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Why property managers are best to manage your rental

By Emma Smith

Managing a rental property appears simple enough – collect rent, arrange repairs and troubleshoot problems – but the reality is often more complicated.

That’s why most Australian landlords use a professional property manager.

Emily Sim, the head of property management at Ray White, and Joanne Pearson, a new client consultant from McGrath in St Kilda, explain why investors should pay a property manager to handle their property, rather than “DIY”.

A good property manager is vital to a profitable portfolio.

The risks of not having a property manager

“Unless a property investor has a comprehensive understanding of the Residential Tenancies Act, they are placing themselves at a dangerous disadvantage by managing a tenancy,” Sim says.

With legislation always evolving, outsourcing to a property manager who is across any changes or complexities can provide ease of mind for investors.

“Once possession of a property is handed to a tenant, it’s only a detailed and working knowledge of the tenancy legislation that will protect them from control for possession, the condition of property and funds management.

“Sure, an investor can collect rent, but do they know the terms and associated timeframes for access to a property, possession of a property and return on investment? It’s worth the 8%  tax-deductible management fee in my opinion,” Sim says.

What does a property manager do?

Typically, property managers charge a percentage of the rent as a fee for complete property management and a separate fee for leasing the property.

Services included in these fees include advertising the rental property, vetting applicants, collecting rent and bond deposits, and ongoing maintenance. Property managers also look after any tricky situations such as disputes and issuing breach notices.

It’s a no-brainer that landlords need good tenants who will pay on time, every time, and look after the investors’ property, Pearson says.

“Let’s face it, in Melbourne most properties aren’t worth less than half a million dollars, so landlords expect whoever is going to move into their property won’t just look after it, but maybe even enhance it,” she says.

Building better relationships between landlord and tenant

Using a professional who knows exactly what to look for in tenants is vital.

Recently, have launched enhancements to 1form, the online application tool used by most tenants, in order for property managers to capture essential information about tenants. These changes, which include a new tenant bio section and the question ‘tell us why you’re suited to the property’, will give more depth into prospective tenants’ characteristics.

“If the tenant is good and wants to stay for a long time, there’s less risk of vacancy for the landlord. This can result in advertising fees to re-lease the property and leasing fees,” Pearson says.

“But, even if they do vacate, if there’s a good relationship between everyone, they co-operate and can let us do inspections before they’ve moved out, to make the transition to the next tenants easier,” she says.

Ultimately, that relationship comes down to the experience and expertise of the property manager and impacts the bottom line.

Pearson says with the Victorian Government proposing a range of reforms to tenancy laws, including making it easier for tenants to have pets, the 1form system used by tenants will is more valuable than ever.

Since early April, 1form has also been updated to allow tenants to provide details of any pets they have including their name, photo, breed and description.

“Landlords will appreciate the additional features, because it’s a more thorough form and it cuts to the chase of the information we really need,” Pearson says.

What’s more, tenants also tend to prefer dealing with property managers, who tend to be more contactable and better equipped to deal with any unexpected repairs or issues.

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