Property Management is often the forgotten piece in property investment. Often we all get so caught up with the strategy, finance, property selection that we leave the property management piece to the last. While in fact property management is equally important as you are handing your asset and it’s well-being to a competent property manager (PM).
There is a lot to be said about property management. This blog is just the beginning! There are NINE Key Things to look at that your selected PM must do to ensure you get the best tenants for your property and you therefore get the top returns out of your asset. These NINE key things are:
- SCREENING TENANTS – The use of tenant default databases, checking and cross referencing details, employment checks and ensuring an affordability calculator is applied, agent references – including checking the tenant ledger on agents’ trust account and routine inspection reports.
- HANDLING ARREARS – Be clear on how arrears are handled, sending default notices on time, reminders for tenants, initial induction of the tenant to ensure that arrears are minimised. Using direct deposit methods and multiple options to pay rent to minimise arrears.
- INGOING INSPECTIONS – Taking 300 photos and detailed reports to ensure that all tenant damage is accounted for and a PM can accurately claim damages against the tenant and represent the landlord effectively.
- OUTGOING INSPECTION REPORTS – Detailed reports of the property after a tenant vacates and taking action on any damage or bond claim that has occurred. 95% of properties have something to claim if a PM is on the ball.
- ROUTINE INSPECTIONS – Routine inspections need to be performed every 12-16 weeks or whatever works for that agency. This allows a landlord to see how the property is being treated by the tenant, allows any mishandling or damages to be rectified, maintenance issues to be picked up and wear and tear to be identified over time. Routine inspection reports also minimise illegal activity within a property because an agency is regularly gaining access.
- PROFESSIONAL PHOTOGRAPHY AND MARKETING COPY – This makes a huge difference to minimising vacancies because it attracts attention and gets people to open inspections. Properties need to be presented at their best, that means professional photography, wide angle shots, using the correct photos with the right lighting. The property also needs to be clean and decluttered when marketing photos are taken. We have seen photos when agent or agent’s’ belongings are in the picture or pictures of a corner of a room or a closed window and these are just not professional. Marketing copy should be written by a professional copy writer and represent that highlights of the property and suburb. Not just “3Br house – air cond…” describing the features in abbreviated form is unacceptable.
- CONDUTCING REGULAR OPEN INSPECTIONS – Regular open inspections once or twice a week, during every week until leased is a must for the property. Also, open inspections need to be after hours to attract working tenants.
- MINIMISING VACANCIES – This means doing open inspections prior to tenants moving out or before a property settles, using the “leased time” to show new prospective tenants through will minimise the time on the market.
- HANDLING MAINTENANCE – Anything that can go wrong in a property should be handled by a PM whether it is a leaking tap or overseeing a complete renovation. They should have access to reliable trades (not always cheap people but reliable) who can handle anything any time of the day or night.
NUMBER ONE THING TO CONSIDER WHEN CHOOSING THE PROPERTY MANAGER
The number ONE thing you should consider when choosing a property management agent is experience and the ability to handle situations that have gone wrong. Any PM can handle properties when things are going right or simple arrears and maintenance. But….
- What happens when the tenant wants to sue a landlord for damages, or if a tenant trashes a property and absconds leaving property damage.
- What happens if an insurance policy reject your legitimate claim or offer a lower settlement amount? What if there was a fire or the roof was collapsing on the tenant. What about unapproachable tenants?
- Is the PM EXPERIENCED enough to represent your best interests when things go wrong? How quickly can they turn things around for you? How quickly can they take a trashed property and turn it back into a marketable rental?
Besides the PM having industry experience, find out what types of things have gone wrong over the years for that PM and how they have handled it? You really get to see the value of a good PM not when they are following the systems and procedures of their agency but when things have gone horribly wrong beyond protocol. A person who can think and perform well under pressure – that is your property manager.
The worst PM you could have is someone that works 9-5 and hates their job. Choose a PM that is actively involved in property management as a career and if you can, one who owns or has a share in the company they work with. That way they have a vested interest in managing your property correctly.
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