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Property Management: Get the facts before you sign

Wednesday, August 28, 2019

Investment gurus are very quick to point out the numerous advantages of investing in residential real estate. In their analysis, they will show you the purchase and sale side of the argument, and usually fail to identify or are just not aware of potential problems that can happen in the many years of your “hold” strategy.

While the buy and sell stages of the investment are done in a matter of months, your holding period will have the most impact in the short- and long-term performance of your investment.

The performance of your investment is based on two fundamentals: income and expenses. Income in the form of rent achieved or lost due to vacant periods and expenses in keeping the property and improving its value.

The performance of your property manager in those two fundamentals will basically dictate the outcome of your strategy. There must be a better way of finding a good property manager in a sea of websites promising excellent service without much proof, making a choice on fees alone or on the number of starts they have on Google.

The best way is to interview your prospective manager as you are interviewed for a new job. Your new employer would like to know, basically, if you can do the job well. You should ask your prospective manager questions to try to find out if they can do their job well and weigh that against their fees.

Below we share some questions you can ask your prospective manager to try to find out if they are as good as they say they are.

What range of services do you offer?

Make sure that you find a property management company that can offer a variety of real estate services to provide you with a complete property experience. 

Adelaide Residential Rentals is a full-service Property Management Company. In the initial stages of lease, we conduct and oversee open house inspections, collect application, screen potential clients, prepare all the lease documentation under your instructions and prepare a comprehensive handover package for clients with complete instructions for appliances, how to pay the rent and how to contact us in emergencies among other instructions.

During the tenancy, property managers who manage a portfolio of rental properties look after each property’s maintenance, routine inspections and repairs, while constantly liaising with tenants and owners.

We have a pro-active approach to vacancies, seeking instructions from tenants if they plan to stay or vacate well before the tenancy is up to avoid any vacancy periods for our Landlords. Once the tenant vacates, we conduct a thorough outgoing inspection and manage any repairs needed before releasing any bond money.

What services are or aren’t included in the management fees?

At Adelaide Residential Rentals, all the services above and more are included in the management fee. 

Be aware that some agencies will give you a much lower management fee, but the list of exclusions is endless. They can charge you for routines, ingoings and outgoings and for representation in the Tenancies Tribunal.

This is where you need to weigh up the pros and cons of a lower fee against the peace of mind of no surprise charges when you least expect them.

How do you determine rent amount?

A property manager should be able to complete a comparable market analysis to determine the highest possible rent achievable and have a report ready for you.

This report should consider individual features of your property such as size and amenities and they should have the local knowledge of the market to foresee changing conditions and adjust the rent accordingly.

Rent reviews do not need to happen only when there is a change in tenancies. Adelaide Residential Rentals provided regular rent reviews to ensure our properties are always performing at their best rent potential. 

How do you select prospective tenants?

Property managers have authority to obtain private information such as employment details and history, proof of income, past rental history, personal referees, details on any past breeches and also 100 points of identification are required to support the application. 

Adelaide Residential Rentals also check a National Tenancy Database for past breaches, old debts and damage to property. We call employers and previous property managers to check references before making a recommendation to our clients for their final approval.

How often do you conduct inspections and what process follows?

We conduct our first inspection 6 weeks after the tenant moves in to check if the moving has gone well and if they are settled in.

After that, we conduct thorough routine inspections every 17 weeks. Our clients are advised up front of the dates so they can be present if they wish.

A complete report with photos and recommended maintenance is issued to the owner after each inspection.

 

How many Tenancy Tribunal hearings have you had in recent years?

This is a great question to assess the experience of your prospective manager as it can give you an insight into the property manager’s experience at handling tenancy disputes and client resolution. 

Unfortunately, Tribunal attendances sometimes are unavoidable, and you want to know that your case will be in good hands, handled by a manager that can provide all the supporting documentation and evidence needed to support your case. 

There is a charge from the Tribunal to the owner, but Adelaide Residential Rentals does not charge clients for representation. 

 What systems and procedures you have in place to manage your portfolio?

Technology in the Real Estate Industry has evolved in leaps and bounds. Adelaide Residential Rentals uses the latest cloud technology to manage its properties, where each manager has access to all the property’s and tenant’s history at their fingertips.

Communication within the system is encrypted and recorded, creating a complete record of conversations between tenants and owners, that can be accessed at any time by our managers.

Tenants have access to their own portal, where they are notified of upcoming inspections, receive rent and other invoices, can request maintenance and check their rent status at any time.

Owners also have access to their own portal 24/7, where they can see rent status, vacancies in their portfolio, download ledgers and statements instantly and check the status of any open maintenance happening to their property.


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