Choosing a property manager for your first investment property?

Entering the world of real estate investment can be both exciting and daunting, especially for first-time investors. Choosing a property manager for your investment property is a crucial step. While factors like experience and fees are crucial, there are often hidden aspects that can significantly influence your investment journey.  This guide aims to uncover these hidden items, empowering you to make informed decisions when choosing the right managing agent for your investment property.

“How to choose a great Investment Manager”

Fee Structure

The initial cost might seem too good to be true, possibly hinting at hidden charges down the line. In addition to the standard percentage-based fee, property managers may charge extra fees for services such as tribunal preparation, administration, and lease renewals. Understanding how many property inspections are conducted annually and whether there are extra charges for these is crucial. Seek a property manager with a clear, all-inclusive fee structure to avoid unpleasant surprises from unexpected charges not mentioned in the contract. This underscores the importance of thoroughly reviewing the fee structure within your contract. Neglecting this step has led numerous property investors to unexpected charges for items and services they assumed were covered.

Rates, Levies, and Builders Warranty

A reputable agency will manage these aspects on your behalf. For a smooth process of handling invoices related to council rates, strata levies, and utilities, consider having them directly sent to the agent. If your property is covered by a Builder’s Maintenance Warranty, ensure that your agent is informed, so they can oversee defect repairs, keeping you informed throughout the process.

Ask Clarifying Questions

Take ample time to review the rental property management contract. Don’t hesitate to ask the property manager any questions for clarity. Most managers are willing to assist and clarify any doubts you may have. Most property managers aim to assist you and are not looking to complicate matters for you.

Water Charges

Navigating water charges can be tricky. If the water invoice is in your name, it’s advisable for the landlord to pay the entire amount and then receive reimbursement costs from the tenant (in other words, pass on the charge). The idea of you, the landlord, paying the bill is to ensure that the bill is paid regardless. Keep in mind that the process of reimbursement involves issuing an invoice to the tenant, who then has 30 days to make the payment. To ensure compliance with legislation, our agency can assist in arranging a contractor to handle this on your behalf.

Landlord Insurance

Landlord insurance is crucial to safeguard your real estate investment. This type of insurance is designed to protect property owners from various risks that may arise during the course of renting out a property. It provides coverage for potential scenarios such as property damage, liability issues, and the loss of rental income. With the unpredictability of tenants’ circumstances, having landlord insurance serves as a safety net against potential disruptions in rental payments, ensuring that your investment remains financially secure. It’s important to thoroughly examine insurance policies, paying close attention to distinctions such as ‘malicious damage’ versus ‘damage.’ While a real estate agency cannot provide specific insurance information, we can offer guidance and point you in the right direction.

Market Knowledge and Experience

From knowing the demographics of the tenant pool, the best parts of a suburb, or simply what rental income your property will generate, market knowledge is king when it comes to managing rentals. Experience matters, don’t underestimate the importance of year’s worth of rental market knowledge.  An agent with extensive knowledge of your property’s specific market can handle challenges more effectively, comprehend local rental market trends, and provide insights crucial for maximizing your investment’s potential.

Communication & Technology

Effective communication is essential. Consider an agent’s communication style—opt for someone who is transparent, proactive, and capable of simplifying complex matters. Additionally, inquire about their use of technology, as it plays a vital role in modern property management. Agents utilizing online portals, digital payment systems, and advanced property management software can streamline processes and keep you updated in real-time.

“What your Investment Manager needs from Your End”

Ensuring a smooth collaboration with your investment manager is key to achieving the best outcomes. A friendly and open communication style, sharing information promptly, and aligning on common financial goals are the building blocks of a positive relationship. A warm and cooperative connection between you and your investment manager lays the foundation for a delightful and successful investment journey.

Tenant Selection Criteria

Communicate your criteria for tenant selection. If there are specific qualifications or restrictions, make sure the property manager is aware of them. This helps in finding tenants who align with your preferences.

Long-Term Strategy

Discuss your long-term strategy for the property with your property manager. This could include plans for renovations, potential changes in rental rates, or considerations for selling the property in the future.

Conclusion

By following these tips, you can navigate the complexities of property investment, ensuring a successful and profitable rental property. A well-established partnership can lead to a smoother and more effective management of your real estate investment. Should you have any queries, feel free to reach out to our agency for guidance. We’re here to make your investment journey stress-free and fruitful!