Everything You Need to Know About Property Management

Working with Property Managers & Property Management Services Explained

If you have just purchased an investment property, you’ll want to ensure it’s properly managed. As the name suggests, property management focuses on the day-to-day management of your property. A property manager’s goal is to prevent vacancies in rental properties while ensuring that investors receive the maximum financial return.

From the primary services property managers provide to the costs and how to find the right manager for you and your investment property, here you will find out what you need to know about property management. 

You can easily compare property managers by choosing to register your details at LocalAgentFinder. Receive proposals from an array of real estate agents in your area who have experience with the complex field of property management, so that you can select the best fit for your needs. Even with the wisest property investment, mismanagement can lead to lost profits. This is why it’s vital to have a firm understanding of what to expect from a good property manager.

What is a Property Manager?

Property management refers to the process of managing a rental property. A third-party property manager’s primary service is the day-to-day management of your property, whether it’s a house or a unit in an apartment building. They’re in charge of everything from finding tenants to collecting rent to inspections and organising maintenance requests. They represent investment property owners.

Property management companies can be both standalone firms or a part of a real estate agency. Besides hiring a property management company, the alternate option is to manage the property yourself.

Primary Property Management Responsibilities

Experienced and reliable property managers are not just managing properties. They will also fulfil this long list of property management services.

1. Finds quality tenants for your rental property

One of the most important tasks when renting a property is finding good potential tenants. The right real estate agent will handle the entire process, including:

• Effectively marketing your residential property to ensure a high volume of quality tenancy applications.
• Managing and attending property viewings.
• Interviewing potential tenants.
• Screening tenants. This includes checking their references, speaking to their current employer and using their access to national tenancy databases to view their rental and employment histories. These background checks can help weed out bad applicants and find those who will pay rent on time while respecting your property.

2. Prepares legal rental documents

Although every state and territory offers property managers a standard leasing agreement, some experts will go the extra mile by adding unique clauses to protect your needs. They help ensure the rental agreement looks after property owners and tenants for a smooth and easy transaction.

3. Prepares rental bond documents

In addition to the standard lease agreement, a property manager also organises the rental bond document on behalf of property owners. Standard bonds require that the tenant pays the equivalent of 4 weeks’ rent held by the Residential Tenancy Bond Authority.

This bond helps protect your property. It’s paid with the understanding that if the tenant pays all rent promptly and leaves the property in the same condition as when they moved in, they will have their full bond payment returned. The property manager can help serve as an intermediary should any disputes arise between both parties at the end of the rental agreement.

Although bond documents seem fairly straightforward, they often contain wording like “fair wear and tear”, which can lead to dispute. There can be some confusion regarding whether property damage was due to the actions of the tenants or due to simple wear and tear. With the help of a qualified property manager, this type of conflict is kept to a minimum or avoided altogether.

The agent will ensure that the rental agreement is as straightforward as possible, including organising a condition report. This is when they take photographs and notes of each room (and the outdoors if applicable) at the tenancy start and endpoints.

A good real estate agent will provide tenants with a clear document outlining their obligations concerning property upkeep to minimise future disputes.

4. Offers current market advice for renting the property

The most qualified property managers will know the local rental market down to the smallest details. You can find an agent with this in-depth knowledge of your local region by using the comparison tool LocalAgentFinder provides to ensure you find the right fit.

This knowledge is important because it helps the agent know how much rent to charge and your target demographic. By studying market trends, the property manager can advise their client if they need to offer a more competitive price or if they can charge a higher value.

Related Post: Buyer’s Versus Seller’s Property Markets

5. Handles the rental review process

At the end of each leasing period, you’ll need to evaluate whether the current rental price is ideal for market conditions. An excellent real estate agent will help you make this decision, and they can advise you whether it makes sense to raise or lower the rent, taking the local economy into account. This is a crucial decision to make to maximise your profits while avoiding periods of vacancy.

6. Forwards rental payments to landlords

One of the benefits of using property management services is that they can help expedite rental payments. A good property management company can credit these rental funds directly into your bank account via an electronic fund transfer. They should follow up on this transfer with an email notification, so you know when the money has been transferred for immediate access. Communication is extremely important in an investor and manager relationship.

7. Offers itemised activity statements

In line with keeping up communication, professional property management companies will offer you a fully itemised statement each month, along with a comprehensive statement after each financial year. This will feature all monthly activities pertaining to the property to help you update your records as an investor.

8. Offers regular property inspections

To avoid any unpleasant surprises at the end of a tenancy agreement, it’s in the best interest of both the tenant and the landlord to agree to property inspections. In most cases, the property management service or property manager will conduct an internal and external inspection at the start and end of each tenancy.

Each state and territory has different regulations regarding property management and inspections, but they’re typically performed every six months. The manager will prepare and send the landlord a written report of the property’s condition. The tenant also has the opportunity to co-sign this statement, showing that they agree with the assessment.

The inspection process serves two purposes. By providing a written report, the tenant is made aware that the landlord is serious about keeping up the care of their home. Simultaneously, it can catch any potential problems early, so there aren’t any surprises later on. This can help ease a landlord’s mind and encourage tenants to take good care of the property.

9. Deals with rental arrears

Overdue rental payments are known as rental arrears. This can be a tricky and uncomfortable situation for landlords to deal with. However, with good property management, you can delegate this task to their expertise. 

Property managers know the best ways to communicate with tenants. They can issue necessary notices and follow up with professionalism using several methods of communication until rental payments are up to date. Although you hope the issue is dealt with quickly, property managers will also know the proper channels to take to force an eviction.

10. Handles all advertising and marketing needs

One of the best advertising tools for rental properties in today’s tech-savvy world is the internet. A major advantage of choosing to rent your home with the help of a property manager is that they have access to all of today’s top real estate listing sites. Private landlords may not have the same level of access, which can inhibit exposure. A good property manager will also have a standing list of prospective tenants so they can begin the showing process immediately.

Physical “For Lease” signs can also be placed in front of the house to garner drive-by attention from local prospective tenants. This is particularly worthwhile if your property is located in a busy part of town. In more rural areas, estate agents will typically utilise newspaper advertisements and other marketing methods.

11. Helps maintain rental properties

To keep your investment in top shape in a competitive rental market, it’s essential to keep it looking its best. Effective property management includes access to a team of professional tradespeople who will perform ongoing maintenance or urgent requests at a reasonable price. This can save the landlord the time and money it would take to source their services. Managers can also help arrange urgent repairs or maintenance tasks on the landlord’s behalf if required.

12. Pays account and statutory charges

Along with arranging maintenance requests, property managers can also pay bills on behalf of their clients. This service ensures all maintenance, utility and body corporate fees are handled promptly. The agent will take the money for these bills out of the rental income before forwarding the balance to the owner. Staying on top of monthly bills can be a major headache, so delegating this task to a highly organised property manager is worthwhile.

13. Stays up to date with tenancy laws

Property managers have requisite professional training and are required to stay updated regarding tenancy laws and compliances (most states and territories have their own laws). Their job is to know the rights and responsibilities of both tenants and landlords. It’s also their responsibility to manage documentation and pass on any changes to their clients.

Using the complete services that your manager provides can yield many benefits. It helps landlords avoid miscommunication with tenants, ensures that the property is marketed most effectively and maximises net returns. Choosing the right property manager will help you feel confident that your investment property is being handled with the utmost level of care so that you can enjoy the fruits of your investment without the stress of its daily management.

Property Management FAQs

How much do property managers cost?

In Australia, property managers typically cost an average of 7.5% of the property’s weekly rent, but this can differ between states and regions. Property management fees are typically divided into three categories:

• An ongoing property management fee that’s usually a percentage of the collected rent. This can be anywhere from 3 to 10% and pays for all the responsibilities and services listed above.
• A letting fee, which pays for them finding tenants for your rental property and is usually equivalent to one or two weeks’ rent.
• Miscellaneous fees. Many property management companies will charge extra for certain tasks, including an administration fee, an advertising fee, an inspection fee, a maintenance fee and a renewal fee.

These miscellaneous charges are why it’s important to know upfront what’s covered in the property management fee so you’re not caught off-guard if something unexpected happens. You should also remember that cheaper is not always better. You want to find a property management company that’s affordable but also reliable.

For a comprehensive guide to up-to-date property management fees and commissions, check out our recent article: Property Management Fees & Commission 2022 Explained.

Can I self-manage my residential property?

Yes, about a third of Australian rental properties are managed privately. However, when you look at the long list of services property managers provide, people often find private property management isn’t worth the added stress in their life, as it’s basically a full-time job. You are solely responsible for finding tenants, collecting rent, organising repairs and inspections, and staying updated on the legal side of things.

How do you find a good property manager?

Here are some top tips for finding the best rental management:

• Do your research. At LocalAgentFinder, it’s easy to compare property managers, including their fees, strategies and rental performance, as the results speak for themselves. By comparing qualifications, you can feel secure knowing your property is in good hands.
• Focus on local property services who know your local market like the back of their hands. They’ll know the target demographic, what nearby amenities to highlight, and what rent to charge.
• Word-of-mouth. Ask local friends, family or colleagues for recommendations.
• Set up an interview. Once you have a shortlist, set up interviews with prospective property managers and don’t be afraid to ask lots of questions. Ask them about their preferred communication method, their experience and how many investment properties they currently manage.

So, when you’re looking for someone to manage your property, your first stop should always be LocalAgentFinder. LocalAgentFinder provides a free, impartial and transparent online service that allows property owners to compare local property management commissions and services. It’s obligation free, quick and easy. Start now!