Managing your investment

March 21, 2017
Becky Thomas

Unlike other types of investments such as a term deposit or shares, a rental property needs ongoing management. Some landlords choose to look after the property themselves while others appoint a professional property manager.

DIY or property manager?

Taking a do-it-yourself approach will save money but there are many pitfalls involved in meeting the legal obligations of a landlord, and it can take time and money to deal with tenants, property inspections and co-ordinate property repairs.

Most landlords choose a property manager, and you can expect to pay fees averaging around 7% of the rental income for this service though this may be negotiable.

No matter whether you take a DIY approach or you use a property manager, it’s good to personally inspect the property at least twice a year. This will identify any potential tenancy or maintenance problems before they become a major issue.

Role of a good property manager

A good property manager should take the effort out of owning an investment property by:

  1. Guiding you on the market rent you should be able to charge for your property.
  2. Organising a new tenant including advertising the property, conducting inspections, interviewing tenants and checking references.
  3. Collecting rent payments and depositing the cash into your bank account.
  4. Drawing up the lease and managing the legal obligations of a tenancy including depositing bond money with the appropriate authority.
  5. Preparing a detailed inspection report at the start of each tenancy that details the condition of the property.
  6. Arranging and conducting regular property inspections before, during and at the end of each tenancy.
  7. Responding to tenants’ ongoing needs including organising emergency repairs if necessary.
  8. Providing regular statements for the landlord itemising rent received and any outgoings.
  9. Organising and attending tenant tribunal hearings if necessary.

 

 

Questions to ask potential managers

  1. How much experience do they have with your type of property?
  2. Does the agency have a dedicated property manager?
  3. Are clear management systems in place? Ask to see copies of standard forms or checklists used to manage tenants and properties.
  4. How often is rent (net of expenses) deposited into your account?
  5. How well are tenants screened? A good property manager will thoroughly check tenant references.
  6. How often are tenanted properties inspected?
  7. Does the manager have a list of qualified local tradespeople that can be called on for urgent repairs?
  8. How frequently does the property manager communicate with you?
  9. What is the management fee - is it negotiable?
  10. How often are income and expenses statements issued?
  11. What procedure is used for rent arrears, evictions and vacancies?
  12. Do they have good references and testimonials?
Posted in: Property investment

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