Whether your investment portfolio consists of one property or ten, the question remains – do you manage the property yourself, or entrust it to an industry professional?
Even if you only have one investment property and it seems tempting to reduce costs by operating as a private landlord, there is still a maze filled with issues to navigate, particularly for a first-time investor.
If your portfolio is large enough that a majority of your income is derived from it, you may view yourself as a professional landlord. However, unless you have the time to devote to all aspects of property management, you could find yourself struggling to keep on top of things.
Danielle Gavin, Senior Property Manager at Peter Blackshaw Manuka has 15 years of experience in the industry. She has plenty of information to pass on about what exactly is required of a property manager that holds true whether you intend to operate as a private landlord or engage a professional. This will help you to weigh up both scenarios to help you make the most of your investment.
Property management can be broken down into three broad categories: Marketing, Management and Maintenance.
MARKETING
- Advertising: presentation, photography, press and online listings
- Exhibitions: opening the property for prospective tenants to view
MANAGEMENT
- Applications and approvals: managing the process of conducting reference and background checks
- Tenancy agreements: ensuring that both tenant and landlord are aware of their legal obligations
- Arrears management: monitoring any arrears – and following up with the appropriate legislative steps to prevent financial loss
MAINTENANCE
- Property repairs: liaising between tenant, landlord and tradespeople
- Rent reviews and inspections: conducting regular audits
- Reporting: ensuring all documentation for income and expenditure is up to date for taxation purposes
While these are all areas that private landlords can handle for themselves on a basic level, there are some pitfalls or pain points that a professional property manager knows how to avoid or navigate. This is where their experience and knowledge really becomes of value. Professional property managers offer several benefits, outlined below.
Training
Did you know that property managers are also qualified Real Estate Agents and required to be registered by the Office of Regulatory Services or NSW Fair Trading? In the ACT and NSW agents undergo core skills testing every year to ensure that they’re completely up to date on changes to legislation. This Core Professional Development testing has a 12-point system to pass. Without completing this annually, agents are not eligible to re-register their licence to practice.
Knowledge
Let’s be honest, you can probably do most things yourself in life but that doesn’t mean it’s always a good idea. A professional property manager is just that – a professional. They do this for a living, and that gives them valuable insights that the rest of us just don’t have.
You can do your own research, but Danielle cautions that it is vital that your knowledge of the rental market allows for you to be able to interpret its current conditions. A property manager, on the other hand, operates in this space daily, meaning they are up-to-date with market trends and patterns at all times. This can benefit you when it comes to things like rent negotiation or navigating a slow market. It’s your property manager’s job to go the extra mile to ensure your property is well cared for.
Technology
The increasing use of technology over the past decade has been of great value to property managers and landlords. Danielle noted, “Routine tenant inspections used to be handwritten on a piece of carbon paper – with duplicates given to the tenant and landlord. Now we use iPads, not only making the process more efficient, but we can also take digital images to ensure that the client is presented with the property in the most accurate condition.”
Handling Tenant Issues
Private landlords have to handle any and all issues with their tenants by themselves. On the other hand, having a professional property manager means you’ve got someone there to deal with issues such as mediation in the event of late rental payments, collecting debts and facilitating repairs and maintenance.
Property managers can also offer landlords invaluable professional advice. This amounts to the landlord having a lot less to worry about.
Conflict Handling
Danielle states that it is the role of a property manager to be able to identify an issue, work out a solution and then move towards providing a resolution. “Conflict is really challenging,” she says. Although every property manager’s preference is to negotiate an agreement for their client that doesn’t end up at the Tribunal, sometimes it’s unavoidable. Most of the time, these cases relate to disputes over bond, which are fairly simple to resolve, but more complicated matters do come up from time to time.
Danielle says that attending the Tribunal is the area in which her expertise can be challenged the most, but also where she gains a lot of education. “I actually enjoy going to the Tribunal – it can be a positive experience as I always learn something from attending a hearing.”
Ultimately, working with a property manager means your journey as a landlord will be easier. You’ll feel supported and know you’ve got someone on hand who knows the industry and can help you manage any issues that arise. And this, we believe, you will find invaluable.