SA How to Maximise the Potential of Your Investment Property Through Effective PROPERTY MANAGME

Probably should have put this up last week but I have been very under the pump.

Just a quick reminder for this Tuesday.

If you own an investment property in Adelaide then you need to attend our seminar on effective How to Maximise the Potential of Your Investment Property Through Effective Property Management.

DATE: Tuesday July 26 2016

VENUE: The ALEXA seminar series will be held at the Robin Hood Hotel; 315 Portrush Rd, Norwood

COST: FREE

TIMES: Please arrive at the venue before 6:30pm. The live trainings begin at 6:30 pm and conclude at 8 pm - Networking sessions begin at 8pm.


REGISTRATION: Register your attendance here: Adelaide Property Network

In the mean time, here are 5 simple ways to maximise the potential of your investment property. Please email me for any feedback, feel free to share the article and I look forward to seeing you at our next seminar.



How to Maximise the Potential of Your Investment Property
Here are 5 ways to maximise your rental income that I’ve learned over the years from managing hundreds of properties through our property management department:


1. Keep Your Property Updated

Tenants will pay a premium for properties that feel fresh and clean. You do not need to have the latest modern appliances nor do you need to do a complete renovation. Consider painting, replacing worn out or stained carpets and replacing blinds and curtains. These are cosmetic changes that can really lift the property, increase competition amongst tenants and achieve a higher rent.


2. Long term leases

Six month leases can be beneficial in some circumstances but where appropriate go for a 12 month lease. This will ensure a longer commitment from tenants and uninterrupted cash flow.


3. Minimal or ZERO vacancies

The best time to show prospective tenants through a rental property is when other tenants are still paying the rent. If your current tenants are not renewing their fixed term lease they need to give you 28 days notice or 21 days notice for a periodic lease agreement. A great property manager will use this time to advertise the property for rent, show prospective tenants through the property and, where appropriate, carefully coordinate the move in date of one tenant with the move out date of the existing tenant so that there are zero or close to zero vacancies.


4. Consider Pets

With 56% of Australians having pets and 25% considering getting one in the future, that’s a huge market of potential tenants to tap into. If your property is pet friendly you have the potential to achieve premium rent and lower vacancies as pet owners are willing to pay premium rent to keep their furry family members with them. Please ensure that your property manager has a pet clause in the lease to protect your interest. My experience is that responsible people remain responsible even if they have a pet and irresponsible people will continue to be irresponsible whether they have pets or not. With so many pet owners applying for properties, sometimes not allowing pets can be a very costly and risky opinion to have as it really reduces your market.


5. Proactive Property Management

A proactive manager notices a water leak in the bathroom vanity and gets it fixed. Tenants report that the front lock no longer works and she will have someone there to rectify the problem immediately minimising your risk of security breach with the tenants. A proactive property manager will notice that a vacate clean is required and get it done, even after hours to ensure that the property is ready for the next tenant.


A reactive property manager will email you a list of problems and ask you what you want to do, he will not have quotes or solutions at hand. He will stall and procrastinate on new tenants if the property is not rent ready, he will not work after hours to get things done.


The difference is huge, one will minimise your exposure to risk and tenant compensation for maintenance not being done and the other one will increase it. A proactive property manager will minimise vacancies in the property and a reactive property manager will increase them. It makes a huge difference to your bottom line.


Things to Remember

• Keep properties unfurnished – Furnished properties are very niche, very transient, there are more vacancies and more maintenance. Unless it’s a $1200 per week executive residence with exquisite Italian decor and in a prestige suburb, keep it unfurnished. Furnishing the wrong property will deter tenants from applying as, apart from a specific niche market, most tenants want to use their own furniture.

• Long term leases only – short term leases create more vacancies, more costs and more letting fees if you are using an agent.
• Keep away from Rental guarantees – the cost is priced in and you pay for it.
• Never Get involved – keep at arm’s length – use a professional property manager and let them do their job.
• Don’t Self-manage- it’s harder than you think! Good Property managers make you money
• Don’t let your leases expire at quiet times of the year like around Christmas time, when signing leases in December consider a 13 or 14 month lease so they expire in January or February.
• Remember you don’t know everything – take feedback and advice from your trusted team of advisers, if you are the smartest person on your team then you are running an adult day care.

 

^^^ this, more than anything else you have written. This is something that escapes many people. You are paying someone to make you money, not lose money. My parents insisted on sticking with a property manager who was losing them money:- not chasing up late rent, not conducting rent reviews, making incorrect claims for repairs. If your property manager is not making you money, find one who will.

 

It's on tomorrow night

 

A good property manager should know how to get things through and get the job done faster and more efficiently than you can.

We can only work within the instructions of the landlord though and where there is a lot of fear and emotional attachment to a property, we are unable to do the job efficiently.

I think the bottom line is; if you have a peculiar, specific way of doing things, then manage it yourself.

If you do employ a property manager - get out of the way and let them do what you are paying them to do.

 

Yes, this is definitely the difference between a good property manager and a bad one. In my parents case my dad kept onto their property manager for more than a year to increase the rent. By the end the property was $150 per week under market... and he still would not change agencies.

And what if they are not doing what you are paying them to do, like in my parents case they instructed their PM to follow up late rent and conduct rent reviews. Any tips on managing PMs that won't do what you are paying them to do?

 

A million times this ^

Then unfortunately you chose the wrong one and will need to choose another.

 

Sometime you wish that they will pick up the slack
I have the PM agreement termination sent today, tired after months of follow ups and sub-par communications and follow ups.

Hoping the new one would be far better.

 

The worst thing you could have as a pm is an employee that hates their job and their boss. If they have a vested interest, skin in the game, within the business they will pick up the damn phone.

Slackness hurts business profits and only an owner will care.

 

Good advice.

@Xenia you have the notches on the board, experience under your belt is everything.
I would never manage my own properties and have had just a few dramas, this is where you need someone who understands, been through hell and back and cant emphasise how important experience is.

MTR

 

Thanks MTR
still learning all the time too. It's ongoing....

 

Nice article. How do you choose a best PM just from online resources? For busy investors, is there an easy way to find the best PM in that matket without too much hassel?

Also whats the best way to dismiss your poor performing PR?

 

How do you find a good PM?
We need to tenant our new IP from the start of Sept, once we have completed the reno on it.
We obviously can't have anyone market it yet as it's currently looking like a building site rather than a house!
I have no idea where to start looking for a PM. Should I be using a local agency or can you use someone recommended from a different suburb?
Am I likely to have it leased faster if using a local? Does anyone have any recommendations in Melb?

 

My recommendation would be to go for a principal agent who has decided to specialise in property management instead of sales.
If you are dealing with an owner they are focused on turning things around once they have gone wrong.

The worst thing you can have is an employee working 9-5 who hates their job.

The main question I would ask is how they handle things that have gone wrong.

Any idiot can manage a property when things are going smoothly.

What happens when things go wrong and it's within their office?

Be ware of sales tactics and egos if nothing had ever gone wrong and they are perfect don't use them, what's lurking behind that desire to hide?

I like to work only with real people. Just keep things real, not perfect or ideal but honest and real. I run my business and life this way.

Things go wrong all the time in property management and anyone who tells you otherwise is lying and acting through pure ego - yuk don't go there, they will cover up mistakes to save their reputation at your expense.

Finally look up @Lil Skater she seems to be hands on and runs her own business and operates in Melb.

 

Great advice, and of course thanks for the shout out @Xenia