Purchasing an investment property, particularly your first, is an exciting time for those looking to set themselves up for a comfortable retirement. Money is often a major consideration at this time, with the costs associated with the loan set up, deposit and bank repayments, meaning every cent is stretched and it can be tempting to try to cut corners in an effort to maximise profits.
With this in mind, some investors decide to manage their properties themselves – opening up the home to prospective tenants and trusting their luck that they will pick a reliable tenant who will pay on time and respect their property. Many quickly discover that the demands of managing even a single property is just not worth their time and effort.
With licenced property managers now embracing mobile technology, enabling them to share information with both tenants and landlords in real time, the leasing process has become far more controlled and inclusive. An example of this is property management by My Rental, a real estate management company in Melbourne who has set-up services to fill a gap in the market, by initiating transparency through a property management app. With this technology at your fingertips and property management fees at around four percent, a better question than ‘should you invest in property management’ would be, why wouldn’t you?!
What does property management involve?
Before we look at the advantage of having a property manager on board, let’s look at selection of the vast array of responsibilities and demands involved in renting out a residence:
- Marketing the property
- Attending open for inspections
- Screening tenants and reference checking
- Drawing up leases
- Holding and transferring monies such as bond
- Conducting regular inspections and writing reports
- Organising and monitoring fire alarm compliance
- Organising repairs and maintenance
- Liaising with tradesmen and deliveries
- Monitoring, reporting and disbursing rental payments
- Dealing with issues reported by tenants
- Attending VCAT (residential tenancy tribunal) to resolve non-payment issues of tenants and other breaches of contract.
Whilst the list above is not comprehensive, it can be appreciated that the range of demands on a property manager are diverse and often complex. The criteria required to become a leasing agent involves gaining an estate agent’s licence through a course which covers the guidelines and regulations surrounding property sales and management in Victoria.
Property managers are required to have a solid, working knowledge of the plethora of mandatory responsibilities and laws incumbent on landlords which are outlined in the Residential Tenancies Act of Victoria. For the average property investor, the time-consuming minutiae required to maintain a property, is just not worth their time; that is where property management agents come to the fore.
Buying property as an investment means that for most landlords money is the central driver. Do some number crunching and you many be surprised to find that engaging a hardworking property manager is a money saving exercise. How is this possible? Primarily by identifying, securing and retaining optimum tenants.
The Value of Good Tenants
Excellent tenants are gold for landlords – they deserve and demand fast and effective responses to issues, a well maintained property and management which they know are available and communicative. For a fee of around four percent, a hardworking property manager can pinpoint ideal tenants for your property and facilitate signing them up.
Many first time investors greatly underestimate the amount of paperwork, time and energy it takes to run a rental property. Add up what your time is worth and compare it to the cost of a managing agent.
Property investing can be and should be, a pathway to growing your wealth. With the Australian property market becoming more affordable by the day, this is the time to consider investing in a solid rental property and securing a hardworking, property manager who will work to keep your investment producing and running smoothly.
If you have decided to begin building a healthy investment portfolio through real estate, one of the best weapons in your arsenal should be a knowledgeable, reliable and hardworking property manager. Together, you can form a partnership which will produce meaningful dividends both now and in the future.