Property Management

Property investment can be daunting to both the experienced and inexperienced investor. It is not an everyday transaction and can therefore be fraught with uncertainty.

As a property investor, how do you overcome this and turn the transaction a seamless and enjoyable experience?

Landlords have three common goals when it comes to their property investment:

1. High return
2. Low vacancy rate
3. The best tenant

Can this be achieved with minimal stress and heartache? – Yes, it can.

The state of the current market plays a significant part in your investment’s ability to achieve your three property investment goals, because the marketplace will decide the rent you get and how quickly you get it. This is based on the sales theory of “supply and demand”

If there are large numbers of rental properties on the market and not many tenants, it is considered “a tenant’s market”, as they can pick and choose what they want. Under these conditions, tenants are likely to try and negotiate prices and terms, in order to get the best deal. Typically, lower rental prices and higher vacancy rates are seen in this type of market.

Conversely, if there are fewer rental properties on the market and more tenants, we see a change in market conditions to “an owner/landlord’s market”. Under these conditions, typically higher rental prices are achieved with less negotiation.

The other major contributing factor to you, the landlord, achieving your three-property investment goal is…

YOUR CHOICE OF PROPERTY MANAGER

The following are some questions with their answers that may be in your mind.




How quickly will you find me a tenant?

Unfortunately no one can guarantee an exact timeframe, however we have devised methods that will ensure that we can find you a tenant in the shortest possible time.

Maximum Exposure;

1. Your property will appear on multiple web sites as soon as it becomes available.
2 Where possible a to let sign will be placed on your property to catch passing traffic.
3. Our office at 712 Sandgate Road Clayfield is prominently situated with easy access for prospective tenants.
4. We have a Prospective tenant database; we will contact our active tenants if your property suits their wants and needs.
5. Accessible Property Managers means that all queries can be answered promptly and accurately.

How much will my property rent for?

As with the above question we can’t always quote an exact figure that your property will rent for, however we will provide a Market Comparison from which we can base a price range on. It is important to remember that the state of the market will also impact on the rent your property will achieve. Supply, demand, general property condition, location and the time of year will determine what your investments annual cash flow returns will be.

How will you find me a tenant?

We will find you a tenant by utilising several mediums and technologies. A Complimentary Marketing Program can be tailored to your needs on request.

We also recommend advertising in the Courier Mail classified section on Saturdays.

We will organise this for you at a reasonable cost upon your request.

How do you qualify tenants? What is the approval process?

Sometimes the first tenant is not the best tenant for your property. Tenants are selected on the basis that they meet the following criteria:

1. Ability to pay the rent
2. Ability to maintain the property

In order to verify that the tenant meets these criteria, the property manager will qualify the tenant using the following methods:

· Completion of a highly detailed application form.
· Verification of the information provided in the application including means of income, employment and previous tenancies.
· Carry out a search on Tenancy Information Centre Australia (TICA) or similar database

Once the property manager obtains this information, they will discuss it with you, if requested and together choose the right tenant.

Some factors that the property manager will consider are:

· Stability of employment – this will give you an indication of whether the tenant will be likely to stay for the nominated lease period and whether they will have the funds to pay for it.
· Good tenancy track record.
· Good credit history – ability to pay the rent.
· Property owner – ability to pay their mortgage.
· Avoid overcrowding – ask about the number of people who will be living in the property. Overcrowding can cause excessive wear and tear.
· Avoid pets (unless you agree) – even the most well behaved pets can cause damage.
· Proof of identity –a photocopy of a license or other photo identification will be taken.

When and how will I receive my money?

We have an advanced accounting package and if requested can pay out funds on a monthly or twice monthly basis. The timing of this is mid month and/or 3 days before the end of the month.

The money is paid by Electronic Funds Transfer or trust account cheque to your requirements.

If your rent money is going to be paid directly into your mortgage account, it is always a good idea to have your account paid several months in advance, just in case the tenant is late with their payments or the property becomes vacant for a short time. These circumstances can happen sometimes and it is best to plan ahead to avoid bank fees and/or penalties.

How do you collect the tenant’s rent?

Our tenants pay their rent through Rent Pay and they have the following options:

· Credit Card (with no charge to you)
· Direct debit from their own account
· Phone Payment
· Internet banking
· By cheque or money order to our office

All of these options make it quick and easy for tenants to pay rent and reduce the possibility of rental arrears.



What do you do if the tenant does not pay their rent on time?

Legally the property manager cannot take steps to evict the tenant for non-payment of rent until the tenant is 7 days in arrears. At this time a Notice to Remedy is immediately issued followed by a Notice to Leave if the tenant is still in arrears in 14 days.

During this time, the property manager would be speaking to the tenant by phone or visiting the tenant at the property to try and ascertain why they have not paid the rent and that information is then passed onto you.

If you feel that the tenant’s reason is genuine, you may ask the property manager to work out a payment plan that is suitable to you and the tenant so that the arrears are repaid in full to you. A payment plan may reduce further rent loss through a period of vacancy.

If the tenant does not comply within a further seven days, the property manager will apply to the Small Claims Tribunal to have the tenants evicted. The importance of acting immediately within the tenancy laws is because the process can generally take up to 6 weeks from the time the tenant stops paying their rent.

Can you guarantee that the tenant will pay the rent on time and not damage my property?

Unfortunately we cannot. When choosing the tenant at the commencement of the lease all relevant references may be satisfactory, however, circumstances can change such as relationship breakdowns, lost jobs, financial strain of children etc.

What we can do is regular inspections of the property. Three types of inspections are carried out by the property manager to minimise any problems that may arise with tenants that may do damage to the property.

The first is the Premises Condition Report. The property manager completes this report prior to the commencement of the tenancy.

This report:
· Is a legal requirement
· Constitutes Part of the Tenancy Agreement
· Determines the bond refund at the end of the tenancy
· Must be accurate (this is critical).

The tenant is given a copy to approve. Any discrepancies should be resolved at this time rather than at the end of the tenancy.

Another type of inspection is a Routine or Periodic Inspection.

Legislation permits:

At least one periodic inspection per year should be made but this can be increased depending on the way the tenant is looking after the property. Generally if the tenant is neglecting the property more regular inspections are recommended. If the tenant is taking good care of the property then a minimum of 2 inspections a year will be adequate.

The purpose of Routine Inspections is to see how the tenant is keeping the property, report any repairs or maintenance needed, review the rent and report back to the landlord on these items and offer solutions.

Common practice is to undertake routine inspections three months after a new tenant has moved in, then every six to twelve months. If you wish to be present, notify your property manager to contact you prior to arranging the inspection.

Finally, the Bond Inspection is carried out once the tenant has vacated the property. The Initial Condition Report is taken to the property and the current condition of the property is compared with this report. Allowances are made for reasonable wear and tear to the premises.

If the tenant has damaged the property, e.g. there is a red wine stain on the carpet; you can charge the tenant a reasonable amount for compensation. Take into consideration depreciation and the size of the stain (unfortunately, you can’t claim replacement carpet).

If the tenant disputes this amount, the property manager can claim it from the tenant’s bond. If the tenant again disputes the claim, the property manager will need to meet the tenant at the Small Claims Tenancies Tribunal to have the matter heard and decided before a Tribunal Member.

How are repairs and maintenance handled?

We request that you allow us an expenditure limit, so that we may action small repairs without disturbing you each time and reducing the time taken to have repairs done.

All major repairs will be discussed with you first. Quotes will be obtained first to ensure the correct work is being carried out, by the best tradesperson, at the best price.

Not every repair must be attended to by the landlord; however urgent repairs outlined in the Residential Tenancy Agreement, such as burst sewers or hot water services, must be acted upon regardless of the whether the property manager has been able to reach you.

We use only licensed, registered tradesmen. A list can be provided upon request.

How often will I hear from you? And how?

It is up to you to nominate to us how often we contact you.

Would you prefer to hear from your property manager every time something occurs with the tenancy or would you prefer us to handle situations as they arise with your best interests in mind?

Please advise us of your preferred method of communication – whether it be email, your private phone, mobile phone or mail.

If requested we will call regarding any change in the circumstances of your investment.

Will I lose control of my property if I give it to you to manage?

Absolutely not, just tell us how involved you would like to be in the management of your property.

Some owners prefer the property manager to handle everything and the most involvement they want is to receive their rent and statement each month. Other landlords like more involvement in the day-to-day management, such as organising repairs and attending property inspections.

What documents do I need to sign and why?

· PAMD Form 20a Appointment of Agent – Letting and Property Management. This agreement is you authorizing the property manager to act on your behalf in all matters that are noted in relation to the management of your property. The property manager cannot legally act on your behalf without your signature on this document (not even advertise your property for lease).

What are my obligations to the tenant and your agency?

Under the Residential Tenancies Act, landlords have various obligations to their tenants. They include ensuring:
· The premises and inclusions are clean
· The premises are fit for the tenant to live in
· The premises and inclusions are in good repair
· The lessor is not in breach of the law dealing with issues about health or safety of a person using or entering the premises
· The tenants have a sufficient number of all keys to the property

Do I require insurance on the property?

It is highly recommended that you protect your rental income along with property and contents insurance, public liability insurance and if it is a strata unit, strata insurance. Unfortunately we are not allowed to arrange Landlord income protection insurance. We can advise you of the names of companies who provide this insurance.

It is the tenant’s responsibility to have their personal belongings insured.

Preparing Your Property For Rent

A first impression can often be the last impression so it is important it is a good one. We strongly believe that it is in your best interest to ensure that your property is presented in the best condition possible.

There is no doubt that when a property is in first class condition it rents more easily.

Following are some suggestions that may make the leasing process more efficient:

· Fresh decoration in light neutral colors is popular amongst tenants and also makes the property feel clean and tidy.
· Polished wooden floors are also sought after, otherwise carpet of the same colour throughout, preferably stain resistant.
· Good quality curtains or blinds are very important.
· Ample cupboard/storage space in the kitchen and bedrooms.
· Modern bathroom with good water pressure and a quality hot water system is often very high on tenants list of priorities.
· Air-conditioning is certainly desirable but not in everyone’s price range. Ceiling fans are a good, cost effective alternative and still deliver a satisfactory result.
· If renting the property with appliances it is a good idea to make photocopies of instruction manuals of all appliances to leave at the property for easy reference and can also save you many call out fees from trades people. The disadvantage with appliances is if they break down you have to either repair or replace them.

The Professionals real estate agencies at Clayfield and Ascot continue to grow by personal referrals from our clients. We feel confident that you will be impressed by the way we do business, deal with our clients and our desire to provide every possible service to both Landlord and Tenant.

We are confident in our ability and enthusiasm to manage your investment and ensure that returns are maximized from your investment. In fact we are so confident if we fail to deliver then we guarantee to do the following.