08 Sep 12
Often, when an investor buys their first rental property they decide that, to save money, they will manage the property themselves, collect the rent, attend to maintenance, source their tenants and handle all the paperwork. It doesn't take long before most of them realise that managing a rental property is not as easy as it appears, and they appoint a property manager, happy to pay their small fee and leave it all to them. It's not until a person actually takes on this role that they realise the amount of work, effort, organisation, administration and knowledge of the relevant legislation that is involved in property management.
Starting with the legislation, there are certain procedures that must be followed, tenancy agreements to be correctly completed, inspection records to be kept, rental bonds to be collected and lodged with the appropriate authorities, and other processes that a property manager is completely familiar with. Just in this one area alone, having the investment property under property management is a "no stress" decision, since the investor hands all of this paperwork and red tape over to the real estate agents who employ the property manager.
A real estate or property management agency has trained staff, computer and administration systems, a web presence, an advertising budget and a process for reference checking prospective tenants to see if there are any skeletons in the closet. This checking system on its own identifies tenants with a poor rental history. This prevents problems and ensures that only tenants with a sound credit record and good references are placed in rental accommodation.
The role of a property manager is actually a highly skilled one, and the exceptional ones have one particular skill in common. They are all excellent communicators, and this enables them to diffuse emotional situations, negotiate fairly and juggle the competing demands of tenant and lessor effectively. They are also extremely well organised and are very good at time management. These are the skills that enable them to efficiently manage multiple properties and keep them tenanted with quality people who pay their rent and treat the property like it was their own.
Keeping a property maintained is essential to attracting quality tenants, but at the same time the property manager must make sure the work they arrange is priced fairly, and done to a reasonable standard. As a representative of the investor, they must make sure that the property retains its value but is not over-capitalised by repairs and renovations that are unnecessarily expensive. Having a professional manage this aspect of the property is another benefit of having your rentals under property management.
The benefits of having your rental properties managed by a professional far outweigh the fees charged. They effectively take on all the worry, hassle and stress, leaving the property owner nothing to do but check their income statement every month.