A skilled property manager is crucial in helping investors maximise returns, understand the market and enjoy smooth sailing as a landlord.
The latest figures from the Australian Taxation Office (ATO) show 2.2 million Australians own at least one investment property. But selecting and purchasing a property is just the first step.
Optimising the long-term returns on your rental property is an ongoing process – one that calls for careful tenant selection, ticking all the boxes for legal compliance, and conducting regular inspections and maintenance. A good property manager will do all of this.
But a great property manager – one who offers a truly value-added service, will go much further.
We take a look at what a property manager does, exploring the key role they play in the property investment process, and offering tips on how to choose a property manager who can help you maximise returns.
What is involved in property management?
Engaging a property manager will mean paying management fees. But it’s likely to be money well spent. A professional property manager will almost certainly save you time and money – and help to maximise the returns on your property.
As a guide, below are just some of the things you can expect from a standard property management service:
- Coordinate the advertising of your property
- Screen prospective tenants
- Conduct rental viewings
- Organise and oversee rent collection
- Follow up on rental arrears
- Conduct regular rental inspections
- Arrange to pay outgoings on your behalf i.e. council and water rates
- Represent you in third-party dealings involving strata matters and insurance claims
- Coordinate repairs and maintenance (including liaising with contractors, organising access to the property, and conducting re-inspections on completion)
All this activity can be very ‘behind the scenes’ from the investor’s perspective. But landlords who opt for a DIY approach can soon discover just how much time and effort goes into quality property management – especially if they own multiple properties.
The other major reason many owners opt for professional management is property compliance.
The rising technicality of tenancy legislation and requirements from Australia’s governing bodies is becoming one of the hardest parts of managing a tenancy. The cost of getting this wrong is reason enough for most owners to engage a professional property manager.
What can a property manager do to be pro-active?
The type of service you receive can vary between property managers.
While many property managers offer a ‘standard’ service, choosing a property manager who is proactive in their approach can be invaluable in reducing your costs and adding value to your portfolio over time.
Proactive maintenance to reduce long-term costs
One aspect of this can be approaching maintenance with a preventative approach, rather than waiting for problems to arise before taking action.
Momentum Wealth’s property managers recommend regular termite and electrical compliance inspections on our owners’ properties – keeping an active tab on items that could lead to serious safety issues and costly damage if left unattended.
A proactive maintenance approach not only keeps the property in great shape, it supports capital growth, and provides peace of mind that you’re meeting legal responsibilities to maintain a safe dwelling.
Protect investors’ interests from day one
A good property manager will look for ways to protect your interests and minimise potential costs throughout the entire management process.
As an example, the property management team at Momentum will identify special lease conditions that offer additional protection over and above standard lease contracts. This can range from conditions around protecting polished floorboards, to mitigating damage to outdoor areas by preventing parking on lawns.
What should a property manager do to add value?
A property manager with a proactive approach helps investors reap the full rewards of their asset in four key ways:
1- Ensuring rents grow in line with the market
Without regular rent reviews, investors will often find themselves falling short when it comes to rental returns.
In a cooler market, pricing your rental property poorly often means facing hefty vacancy periods which chew into your overall returns.
In a hot market, investors who fail to review their property’s performance regularly will often miss out on upticks in market rent, resulting in lower than expected yields. Momentum Wealth overcomes this risk by recommending lease contracts that allow for more frequent rent adjustments in hotter market conditions. This ensures our investors earn rents that continue to grow in line with the market.
2 – Tailored advice for value-add strategies
Rental properties often have untapped potential. A proactive property manager will explain how you can make the most of your investment, offering recommendations on strategies to enhance rental value through tactics such as minor additions or renovations. It’s all about knowing what tenants are looking for – and giving property investors the benefit of that knowledge.
3 – Sharing the latest market intel
Landlords tend to receive fairly standard communications from their property manager – maintenance reports, monthly statements, end of year tax details, and maybe an annual Christmas greeting.
But when you have selected a property manager to be part of your wealth creation team, it’s fair to expect more.
Momentum Wealth look at the bigger picture when it comes to property performance, keeping our property owners updated on the latest market changes that could impact their investment property. This intel can range from local market updates to information on the latest lending changes, and important updates on local zoning changes that could impact a property’s potential.
4 – Holistic recommendations
At Momentum Wealth we see your investment property – and the role it plays in growing your wealth – as a sum of many parts. That’s why we provide holistic recommendations that look to maximise your investment cashflow and improve your rental returns from all angles. This may include:
- Reviews of your investment loan through our in-house finance brokers
- The implementation of special lease clauses to maximise your rental income
- Recommendations for short and long-term value-add enhancements
- Identifying opportunities to make your property work harder, such as a dual income strategies or development
In this way, we help you understand and realise your property’s full potential, accessing the property investment expertise across our various divisions to help you achieve the best outcome for your portfolio and long-term wealth.