Property Rentals Done Right
PROPERTY investors will spend countless hours poring over real estate data, grilling agents about the ins and outs of a particular market and reading a small library of advice books when choosing a property.
But many then fail to pay proper attention to securing the services of a professional property manager.
A poor property manager can cost landlords thousands of dollars each year through poor tenants, lost rental income and failure to keep up with maintenance and repairs.
Once the poor cousin of a real estate agency’s sales division, property management has emerged as a specialist sector over the past 10 years.
Most agencies have a dedicated property management division and a number of firms have emerged that do nothing other than manage rentals.
“Times have changed,” Leah Calnan said. “Clients are looking for people who have taken on the job on as a career, who are there for the long haul and who are keeping up to date with changes in the industry.”
A good property manager does much more than collect rent. They will make sure all legal documents are in place, maintenance is identified and carried out, rent is charged at a market rate and collected, and tax records are kept.
They will also, says ‘ Melissa Opie, be proactive in terms of adding value to your investment.
“They should be thinking in terms of how to manage the asset and advise on how to maximise rental return and capital growth so the investor can tap into the property’s equity and expand their portfolio,” Ms Opie said. “An investment property is a business. A property manager should be an asset manager.”
WHAT TO LOOK FOR
If you’re dealing with a real estate agency, look for one with a dedicated rental department.
Try to get a feel of how hands-on the director is – the more notice the boss takes the better the service, generally speaking.
Make sure you are clear on who will be looking after your property – is it one person or are duties such as rent collection and maintenance spread over several staff? Not having a single point of contact can be frustrating for landlords.
Ask potential managers how many properties they look after. “If you are actively managing more than 150 properties you are going to start to stretch yourself thin,” Ms Opie said.
It’s also important to be clear on inspections and how detailed they are. Ms Opie said landlords should expect much more than a periodic letter saying everything was in order.
“You want to be with someone who is providing detailed reports and can advise you on potential repairs as well as maintenance issues such as large trees or cleaning out gutters,” she said. “Getting on top of these issues early can save landlords a lot of money down the track.”
Metropole chief executive officer Michael Yardney said landlords needed to grill would-be managers on issues including whether they could show renters through the property six days a week and outside listed open for inspections and how they screened tenants.
Mr Yardney advised going with one that had access to a major tenancy database. Also be clear about how the manager handles problems such as late rental payments – there should be a standard system in place.
“Look for someone who has put in the time and effort to present a professional image to you and gives you a written proposal,” he said.
“If they make the effort to present their services professionally to you it is likely that they will look after your property professionally as well.”
Landlords should be proactive and put themselves in a tenant’s shoes – poor service from property managers will lose landlords quality tenants.
Ms Calnan suggests cold-calling agents and property firms to test their level of service. “How long does it take to get a return call?” she said. “How long does it take to get an email reply? Who are you getting a reply from? You can tell a lot about the culture by these simple things.”
FIND A NEW MANAGER
Changing property managers should not be hard. Many landlords put up with poor service under the false assumption they are locked into the contract with their property manager for the period of the tenancy.
“That is not the case – there is no exclusive period of management,” Ms Calnan said.
A growing trend is for property managers to ask for a 30 to 90-day termination period, so make sure you check the managing authority before signing.
And if you do change property managers, don’t forget to keep the tenant informed.
By John Dagge