Ever wondered what a property manager does? Here’s a quick guide
More than 2 million people own one or more investment properties in Australia, and that number is growing every year. So, whether you’re thinking about investing in property for the first time or you already own properties that you lease, it’s important to know what to expect from your property management agency.
Unfortunately, not all property managers are equally skilled and qualified, so here’s how to determine if you have the right people to help ensure your investment property is maximised to its full and profitable potential at all times.
Property management fundamentals
Despite what many people think, property managers don’t just collect the rent on behalf of owners and landlords – our role involves a lot more than that. In a nutshell, property management is the management of residential and/or commercial buildings – maintaining, leasing and selling them at the right time for the right price.
It’s also worth noting that some insurers require a property management agreement to be in place as a condition of insurance.
Properties can be managed either through a real estate agent and property manager, or managed independently by the investment property owner themselves. Doing it yourself involves considerable time, being an effective communicator and having the ability to be ‘on the ground’ whenever necessary – which can be a problem if you have several properties or don’t live near your investment property. Opting to use a professionally qualified property manager means you’ll have someone who is familiar with the legislation, able to ensure your property is compliant, and on hand to deal with NCAT tribunals should a dispute arise.
Looking at residential property management, here are the key services that a professional property manager should offer:
- Prepare the property for lease
- Find suitable tenants
- Organise the terms of the lease
- Oversee maintenance of the property
- Manage maintenance bills
- Conduct regular inspections
- Resolve any disputes between tenant and landlord
- Organise payment of rent
- Follow up any arrears
- Knowledge of legislation relating to rental properties
Essential property management skills
A good property manager needs to have a range of skills to work effectively on behalf of the property investor. It should go without saying that they will be focused on maximising the investor’s rental return. That means understanding negative and positive gearing, ensuring the property is as tax effective as possible and being proactive about offering ideas that might add value to the property and enable you to lease it for a greater amount.
Having a roster of reliable local tradespeople for maintaining properties and preparing them for lease or sale is also essential.
Because the property manager is the main contact person for both the landlord and tenant, he or she needs to be a calm, organised communicator. Emotions can run high on either side if there’s an issue that is not being promptly addressed and the property manager should be able to negotiate between both parties dispassionately.
Retaining happy tenants is key to keeping vacancy rates as low as possible. On the other hand, if a tenant is breaking the terms of the lease or not paying rent, the property manager rather than the landlord becomes responsible for dealing with the problem.
Local leasing knowledge
It’s hard to overstate the importance of a property manager knowing their local market inside out, because their role is to find (and retain) tenants for the landlord’s property. Your property manager needs to know what the rental rates are for different types of properties in the neighbourhood and the current level of demand for rental homes.
A well-informed property manager can also advise the investor what, if any, improvements could be made to their property to attract the best-paying tenants, simply by knowing what comparative properties in the local area are yielding in rents.
Advertising properties at the right rental price and knowing what tenants seek in a property ensures you not only source a high quality tenant but have the property leased as swiftly as possible – again, the goal is to keep vacancy rates low and income levels high.
Commercial property managers
Commercial property managers should possess a similar skillset as residential property managers. However, they need additional knowledge about business requirements for properties that range from shops and shopping centres to factories, office spaces and storage facilities.
If you are a landlord with a rental home in The Hills District or looking to invest in a property within the region, and would like some local insights or property management expertise, please do not hesitate to get in touch.