So, you’ve finally secured the purchase of your first investment property, and decided to engage the services of a property manager to keep on top of it for you.
Or perhaps you’ve built a solid little portfolio of a few properties that you’re finding it hard to juggle, so you need a property manager to take over?
Most Australian landlords use property managers, but what exactly are they supposed to being doing (other than collecting rent) to earn their fees and show their value?
More to the point, how can you be sure you’ve scored yourself a top-of-the-line property manager who will actively contribute to growing your investment?
Here are five tasks your property manager should be taking care of for you, so you can relax and watch your investment grow…
1. Arrange open inspections:
Your property manager will arrange, advertise and supervise any open days for prospective tenants.
Check your contract for their terms regarding advertising – for instance, do they list the property online at no extra cost to you?
What about putting up a “For Lease” sign out the front, is that included?
Once you have those details sorted and the open day is scheduled, your property manager will attend on the day on your behalf.
They will field any enquiries from prospective tenants, and take down the names and numbers of the groups who come through so he can follow up with them.
Some agents have a policy to check photo ID at inspections, which is a good security measure if you have the current tenants still living in the property.
They’ll also process all the applications and do background checks, so they can present you with the most desirable tenants to choose from.
2. Organising repairs:
If you’re managing your own property, you could be dealing with a burst pipe at 2am while the rest of your family is sound asleep.
By using a property manager, you’ll have a contract that will include a clause for urgent repairs that the property manager can authorise, without needing to bother you.
Experienced property managers also have loads of great contacts, and can often get the required work done for a fraction of the price through one of the tradespeople they have on their books.
Or for a bigger job, they can organise a few quotes for you to select from, saving you the hassle of shopping around.
A well-heeled property manager will also have a good general knowledge of all things related to household maintenance, and may often be able to solve a problem before you even need to call in a tradie.
In fact, it could be as simple as having the tenant flick a switch or check an appliance, potentially saving you hundreds of dollars.
3. Routine inspections:
Your managing agent will have a policy for conducting routine inspections, usually every 12 months, to ensure the tenants are taking good care of your property and keep an eye on any maintenance issues.
There are several advantages to outsourcing this, in particular, the fact that they are able to look at the property through an objective lens, rather than being clouded by emotions, as can be the case for an owner.
They’ll be able to spot problems before they become more difficult and expensive to rectify, and check for safety issues, such as whether or not the smoke alarms are working correctly.
4. Develop a good rapport with your tenants:
Re-advertising and re-letting a property is expensive, not to mention the financial impact of the week or months it may sit vacant while you search for new tenants.
By establishing a good relationship with your tenants, your property manager can help minimise all this stress and expense.
They will have a procedure for periodically gauging interest in extending the lease, and will handle all the relevant documentation and communicate with the tenants for you.
While your property manager may encourage you to do a bit of maintenance to placate the tenants, keep in mind that this is an investment in your asset.
So you can rest assured that their intention is to do everything in their power to keep those great tenants locked in for another 12 months or more.
5. Know when to increase the rent – and by how much:
Being an expert in the local market, your property manager should know how other similar properties are currently priced, and be able to guide you on how much you can realistically increase the rent by when the tenants’ lease is due for renewal.
Juggling your expectations with what the tenants can afford can be tricky, but a good property manager should be able to keep both parties satisfied, and in doing so minimise those costly vacancies we spoke about above.
Of course, there are far more tasks a property manager performs than those listed above…
– they also screen potential tenants through databases,
– run reference checks,
– pay council rates on your behalf,
– and manage your investment in accordance with the law.
They can even represent you in mediation if a situation becomes sticky.
Most landlords find that a property manager adds plenty of value to their investment journey – and for the relatively small fee they charge, they can be worth their weight in gold.
Subscribe & don’t miss a single episode of michael yardney’s podcast
Hear Michael & a select panel of guest experts discuss property investment, success & money related topics. Subscribe now, whether you're on an Apple or Android handset.
Need help listening to michael yardney’s podcast from your phone or tablet?
We have created easy to follow instructions for you whether you're on iPhone / iPad or an Android device.
Prefer to subscribe via email?
Join Michael Yardney's inner circle of daily subscribers and get into the head of Australia's best property investment advisor and a wide team of leading property researchers and commentators.