Landlord Tips - RE/MAX Metro

Agency or manage yourself?

Owning an investment property is a financial advantage, yet a large responsibility and challenging as well. For this reason, it is important to conduct a thorough analysis as to whether you should utilise the services of a professional agency or manage your investment property yourself.

Even those 'nice' tenants invariably have demands, and attending to these requests, queries, and maintenance can be frustrating, stressful, and time-consuming.

One way to eliminate these problems is to make use of a property manager from a reputable agency.

What is a property manager?

A property manager is a third party that acts as an intermediary between you and your tenants. Depending on the extent of the contract you sign with the agent, they can be responsible for:

Finding new tenants when the property is unoccupied.
Assessing prospective tenants’ suitability and performing checks (e.g. obtaining references).
Collecting regular rental payments from tenants.
Carrying out property inspections and maintaining a condition report.
Dealing with and looking after tenants – answering queries, booking tradespeople for repairs, and generally acting as a go-between for landlords and tenants.

Advantages:

A property manager will save you a lot of time and effort involved in managing your property.
They can access a pool of potential tenants and find qualified tenants faster. They can also access the financial and rental histories of tenants with efficiency.
They have extensive knowledge of the local area which gives them more negotiation power for higher weekly rent.
Through their experience, they can offer advice on whom to contact in the event of maintenance problems in relation to trust, efficiency and cost.
They aren’t emotionally attached to the property and can make more balanced decisions.

In summary, as a landlord, if you have the time, patience, experience to deal with difficult tenants and understanding of the legal matters you can save the fee you pay for a property manager.

However, the vast majority of landlords across Australia use professional services for a reason.

For a relatively small management fee, a reputable agent takes all the stress and hard work on their shoulders, which definitely makes it worthwhile for landlords.

Maximise your rental return

Generally, an investment property is a positive contributor towards your income, however, this is not the case for all owners across the board. There are multiple reasons for this and thus as trusted advisers for our clients, below are some strategies and actions to consider:

Do not have a 'penny-pinching" mentality

By not spending any money on your investment property and still receiving a rental income, it might look advantageous, however, this is usually counter-intuitive. Although it is important to not waste resources on anything unnecessary, spending money and time efficiently will increase your 'savings' significantly more due to the extra rental income.

Examples of these are; repairing cracks & holes, replace old lightbulbs & handles, a fresh coat of paint, update of small fixtures throughout the property, landscaping, replace old and worn flooring, etc. While the larger CORRECT renovations can bring in even more rental returns.

Properties that look and feel inviting to live in will bring in a higher rental income and be filled faster.

Choose a reputable agency to manage your property

The quality of agencies in your local area can differ substantially. Mentioned in the segment above 'Agency or manage yourself?', the duties of an efficient and hard-working property manager have been detailed. However, there are other factors to consider as well when choosing an agency to manage your investment property.

These include:

Accessibility -Will you struggle to get hold of your property manager, especially when something goes wrong. We eagerly keep regular communication.
Respect – One of the fundamental values of our team.
Friendly - This might not seem that important at first, however, a friendly agency like Remax Metro go a long way, especially over the course of an extended period.
Pool of agency properties - With us you are not simply just 'another' number or landlord. With us, you receive individual care and direct involvement from the Directors.

Deciding on weekly rent

There is a tendency amongst many landlords to set a weekly rental value based on their own personal deductible costs regarding their investment property like a mortgage and repairs. Although this might seem like the 'economical' way to make sure your investment keeps a positive cash flow, this approach can in some situations actually lower the possible NET income.

By basing the weekly rent on your own situation, it will quite often be out of touch with the reality of the property market. If you pitch your property too high you have a vacant property that you struggle to fill and therefore actually lose more than what you gain.

If you need some advice or help, simply contact me to discuss how to achieve the maximum net profit for your investment property. It will be a pleasure to assist you in this regard free of charge.

Tenant Selection Tips

When deciding on good tenants there are multiple factors we consider as an agency before recommending a suitable tenant to our landlord.

The following list are examples of warning signs that we investigate after potential tenants apply to rent the properties managed by Remax Metro. This demonstrates the care and detail we provide in looking after our clients:

Low income to rent ratio- If the applicant’s income shows a poor ratio, we know they are likely to struggle to pay the rent, no matter how keen they are on the property. That ratio limit is generally viewed as rent being no more than 30% of a potential tenant’s monthly income. If the ratio is above 30%, the tenant will risk not being able to afford their monthly rent.
Employment history that is not continuous- The employment landscape has become increasingly fluid in recent years. If the applicant has a history of no more than three months in each job (and particularly if there are gaps in between) it pays to be cautious. We verifiy the tenant has a stable income so they can continue to pay their rent throughout the duration of the lease.
References are from family or friends- Family and friends will usually provide a good reference for the applicant, however, we want an honest opinion that gives us all the good, bad and ugly. So, if the applicant lists only family or friends as references, we ask them to provide professional references, with phone numbers that are verified as belonging to a business.
Asking to pay the bond after they move in- The bond for the property is largely viewed as providing the landlord with security if the tenant causes damage to the property. It is also a very useful indicator in filtering out inappropriate applicants. If someone can’t afford to pay their bond, it’s very likely they can’t afford to pay their rent.
Income can’t be proved- An income check is one of the easiest ways to verify if a tenant can afford their rent. A proper check will prove that the potential tenant earns the yearly income they have claimed to earn on their application.

In addition, here are some added checks that Britton Real Estate applies to make sure your tenant will look after your investment property and pay rent on time:

Tenancy Database check
ID check
Rental ledger check
Previous Landlord/Property Manager check

How to switch your investment to Remax Metro

As a landlord, you might be considering moving your investment property or portfolio over to a reputable agency that actually delivers 5-star service for a very competitive fee. We make this process easy and seamless by taking care of the cost and paperwork.

All we need from you to bring your property over to Remax Metro, immediately, is your authority as the landlord.

If you are interested in the details of how we execute this process, simply get in contact with us. From there we can answer every question you might have. Yet for the curious, below are the steps of the process after you have decided to move your investment property to Remax Metro:

We meet with you at a convenient time and date, to discuss your needs and preferences as well as agree on fees.
You sign an agency agreement with Remax Metro, that we will pre-fill for your convenience according to the privately discussed costs you have agreed upon.
You sign our pre-filled (1 Page) authority that will terminate your current services with your current property manager and their agency. We will send forward this termination notice on your behalf.
There will be a termination notice period with your current agency as is part of most management agreements. However, as we take care of this, normally you will be able to start your services with us immediately.
Remax Metro will liaise with your current management agency to acquire the spare keys and rental ledger for your property.
Remax Metro will inform your current tenant in your property (if applicable) that we will now be the managing agency through written communication and a friendly call.

From this point forward you simply enjoy our dedicated and exceptional service whilst being cost-effective.

...and as the age-old proverb says: 'The rest is history'