For first-time property investors, the thought of managing a rental property on their own can be thrilling. Many feel it’s not worthwhile handing over a chunk of the rental income to a real estate management firm.
It’s only when you’re faced with a barrage of calls or emails from renters, having to negotiate with tradespersons, following up on maintenance tasks and a whole host of other tasks that need to be organised, will you realise that it’s a lot more cost-effective to enlist the help of a real estate management firm to assist with the management of your rental property.
Full-Service Property Management Firm Services
The best property management companies provide a whole range of services. It all begins with advertising for new tenants and ensuring chosen tenants are of good stature and are likely to remain for the long term. This requires conducting background checks on prospective tenants, at a level which you may not be able to conduct on your own.
There’s also the task of ensuring rent is paid on time, day-to-day maintenance is carried out and appointing tradespersons to carry out minor or major repairs.
Real estate management companies also take care of the unpleasant duty of having hard conversations with tenants who default on payments and also evicting tenants who cause malicious damage, refuse to follow rules and are a nuisance to neighbours.
Easier to Scale
Property management is a vital function in all real estate. You may start out to manage your properties, but as your portfolio grows, it demands more of your time and you could begin to strongly dislike the task of managing your properties. The high volume of phone calls, coordinating with tradespersons and maintenance workers, taking time off work for property inspections and following up on rent can be exhausting.
Enlisting the help of real estate management companies, on the other hand, will ensure the tenants pay on time, maintenance tasks are carried out regularly, paperwork is in order and you never need to have unpleasant conversations in the rare instance a tenant needs to be evicted.
Property managers handle the maintenance, put tenants in properties, conduct background checks, collect the money and carry out some unpleasant tasks when it comes to evictions, paperwork, collecting late fees and others which you may never have anticipated.
As your property portfolio grows you may find yourself in a situation where you are required to attend court because of a dispute with a tenant. A reputable real estate management firm will have a better understanding of how to deal with such situations, through their previous experience and can save you a small fortune in legal fees.
Earning the Loyalty of a Real Estate Management Firm
While there’s no doubting the fact that a property manager creates a stress-free world for you, how do you get the property manager to give more attention to your portfolio when he has a lot more to manage?
In simple terms, it’s all about the numbers. For example, if you’re collecting $1000 of gross rent and are paying them $100 or 10% in fees, that may feel like a lot of money to you. However, $100 does not buy a lot of loyalty. On the other hand, if you acquire multiple properties and entrust the responsibility of managing them to a property manager, you actually end up purchasing a lot of loyalty.
In addition to gaining the loyalty of your real estate management firm, you will also be able to negotiate a better rate, as you add to your property portfolio.
While mediocre property managers perform basic duties such as ensuring rent is paid on time and maintenance, the best real estate management companies will help you maximise annual yield over time. They seek opportunities to increase rental income and carry out improvements to the property in a way that justifies paying higher rents.
Manage rental properties in the same way you would manage a business and look for tax benefits which can result from carrying out renovations to the property.
Ask what your property manager can do to increase the value of your property over time.
Employing Technology for Added Gains
You may be wondering how you can enlist the services of a single real estate management firm if your investment properties are spread across different Australian states. While this was a concern previously, online property management systems have now made it possible for just one property manager to manage multiple properties online.
Find out from your real estate management firm if they make use of such technology, or look for a company that does. Aside from an added level of transparency, it helps in reducing operational costs and facilitates better management of tradespersons when repairs or maintenance work needs to be carried out.
Investing in an experienced and reputed real estate management firm is an important step in ensuring you can generate a constant cash flow from your investment properties. As your portfolio grows it becomes even more important to entrust the responsibility of managing multiple properties, so you can enjoy a regular income stream and grow your wealth without the stress.