8 Ways Property Managers Help Add Value To Investments
As a property investor, you’ll know, that finding the right property, in the right location with the right potential is only half the battle to achieving your investment goals. The next piece of the puzzle is ensuring your property reaches and retains high quality tenants, tenants that will pay their rent on time and look after the property so you can go on and achieve your investment goals.
Of course, you can manage your property yourself, but are you aware of the following 8 key ways property managers can help investors add value to their investment and stay on track to achieve their goals.
1. Setting the right market rent
As an investor you are most probably keeping an eye on the local rental market and are aware of what similar properties are renting for. This is important to give you a ballpark figure. However, every property is different and has different renter appeal. Knowing the subtle differences and how to leverage them is where a property manager fits in.
They are skilled at assessing individual properties, its features and location and reviewing comparable rental properties to determine a market competitive rent. They are also aware of what local renters want and importantly what they are prepared to pay more for. Having these insights is gold for an investor.
They are able to use this information to determine appropriate property improvements that will appeal to higher quality tenants. In addition, it may also mean they are able to charge higher rent and therefore improve their rental yield. To find out more about adding value to your investment, download our property investor guide including a chapter on 10 ways to add value to your investment.
Keep in mind that local property markets can shift significantly over a 12-month period and having an annual rental appraisal conducted by a skilled property manager is an important step to long term investment success.
2. Retain good tenants by addressing day-to-day demands & maintenance issues
If you ask any self-managing landlord, you’ll find that one of the main drawbacks is the time they spend addressing the day to day issues raised by their tenants. Over the years we have had many disgruntled tenants come to us after they have left a rental that was being managed directly by the landlord, because they had a small maintenance issue that they had asked the landlord to fix multiple times, but it didn’t happen. As a result, the landlord had a four-week vacancy simply because they didn’t spend the $50 promptly to get the issue fixed.
Nothing will zap your profits faster than vacancies, so having someone managing tenant concerns and addressing maintenance issues on your behalf in a timely manner, can help ensure tenants are happy and vacancies are limited. Plus, property managers have a team of maintenance specialists who can be mobilised quickly and economically into action, to fix any maintenance issues.
3. Skilled at reaching the greatest number of potential tenants
When you are looking to rent your property out, knowing how to reach and appeal to the maximum number of relevant renters is important to finding the best tenant for your property.
Property Managers know the local market, they know how best to position and promote a property to drive maximum interest. The more people who want to rent your property the better as it gives you greater opportunity to find the ideal tenant. Plus, they undoubtedly have a database of potential renters looking for a place just like yours to call home, so you may be able to rent your property faster.
4. Skilled at screening tenants to find the right one
Good tenants can actually mean the difference between a high and low-performing investment. In fact, finding a great tenant may be just as important as finding the perfect location for your investment property. Why? Because they treat your property well. They pay the rent on time which ensures your cash flow is consistent. If you are good to them, they are often more likely to sign up for a longer-term lease, therefore reducing your turn around costs and the potential of no rental income coming over the changeover period.
On the flip side, troublesome renters can cause big issues for property investors, they can put your rental income, your neighbourhood and your property at risk. Tenant horror stories are everywhere, however many of them could have been avoided if the tenant had been thoroughly screened.
Property manager are skilled at screening tenants, those who will stay for the long term and cause few, if any problems. Not many investors have this skill, and it’s usually acquired only after some bitter experiences.
A property manager will review the following when assessing the potential of a candidate:
- Credit history
- Proof of ID and Income
- Thorough reference checking
- National Tenancy Database review
- Abide by anti-discrimination laws
To find out more about what our Property Managers look for when background checking potential renters, download our Maximising your Property’s Potential guide.
5. Help ensure you have accurate financial records for your accountant
As an investor you have the ability to claim a number of investment property related expenses come tax time. However, to ensure you are maximising the tax effectiveness of your property, you need to ensure your financial records are in order.
Property managers can be a huge help here and can provide you a fully itemised statement each month, along with a comprehensive rental statement at the conclusion of each financial year for you to give to your accountant. These reports will outline:
- Accounting records and services on all properties under management
- Accurate documentation on all incoming and outgoing monies
- Provide appropriate tax documentation for end of financial year
- Assist in organising depreciation schedules
To understand the two primary ways to structure a property investment read our manage page.
6. Conduct regular inspections to ensure your property is being looked after
Ensuring your property is well looked after and that you won’t have to pay a lot of money to fix damage caused by the tenants, is a key priority for property managers.
A high performing property manager will conduct regular inspections of your property to ensure the investment is being cared for and nothing untoward is happening on the premises. These inspections also ensure landlords are able to actively monitor and address any maintenance or health and safety issues.
7. Managing the rent, including setting, adjusting and collecting
If you have ever worked in a small business or in a department responsible for getting people to pay bills, you’ll know how tricky it can be sometimes to collect money owed. And as a landlord with an investment loan, if you are not paid on time each month it can directly impact your loan repayments and the viability of the investment.
Property managers with their tried and tested systems are highly efficient at working to ensure rent is collected on time. They also have strong rental arrears procedures that they are skilled at implementing should a tenant fall behind. Having an independent property manager look after this can help save landlords a lot of stress and a lot of time.
8. Knowing specific local landlord-tenant laws
Landlords have a legal obligation to comply with the regulations set out in their relevant Landlord-Tenant Law. This documents interactions, rights and obligations of both landlords and tenants. In addition, landlords are obliged to comply with local state and regional legislations and not doing so can have serious implications for the property owner.
If self-managing a property, the landlord is obliged to be aware of and comply with these specific laws to ensure the safety of themselves and the tenant/s. If at any point the laws change, which they do frequently, landlords need to aware of these.
Property managers stay up to date with the changes and can help keep their landlords informed.
A final note
In most cases property management fees are tax deductible. So, in reality landlords are able to access all of the benefits offered by property managers and then offset their costs against their tax. Of course, talk to your accountant about your property and specific tax situation.
To find your local McGrath Property Manager and understand how they can help you add value to your investment and keep you on track to achieve your investment goals, click here.