes they might try to sell it for how long they can't a day an hour and then they re-rent it back at the market right at the market rent are there cases going on in court regarding this there are tenants that are taking some landlords to create some think you're really personal it shouldn't be rented over two years but um well that has an instance where um the 12 months notice was served on a tenant that the landlord was selling it okay it was sold to another guy
(21:07) before the 12 months notice was up so the tenant said to the new owner I've you've you need to send serve me another 12 months notice he opened a case and he won the case the tenant won the case no the new owner so he didn't have to serve a new 12 months notice wow he opened a case and said look the 12 months notice was served before I was the owner I was the owner by the previous owner I bought it on the fact that they hated at the end of that 12 months notice she hasn't moved out and he won the case and the the the
(21:48) judge ordered the tenants eviction yeah the thing is that obviously there's laws covering everything but when you actually open a case and there's a judge and he sees the circumstances around whatever's going on a decision yeah they're easy with people the cases you're seeing obviously it's going to go off the you know a case as won or lost and a lot of the factor that goes into that obviously with what said and the hearings and blah blah but also is what's going on on previous cases
(22:15) are you finding these are changing from day to day so you know you could have found that case could have been won by the tenant a couple of years ago or a couple of couple of months or even next week yeah okay it might be a different circumstances and the Tenant wins or the landlord wins it really depends on certain circumstances okay our tenants being more difficult yes in the in the the rarer calculator says like no increase but clearly there's a a big difference between what they're paying and the current market rate
(22:56) um they refusing to negotiate hence why there's a lot of these rent valuations being done and the 12 months notes because landlords are just I'll just want to sell yeah that's what I was saying earlier like it's like obviously you said they speak to friends in the community they know the rates it's like you want to stay there so why don't you just try to negotiate with your landlord if the rents are 260 000 I literally have one the rents are up literally to 180 000 and they're paying like 180 and
(23:25) because the railroad calculator says the increase is four thousand dirhams so the landlord can go more than 185 when the rent is 285 right now the landlord obviously doesn't want to lose out on his investment right the rents are high so surely if you're not agreeing to even negotiate you just want to stick to 4 000 rubber calculator the landlord is going to do evaluation or he's going to send you the 12 months notice yeah yeah you don't expect us to be there like they're open to negotiate with yeah you
(23:51) know they're not asking the 100K increase that like what they're asking you to like meet them halfway you know accept that the rents are a lot higher and just pay that little bit more exactly okay it's going to cost you more to move and you're never going to find the same property anywhere near and the hassle and you're like you know you're gonna have to downsize or move out the area you know if it's somewhere where you like living yeah just try and negotiate and you know the thing is like uh like you said
(24:24) tenants sometimes you said are they difficult yeah uh that's what Dubai obviously you know that if you try to negotiate with your landlord and if Herrera calculator says oh it's 4 000 you can go directly to the land department and renew your tenancy contract at the same price as last year if you don't agree with your landlord so if it was the tenants in that side as well yeah you understand yeah so are you finding that you're having more owners in Dubai that are living close by that's still using your services yeah yeah
(24:55) because of the problems that you are facing absolutely so whereas previously they would have had their maybe the driver to do pick up the chats and drop off I know well if there's a bounce check I just I don't know what I'm doing exactly yeah if if a bounce check does happen can you guarantee the rent we can't guarantee it obviously once a bounce check happens if the tenants evicted there'll be a judgment made against them they normally get a flight ban so and at some point if the providing
(25:28) the tenants of not left the country without any intention of coming back um if they do try to leave the country then they'll be stopped okay and then we'll have to pay plus the landlord's costs what makes a good tenant at the you at the moment you under is it if a tenant doesn't contact the property manager for a year I'm a good tenant so please don't start writing to me telling me you're kicking me out like if I if I'm a tenant today and I don't want to leave what can I do with you as the experts to help me
(26:01) not have to leave I feel like they're like you're you're in with the landlord right um I have some tenants like the maintenance fee is 500. I had someone the other day maintenance threshold is 500. what does that and then uh if it's above 500 the landlord pays if it's below 500 the tenant pays so for minor Works tenant pays I said the light breaks or something obviously you're not going to ask the landlord to pay for that if it's 30 Dirhams um so I've had this tenant the other day
(26:30) who his maintenance was 420 Dirhams and he's just like yeah I don't want to pay can they check something else so you can add it up so it becomes 500 I was like come on like come on well then you have some other tenants obviously who don't bother you the whole year but when does the rental increase you still need to increase the rent I'm not gonna not send you an email just because you were you didn't bother me the whole year you still need to get the rental increase email so from what you're saying if I
(26:56) make 10 issues throughout the year or I don't it gets the end of the year the landlord wants to increase right yeah yeah okay you're working on behalf of the land he pays your fee how do you handle the tenants negotiation skills yeah which you know your end is very good at but I suppose from knowing you that it's just because you call a spade of Spades and there's no point in having playing one off against the other just but that's as it is yeah is that the negotiation skills though yeah to be honest to just be
(27:27) straight with people look the market rates are high you don't expect the landlord not to increase this yes you're an amazing in fact most times when I try to negotiate the rent for my landlords and it's not on the river calculator like there's no increase but the land the tenants like no increase I don't want to increase anything I'm like look just do it just because you like the house you want to stay in there you know the landlord wants to keep you but rents needs to be increased if they do
(27:51) the rent evaluation it's going to go up probably more than what the rental calculator would say anyway even if there wasn't you know I feel like like she said empathy is a thing as well I'm just not like rude to them and be like pay or you get out because it doesn't work that way anyways you just have to find a way to like tell them look you like the place you want to do this just try to work with the landlord somehow you know and they always end up like yeah okay we'll come up a bit there's no
(28:16) interest on the rare calculator but I like this place like you said so I'll try to give a bit more yeah okay the last thing I want to touch on a scenario that I heard about recently was a we're getting into the hotter months the tenants AC breaks at one o'clock in the morning Dave obviously can only do so much at one o'clock in the morning because you guys are probably not awake to deal with it but the following day very little is done and the Tenant feels that it's a tactic by either the
(28:46) managing agents or the landlord to create more problems for their tenants so they willingly leave the property so is this happening do you have a kind of Act of care for the tenant to in the hotter months to say well yes landlords you might want to make the tenants uh life a bit more difficult you might not want to give them AC but you know they have a family they have children we need to get the AC you've then got to go through the process of one two three quotes do the landlords ever tell you to drag it out let's make these tenants lives
(29:23) more difficult no no I'm picking on that but I I suppose it could be other it could be the bath is not working and you know or something Muslims even once you once you buy it's hot in the summer please fix the AC ASAP they don't even wait for three coats like I even don't do three when it comes to like Aces it's really emergency I'm like look this this is what we can get this is the contractor that's available right now we can't wait like three days to like get codes it's the AC please get on they're
(29:55) like yeah please get it done immediately because it's the AC so emergency things like AC now does the landlord need to go off the recommended supplier that you choose rather than asking the gardener to fix the AC um have their guys they're like if I send Michael to this guy instead and I contact them and he just speaks whatever like I said three quotations pick what you want okay you can go with yoga I can go with our guy whatever you want but that could be a massive difference between the issue being fixed today and then breaking
(30:27) tomorrow or the issue being fixed today and actually working for the next six months well that's the thing with us obviously we do have like um warranty on our works yeah so when you get this other guys you just maybe they charge you 600 and we're charging you 1 200. it breaks in four days they ask you to pay something again but if you use like our maintenance companies we have like we ask them to go back check it replace whatever it is for mostly it's usually one year warranty yeah so I think probably what you know from the outside
(30:56) looking in if you're if you're giving a lot of jobs to a certain company they're going to do whatever they can to rectify and fix the issues quick turnarounds because they want to keep you on their side right and they give us better rights as well because we we give themselves yeah exactly but um if you send like just the random person maybe when the things broken down in two days they're never going to answer your call yeah and then now you have to use another company so yeah there's perks to
(31:24) like using guys who we know that are like established and it sounds like you're the referee and you're in a boxing match I don't know if I'd spoken to you two years ago or five years ago whether you would have been the boxer and not the referee but um it sounds massively challenging um thank you Louise and Yewande and thank you to all our listeners for joining us today if there are any further questions regarding Property Management just give a shout and we'll try and get those answers for you you can also get in
(31:53) touch with Louisa on your Yewande through their details which are on our website hausandhaus.com don't forget to subscribe whatever Channel you're listening on so where you are notified when we drop new episodes and you can follow us at house and house on Instagram Facebook and Linkedin thanks and Cheerio goodbye [Music] thank you