Do you need a property manager?
Many investors underrate the value they add, but a good property manager can play a pivotal role in the success of your investment.
Most of us have barely enough hours in the day to manage our own households, with work, kids, groceries, home maintenance and other chores to attend to. But once you purchase an investment property, you’re responsible in many ways for managing your tenants as well.
If you would rather not deal with the day to day responsibility of renting out a residential investment property, you may want to consider using a property manager.
Finding the right one is crucial since their responsibilities will be wide ranging – from liaising with tenants to keeping your property safe and secure.
When should you consider hiring a property manager?
Of course we think property managers are an essential partner for any successful property investment, but here’s a look at particular scenarios where they are super important.
- You don’t live near your investment property. Having someone close by your investment property with local connections, knowledge and the ability to attend your property quickly, will offer you peace of mind.
- You’re not interested in hands-on management. You may not want to spend your days collecting rent, arranging repairs, conducting property inspections, keeping trust accounting accounts and records, filing bonds, locating tenants, adjudicating disputes, managing tenancy breaches, reviewing legislation and lease paperwork, renewing rent and leases to name a few investment property related activities.
- You don’t want a relationship (with your tenant). With your tenant. Many people find it easier to use a third party to manage day to day tenancy issues, as many are sensitive and often can lead to difficult conversations such as bond inspections. Using a property manager, you don’t need to have a relationship with the tenant & be placed in difficult situations.
- Your time is limited. You may not have the time to invest in managing your own investment property.
- You can afford the cost. After weighing up time versus cost. You decide you wish to use a property manager. Ensure you research what service you will actually get and what you are paying for them. Don’t forget the fee’s are tax deductible.
- You have multiple properties or rental units. The more rental properties you own and the more units they contain, the more you’re likely to benefit from a management company to manage all the tasks and people involved in the process for you.
How much service do you want?
First, you will need to consider your expectations for your property manager’s roles and responsibilities. Depending on how much time and money you want to commit, there are two options: a leasing only or a leasing and maintenance agreement.
As with all investing issues, the next step is to do your research. Find out the rental amounts for properties in the area where your investment is located, and familiarise yourself with relevant tenant-landlord laws. Note that these differ from state to state.
The key roles of a Property Manager:
- To maximise your return on your investment and to minimize your exposure to risk
- Advertising your property for rent
- Open your rental property for viewings
- Screening tenants including reference checks, rental history review
- Manage the condition report process
- Manage the tenancy agreement signing process and handling questions
- Manage your financial accounts for the investment property and provide regular reports
- Inspect the property on a regular basis
- Organise tradespeople for repairs and maintenance
It is also important to check the property manager’s processes. How does the manager go about finding new tenants? What kind of background checks do they complete? And how do they handle disputes with tenants?
Before you enter into an agreement with a property manager, make sure you thoroughly read your rental agreement. Make sure you are able to release yourself from the relationship if they are not doing a good job.
Finally, be sure to keep in regular contact with your chosen manager for at least the first 12 months to ensure they are doing everything possible to make your investment successful.
What are the benefits of using a Property Manager?
1. More thorough rental checks – many tenants with an unfavourable rental history, prefer to rent privately, as not as many history checks are made.
2. Fewer problem tenants – experienced property managers see hundreds of rental applications and are experienced at screening tenants, reference checking and reviewing rental history to ensure you receive high quality tenants. You of course have the final say as to rents your property.
3. Avoid unpleasant confrontations – They are a buffer between you and the tenant – a property manager will help deal with problems such as late payments through to damaged property.
4. Tenants have someone to talk to right away – if an issue happens with the property, property managers are more accessible to address problems all hours of the day. Our negotiating power with tradespeople ensure you get the best price on all maintenance jobs.
5. Decrease tenant turn over – good property managers know how to keep their tenants happy and happy tenants are more likely to want to stay and renew their lease.
6. On time rent – good property managers will work to ensure your tenants pay their rent on time. Consistent rent collection is the key to receiving rent payments on time and they will enforce lease policies if payments aren’t received.
7. Less stress – someone else is managing your property and tenants so you don’t have to worry as they will do most of the work for you.
8. Strict legislative requirements – Private owners are bound by the same legislative requirements as property managers in their dealings with tenants. This means that if you are taking the task on yourself, you will need to stay up to date with constantly-changing legal requirements. So choosing a property manager to manage your investment property can be a wise decision that may save you time and money over the long term.
9. Comprehensive Insurance – You’ll also find that landlords who enlist the help of a property manager may be eligible for more comprehensive insurance cover and other advantages.
10. Reduce your Risk – By engaging a property manager you reduce the chance of having a vacant property therefore lowering your risk of lost income.
11. Property managers are “people in the know” they know the legislation inside out – meaning they know what tenants can and can’t do. They are also well connected with local trades people and can get you quality jobs done for a reasonable price. If you live locally to your property manager, they might even be able to connect you when you wish to conduct work on your home.
Owning an investment property can be a daunting experience with so many duties and responsibilities that come along with it. Luckily, you don’t need to go through this journey alone. Hiring an experienced property manager can take ownership over some of these tedious (and sometimes painful) tasks that can overwhelm even the most seasoned property investor.
Realised you’re ready for a property manager? Our team of professionals at Harveys are not only experienced but aim to build a long and successful relationship so you can relax knowing your property is in capable hands. Request a free rental property appraisal today to get started.