Managing your own property is not for the faint of heart – there’s a reason people do it for a full-time job. If you don’t have the time to manage your real estate portfolio anymore, or are searching for your first investment and don’t quite know the lay of the land, it could be a great time to hire a property manager.
According to the Real Estate Institute of Australia (REIA), a property manager undertakes a host of tasks on a regular basis for every property they manage. Firstly, your property manager will have an excellent knowledge of market rents. This will help them give you an informed appraisal of your investment’s rental value, as well as make sure they are marketing the property to the right people. Negotiating the lease contract is another big task that can require a lot of specialist knowledge.
Other tasks on your property manager’s to-do list will be collecting rent, organising repairs and even representing you at a tribunal hearing in the unfortunate event that one is necessary. Not only is this a list of things you as an investor probably don’t have time for, but these are things that require a fair bit of know-how.
There is a pretty complex screening process that an agent should go through when selecting tenants for a property. The key thing to remember is that these potential renters want to leave their old place of residence – is there any particular reason for this? Not every tenant is a ticking time bomb, but a few are and it’s important to make sure you are giving the key to your house for rent to the right people.
Marketing is the first stage of selecting a tenant. For this, the agent will have a sound understanding of the market rent value for your real estate, as well as knowledge of what kind of tenants it would suit and how to market to them.
Once having gone through a few showings and email enquiries, chances are they would have a short list of potential tenants.
These people then need to be screened by phone in a very similar way to a job interview. Once the short list is reduced to a smaller pool of candidates, face-to-face interviews can take place. What needs to be established at these meetings is why the tenants left their last rental property, when they need/want to move by and what kind of tenants they are. This is determined by their job security and level of income, whether or not they will be living alone, if they have pets and of course what kind of references they can provide.
Aside from talking about the points mentioned before, prospective tenants need to be independently verified as well. This will require a bit of digging on the part of the property manager, which may include calling up previous agents, employers and a local tenant registry to see if they have been listed as bad tenants.
Of course this is not the end of the road. A lease contract needs to be negotiated and agreed to. This contract will detail many aspects of the lease terms, including duration, rent to be paid and when inspections or rent reviews will take place.
Of course there are a myriad of tasks to be undertaken when it comes to property management. Aside from regular inspections to ensure the house is being looked after, there is maintenance to be arranged and rent to be collected. Ensure that you have a robust rent collection system – if you forget to check if your rent is coming in, a tenant may take advantage of that fact.
This is where a property manager comes in handy – not only will they collect the rent for you, but they will have very strict arrears policies in place. Aside from these daily tasks, an effective property manager will also provide you with summarised reports of what is going on with your property, so you can still stay connected to the process.