Property manager questions

Hi KDT,

The following is an extract from the website http://www.propertydivas.com.au

“…There is considerably more to Property management than just collecting rent – ask any property manager! Good property management plays an important role in ensuring your property receives maximum returns and remains in tip-top condition.

The types of management options available can be broadly classified in two categories:
1. Appoint a professional Property Manager; OR
2. Manage yourself – “DIY” Landlord.

Role of a Property Manager
An efficient property manager is well worth the relatively small fees charged. Responsibilities of a manager can include:

• Appraise the property for rental and assess the market rental amount
• Interview, screen and select suitable tenants
• Prepare initial condition report, lease documentation and bond authority and collect initial payment
• Receive rent and chase late payers
• Conduct periodic inspections
• Report damage or maintenance issues to landlord and arrange for rectification where appropriate
• Handle all tenant communications
• Co-ordinate the moving out of tenants at termination of lease
• Appear before Tribunal in cases of rent default or other serious issues.

Having a professional property manager on your “team” will help ensure maximum return on your investment property and remove the frustrations often associated with dealing directly with tenants, as well as saving you considerable time and hassle.

What should I Look for in a Property Manager ?
Although property mangers are usually part of a real estate office, they should ideally be a separate department from the general Sales area. To reduce the risk of problems arising, you should ensure the office has efficient business systems and procedures in place to deal with daily issues that may arise such as emergency repair requirements and late rent payments.

Your property security is important so insist that the property manager conducts personal inspections, rather than just hands out keys to strangers who walk in off the street. This opportunity will allow the property manager additional time to assess the character of the applicant and ask questions.

Take the time to interview several property managers to ensure you feel confident about their role. Ask your potential property manager questions, such as:

Suitability:
• How long have you been a property manager?
• What qualifications and ongoing training do you have?
• Do you have a good up-to-date understanding of State legislation and important caselaw?
• What property investment background do you have?

Financials:
• How would you assess the market rent on our property?
• How would you maximise the return on our property?
• What initial letting fees and commissions do you charge?
• What ongoing letting fees and commissions do you charge?
• Do you charge re-letting fees if a tenant re-signs at the end of a lease or leaves early?
• Do you charge for attendance at Tribunal and associated administrative work?
• Do you charge any “hidden fees” such as for fortnightly/monthly statements or administrative tasks?

Procedures:
• How will you advertise and market my property and what costs are involved?
• How do you document conditions reports and do you take photos?
• How do you screen prospective tenants and what references and other checks do you make?
• How much bond do you collect and how do you carry out the administration for this?
• How often is rent collected and paid?
• What procedures do you follow if rent is unpaid?
• How often are inspections made and what procedure do you carry out?

Finding the right Tenant
Applicants should be required to complete a standard form detailing personal information including current and previous addresses and whether they are rental properties. Photo ID and proof of income should be shown and employee and character references should also be provided. All information should be carefully checked and verified by the property manager and a check of the National Tenant Database should be carried out. Based on all the details collected a comprehensive assessment should be made of each applicant.
The property manager should then discuss all applications with the landlord and recommend the best choice. Once a suitable tenant has been found, a tenancy agreement will then be prepared along with a condition report, lease and bond form, all of which require signature by the tenant. The condition report should be backed by photographic evidence of the condition of the property (both inside and out), which may be used as proof in the event of a dispute regarding the state of the property at a later stage.
When a tenant vacates the property, the property manager should provide the tenant with a detailed checklist of items requiring cleaning and attention before leaving and should reinforce that, subject to normal wear and tear, the property must be left in the same state it was in when the tenant initially took occupation of the property. You as the owner should also be offered the opportunity to inspect the property before the bond is refunded.

“DIY” Landlord
Many property investors choose to manage their own investment properties. While you may save on fees, it can be frustrating dealing with and selecting suitable tenants and the paperwork can prove to be an administrative and legal minefield.

Nevertheless, may investors do successfully and happily manage their own properties and they are happy to carry the burden of doing so and put in the extra time required in return for saving on the rental fees and having greater peace of mind regarding knowing what’s going on regarding the property in general.

DIY landlords must be aware of their legal requirements and must also ensure that personal contact is kept to a minimum and that sensitive issue such as raising rent are discussed without incident.

To access the DIY Landlord checklists, pro-forma letters and templates go to http://www.propertydivas.com.au

Lease Renewal (Word Document)
Lease Renewal (PDF)
Rent Arrears (Word Document)
Rent Arrears (Pdf)
Entry Notice (Word Document)
Entry Notice (PDF)
Rental Ledger (Excel Spreadsheet)
Property Rental Application (PDF)
Landlords Property Rental Assessment (PDF)
Annual Rental Inspection Checklist (PDF)

Amanda
“It is better to be inconspicuously wealthy, than to be ostentatiously poor…”

They will need to leave a forwarding address with the agent for the statements etc. The agent is probably the best person to handle all of it – they can also be responsible for any rates, water, insurance etc that needs to be paid while they are away. It can all be deducted from the rent.
Make sure they get Landlord’s Insurance as well. A lot of household policies provide this now, or they can contact AAMI, St. George Bank, NRMA to name a few.
They will also need to leave an email address or contact phone number/s in case the agent needs to reach them regarding repairs or problems.
On that note, leave a $100 threshold with the agent for repairs to be done. This means that the agent can get any repair done up to that figure, but over that they have to contact the owner to get approval, unless they are happy to trust the agent to take care of all the repairs as they see fit. It depends on how much control you wish to keep I suppose.
Don’t forget to tell them that all their outgoings on the property for that period they are renting the property are tax deductible, so keep all receipts for the accountant.

Cheers,
Marc.
[email protected]