What you need to know about property management
If you’ve recently purchased or are looking to purchase an investment property, you’ll likely want to engage a property manager to cover all the day-to-day tasks of the property. Property managers are employed to give you a maximum return on your investment while keeping your property compliant and running costs as low as possible. Property management could be smooth if you have an expert property manager.
That’s not an easy thing to do, considering the government’s growing list of compliance regulations that ensure your property is safe and comfortable for your renters. Alternatively, you can manage the property yourself, which is the case in around one-third of Australian rental properties – but as you’ll find out below, the tasks and challenges of property management can be exhaustive.
What is property management?
Put simply, property management is the operation of managing a rental property. This can be carried out by an individual, like the property owner, or a professional property manager, such as a real estate agent. While some owners may have the time and skills necessary to manage their property, property managers are experts in their field and have likely experienced all different kinds of scenarios which can create difficulty down the track.
The property manager has a wide range of tasks they must undertake in the lifespan of a property, which includes initial marketing of the property, renter sourcing, ensuring property compliance, maintenance and sometimes project management of minor renovations. The demands of property management may differ in frequency and intensity, but they never completely stop.
What does a property manager do?
The responsibilities of a good property manager are significant and include:
Marketing and sourcing tenants for the rental property
You’ve bought your investment property and it’s ready to rent. You’ll need to get the word out. The marketing of the property will be a key step in sourcing a quality tenant. Your property manager will offer one or two marketing packages that are proven to work at your level of tenancy.
Variants can include which professional services you may use (photographers, videographers, floorplan artists, copywriters), and what platforms you will use during the marketing campaign (including internet, brochures, property boards and mail cards). A good property manager will understand what is required to get the best tenant, based on the state of the market and the condition of the property.
A property manager will have to respond to enquiries and manage property viewings with potential tenants. Once candidates have applied for the rental property, they will undergo screening processes to check their validity, including reference checks, credit score database searches and employment history reviews.
- Organising the official documents
A rental agreement, usually created and regulated by the REIV or Consumer Affairs Victoria, is the official document that enforces a lease. A Residential Tenancy Bond Authority is also signed with a bond paid and held in trust by the Residential Tenancy’s Board.
A Condition Report is also prepared, so that both the tenant and the property manager or property owner agree about the state of the property prior to the tenancy. These are all very detailed documents that must be completed before keys are handed to the tenant.
A finger on the pulse of the market value
As the property market is in flux, we have seen a significant increase in rental property values since the start of 2022. A professional property manager will be in tune with suburb-specific price fluctuations for your type of property and recommended where your property sits in the rental market. Like with all things, supply and demand determine a property’s worth, to get you a healthy return.
Maintenance and inspections
A property manager’s day-to-day role responsibilities during your tenancy are to rent collections, maintenance, and routine inspections. Ideally, the rent will be paid on time and collected systematically by the property manager. If payment is late, they must go through a detailed process.
Phone calls, emails and possibly even reporting to VCAT can put a dampener to your property manager’s day, especially when they get no response. Routine inspections are generally the nicer part of the property management role as it’s an opportunity for your property manager to create a relationship with your tenant.
While there is a process to perform, a good property manager will not judge how your tenant lives but give them reassurance that they are there to ensure the property is maintained to a fair and reasonable standard and report any minor or major concerns back to the owner. Routine inspections can only be carried out after the first 3 months of the agreement, then every 6 months at the most each time after that, giving the tenants a minimum of 7 days’ notice at an agreed upon time (usually between 8am and 6pm).
Video chat inspections can be performed by some property managers, should finding time for an in-person visit prove difficult. Maintenance comes under two headings – urgent and non-urgent maintenance and/or repairs. Your property manager will have a selection of qualified and reputable trades to be able to do the maintenance quickly, because they know the rental laws.
Keep the property tenanted
Once a tenant gives their notice to vacate, an outstanding property manager will ensure that there is a reduced or no-vacancy period between tenants. After consultation with you, they will reassess the property’s rental value, advertise the property for lease, and have rental applications of potential candidates ready to choose. They will have done a pre-vacating report to ensure the property is in good condition for the new tenant or organise any minor repairs or maintenance before the new tenant takes possession of the property. The chosen tenant will be signed up with their bond paid, and ready to go.
What’s the cost of a property manager?
Property management fees in metropolitan Melbourne generally fall under the 5% – 10% bracket of the total weekly rental charge. There are various other fees that come into play, particularly during the initial stages of finding tenants and marketing the property, which is further detailed in one of our previous blogs. The cost of your property manager is completely tax deductible, and the stress of having someone look after each step is well worth the investment.
To speak to a respected group of property managers specialising in the metropolitan Melbourne market, be sure to contact the team at Besser + Co or come into one of offices, located at 153 Carlisle Street in Balaclava and L2/102 Toorak Road in South Yarra.
With decades of experience locally and internationally in both small and large agencies. Proudly serving in Australia since 2009. A trusted property management company by Australians