Managing Your Investment Property

Having purchased your investment property, you need to decide whether to appoint a property manager.

This article looks at what a good property manager can do for you.

The temptation as a landlord is to look after your investment property yourself. By doing this you can keep your expenses down by saving on the property management fee, which typically ranges from 5% to 10% of the gross rental.

Should You Manage The Property Yourself?

However, there’s a lot more to managing a property than first appears. For example you need to market the property; screen tenants; set up a rental lease; be mindful of the legal requirements; maintain the property (including organising tradespeople); inspect it regularly; collect the rent; pay the rates and maintenance bills; negotiate rent increases; and deal with any disputes.

Of course you can do all this yourself, but do you have the time and the skills? Also, if your property is located some distance away then this makes managing the property yourself even harder.

The alternative is to employ a professional property manager. But what exactly can a good property manager do for you?

Marketing The Property

As a landlord you want to maximise your rental income. This means that any vacancies need to be kept to a minimum, and the rent is set and kept at the best rate attainable.

A property manager should know the local market and what comparable properties are renting for. They will therefore be able to advise you on what rent to ask for. Also, they will be able to recommend some minor improvements to enhance the property’s appeal and rental value.

Importantly, they will know how to find tenants for you. This may include advertising in the paper and on the internet, displays in their office, and reviewing the prospective tenants on their database. They should also have good contacts with any good sources of potential tenants, for example local colleges. They should also have other marketing strategies that they can use.

Renting The Property

“A good property manager will save you time & money.”Once there are some prospective tenants, they need to be screened. You want tenants that will pay their rent diligently and look after your property.

The property manager should interview the tenants; check references from previous landlords; and understand their employment status and history.

Part of the property manager's role is to show the property to prospective tenants, which can be a very time-consuming task in itself.

Then, once a suitable tenant has been found, the rental lease needs to be organised, drawn up and signed. The lease should allow for regular rent reviews, or be short enough to allow for a rental increase on renewal.

Looking After The Finances

Once the tenants have been found and have moved in, the focus of the property manager switches to ensuring that the tenancy runs smoothly.

On the financial side, they will be responsible for collecting the rent, paying rates, paying for any maintenance and repair work, depositing the net income into your account promptly, and accounting for it.

If any problems arise with the prompt payment of rent, you want to be confident that the property manager will actively manage these arrears and get the payments back up-to-date as soon as possible.

Maintaining The Property

As the landlord you have the responsibility to ensure the property is maintained in good order. At various times you may have to employ the services of a gardener, pool maintenance firm, cleaners, painters, plumbers, electricians and general repair people!

"Is your property being cared for?"A property manager should have extensive contacts in these various trades, will be able to organise competitive quote and then coordinate the work and access to the property with the tenants.

You also want to know that the property is being cared for by the tenants. The property manager should complete regular property inspections and report back to you on their findings.

Knowing The Legal Framework

It is important that the property manager understands the legal requirements of tenancies including the keeping of accurate records and good systems. This is particularly important once disputes arise, as they are sometimes settled at a tribunal that will ask to see the evidence of what has happened.

Communicating With You

You need know what’s happening with your investment. A good property manager will keep you informed, nvolving you in decisions only when necessary, and will also be in regular touch with the tenants. By doing this, they keep everyone happy and ensure that your investment working for you.

As a landlord you may choose to manage the property yourself. But for many, the benefits of employing a professional far outweigh the additional costs.