Find out what goes on behind the scenes of property management.
Buying an investment property can be a good way to supplement your income for the present and the future. Investing in property can offer stability through slow but consistent growth.
When purchasing an investment property though, you are also buying into a number of responsibilities. It can require a fair amount of specialised knowledge and is a time-consuming job that, if not allocated the right amount of time, can easily overwhelm and overtake your life.
It is for these reason that hiring a professional property manager is an essential for any property investor that wants their portfolio to be successful as they take a step towards a financially secure future.
To understand why having a property manager is so important, we’ll outline all the wonderful things they can do for you.
1. Optimise the rent
In any form of investment, one of the primary goals is to achieve the best possible return on investment that you can. With an investment property, you achieve this through the rent that your tenants will pay to you that can be paid on a weekly, fortnightly or monthly basis.
The advantage of employing a property manager is that they will work with the investor. A good property manager not only helps set the rent price but adjusts it accordingly as they continue to manage your property. Through the knowledge they have of the market, they will be able to set the rent at a level which will attract the right tenants and also give you a nice return on investment.
Their knowledge of appropriate rental yields that an investment property should be achieving provides valuable insights. They also know the laws around when you can raise rent and can act on them to ensure that the investor benefits from their knowledge.
Organising and enforcing the collection of rent is another task that a property manager will take care of for the investors whose properties they manage. This is a key responsibility as it will allow for the owner of the property to maintain optimal cash flow. This will provide the following benefits:
contribute to paying off any debts (like your mortgage)
reinvest in improving your investment property
conduct planned repairs
provide a buffer against future financial challenges.
If rent is in arrears, a property manager is trained to deal with the situation and knows the exact steps that need to be taken to resolve the issue.
2. Manage tenant requirements
The management of tenants is another key responsibility that a property manager will take care of. A complex part of the property management business, there are many different issues and aspects to dealing with the requirements of tenants.
When taking over the management of your investment property, finding tenants to inhabit it as fast as possible will be their priority. By filling the vacancy quickly, they will be minimising your loss from the rent you are not receiving.
A property manager will know exactly where and how to advertise your property as well as understand precisely what the right prospective tenants will be looking for. For example, the necessary wording to describe the property and what features of the home the photography should display.
Taking care of this can be very time-consuming and costly if your efforts are misplaced. This is why having an expert property manager to deal with the process is ideal.
Once advertised, the next step a property manager will take is to screen any prospective clients. A property manager will know exactly what to ask and look for in an ideal tenant who will pay rent on time, have a longer tenancy and be as hassle free as possible.
Another crucial duty of a property manager is to set the lease term and make sure it includes all the necessary clauses to protect the owner.
A property manager’s most important duty is to make the experience of owning an investment property as stress-free and lucrative as possible. For this reason, a property manager is an invaluable help to investors because of their practical responses to emergency situations and effective management of complaints.
Through the networks they have developed, they will have a contact to deal with almost any situation.
A property manager will also handle when a tenant is moving out. They are responsible for inspecting the property, checking for any damages and determining whether the bond will be fully returned or partially to the tenant.
One potentially uncomfortable responsibility that a property manager has is handling evictions and conducting them lawfully.
3. Proactively handle maintenance and repairs
It is every tenant’s right to live in a safe and secure home. Therefore, it is a responsibility of the property manager to ensure that the property is in safe and habitable condition and stays that way for the duration of the tenancy. This means taking care of any regular maintenance and emergency repairs.
Whether the maintenance is requested by the tenant or spotted by the property manager during a routine inspection, they will organise and action the necessary works. This is done in an effort to keep current tenants happy and attract new tenants.
Some of the aspects that property managers are in charge of and regularly inspect are:
checking smoke alarms
property condition for emergency repairs
condition of the gutters
if any water damage or leaking has occurred.
Property managers can also offer helpful advice on how maintenance works could potentially improve the value of your property.
4. Maintain records
One of the most important jobs a property manager can have is to keep thorough records regarding the portfolio that they are responsible for. This should include all income and expenses that occur. It should also include past works on the property and relevant details relating to tenancies. Doing this requires a high level of organisation and can at times be very time-consuming. Due to most property managers being experienced in this area, the work they do can have the ability to save the investors they represent a great deal of time.
It is vital in particular for the investor they are representing as they need to keep track of the costs that occur such as insurance, repairs and maintenance. This is particularly useful come tax time.
Detailed records should also show:
list of all inspections
record of rent collection
5. Advise on market performance
A property manager can draw upon their bank of knowledge of the suburbs they manage to create the best possible experience for any investor and their tenants.
They can tell you things like what’s going on, the facilities and amenities that are around the area, the demographic and the market in general. They can use this specialised knowledge to their advantage and help any property they manage perform to its potential. They can also apply it to inform you about how your property is performing compared to the average in the area.
For those that do use a property manager, it is often the case that they don’t realise how much work is involved. The investor may not hear from them often but their property manager is just taking care of everything behind the scenes.
Our goal at Little Real Estate is to create the greatest real estate experience for property investors through unparalleled service from experienced professionals.
If you are interested in seeking professional property management for your investment property, contact us today.