What Is Property Management?
Property management is the process of managing all aspects of a property on behalf of the property owner. Property management can be carried out by the owner themselves or a property management company.
Tasks include finding tenants for the property, attending to maintenance issues and collecting the rental payments.
When outsourcing property management, landlords can either go through a property management company or a real estate agent. Real estate agents usually have a dedicated team providing property management services.
Many landlords decide to choose property management services provided by the property agent with whom they have had previous transactions. For example, an investor may purchase a property through a property agent and then ask them to manage the property for them.
Benefits of Property Management for a Landlord
Why would a landlord decide to choose to invest in property management rather than doing it themselves?
1. Distance From the Property
They may not be in close proximity to the property, whereas the property manager is and can be available to visit the property as required.
When you purchase an investment property it’s not always close to home: you need to look at factors that will make it a profitable purchase. Take a look at our article on principles of residential property investment for more information on what makes a good investment property.
As we sell property outside of NSW we work with property managers in different states to ensure our clients properties are in good hands.
2. Legal Knowledge
The landlord may not be up to date on tenants rights and the laws surrounding renting out a property. Whereas the property manager would be well versed in this area and has the knowledge to take the relevant steps to resolve any issues.
3. Peace of Mind
The property management team do property management day in and day out. Therefore they are efficient at communicating with tenants, fixing issues and making sure rent is paid on time. This means that the landlord can relax knowing that their property is in good hands.
4. Time
As a landlord you may not have the time to advertise the property, conduct open homes and screen tenant applications. Property management doesn’t stop there, with rent collection, attending to maintenance issues and carrying out inspections. These activities all take time that you may not have!
5. Avoiding Conflict
The property management team will handle any issues with the tenants not looking after the property or not paying rent on time. Property Managers are experienced with handling troublesome tenants and have processes to deal with the situation as smoothly and efficiently as possible. This is one less thing for the landlord to have to worry about, again these issues can be time consuming which may be a problem for a time poor landlord.
6. Market Knowledge
Property Managers know their market and how much rent can be reasonably charged for a property. Setting a realistic current market rate can equate to properties being rented out sooner, which in turn saves the landlord money. A vacant property is costly for the landlord and can far outweigh the cost of hiring a professional to manage their property for them.
7. Property Ownership Knowledge
Property management professionals are usually experienced with property and may own investment properties themselves. This means they can provide invaluable advice and draw upon their own experience to help landlords. For example, our Property Manager always advises our landlords to take out landlord insurance. Drawing from her own experience, she has seen that this can be very beneficial as you never know when you may need it.
Property Management Activities
Property Management includes various activities: from carrying out reference checks to handling disputes and maintenance issues. Landlords choose property managers for their experience and to take the stress away from owning an investment property.
Here are some of the activities often performed by property managers:
- Advertising property
- Setting a rental price
- Ensuring the property is ready to be rented
- Open homes – giving potential tenants the change to view the property and answering any questions they may have
- Screening tenants
- Reference checks
- Contracts and condition report at the beginning of the lease
- Regular inspections and condition reports throughout the lease
- Handling maintenance requests and out of hours emergency calls
- Finance – security deposits, paying bills, ensuring the rent is coming in on time
- Dealing with late payment of rent or other tenant problems
- Adjusting rent
- Responding to requests or queries from tenants eg: request to have pets
- End of lease – ensuring property is cleaned and left in its previous state, keys are handed in and paperwork signed.
In summary, property management is all about looking after your property and making sure that the property is rented out and well-maintained.
It all depends on whether the landlord has the time and willingness to get up to speed with the market to take on property management responsibilities. Many landlords choose a property management company for their expert knowledge and to save them time and money.
If you need help managing property in the Sydney area – please give us a call on 02 9439 3188. Our experienced, friendly staff are here to assist you with your property needs.
