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How to select the best property manager for your investment

By | Agent selection | No Comments

Some property investors do not realise the value of a good property manager until an incident or series of incidents occur that cost the owner time and money. To avoid the pitfalls of selecting the wrong property manager for your investment, we list the key areas that you should consider before selecting someone to take care of your valuable asset:-

Experience

What experience does the property manager have? Have they managed an investment similar to yours, how long have they been in the industry and what value do they bring to you and your asset? Property managers with varied experience across multiple forms of assets will usually have the right set of skills to provide you with a unique and holistic approach to dealing with whatever issue comes up with your property efficiently and effectively.

Who is looking after your asset?

Often the owner of the business, department head or worse yet the business development manager will initially meet with you offering all the bells and whistles of how great they are and will be, but who will be managing the property? Is it someone who is inexperienced or someone who is managing 125 – 200 other properties which does not allow them enough time to properly service you and your property? It is usually these time poor property managers that are under so much pressure that they take short cuts and eventually, issues creep up and cost you in the long run.

Value

Check with other agents and see how much their fees are and if they are competitive, however with all things in life be careful not to look at the cheapest possible offer as there is usually a very good reason as to why they are! Do they get multiple quotes for repairs, do they have trusted contractors, how often do they inspect the property and do they check after a repair has taken place? Does the agent have an online portal where can check on their last inspection, if rent is paid and if the property is in a great state of repair?

Reference

Ask the agent for a few references from local, interstate and international investors. It’s important to see how your property would be treated if your circumstances change and you need to travel. Often if an agent treats their interstate or international investors well and they are happy, local owners will be treated just as well but be careful as an agent will usually provide a contact who they know will give a great reference. Better yet ask your trusted friends and family if they know of a proven property manager that they could recommend.

What’s important to you

There are other important areas to consider such as what will happen in the event of an urgent repair, if a Tenant does not pay on time or how does the agent ensure that we are getting the best Tenant and rental possible. Is the agent honest, do they have integrity and are they across all legislation relevant to your asset etc. Whatever is most important to you, ensure that you communicate it to the agent to see how they deal with that situation or what evidence they can provide.

Direct Property Group will work with you on your priorities to give you the best service possible, for great value and most importantly you deal with the owners of the business direct, so you are ensured to get a level of treatment that very few agents can provide. We provide services across residential, commercial and industrial property.

Please contact us today if we can help you in getting the best out of your property investment.

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Is No News Good News?

By | Market View | No Comments

The answer we receive to this question is usually ‘YES’ but recently we have come across some situations that highlight that in Residential Property Management the answer should really be ‘NO’.

Recently we took over management from another agent, the owners comments were general but a few things he said got our attention such as he ‘never has issues’, ‘never hears from the agent’ and things seem to be ‘ticking along’. Wow it sounds like the perfect investment, no news from the agent, the tenants are ticking along and the rent gets paid on time.

For the past 10 or so years this has been the case for this owner, only a handful of new tenants throughout the years and very little maintenance made him feel at ease and that everything was under control. The owner decided to change management to us due to the previous managing agent changing property managers so many times and the first thing I suggested was that we inspect the property together, mainly as he hadn’t seen in for 10 years and things change over time and secondly so that we are both on the same page with the property.

Inspection day came, and we excitedly met the tenants only to be shocked with what was behind the front door.

Beyond repair, were the owner’s words! The carpet that was once cream was black, the bathroom was mould ridden and water damaged, light fittings were broken and not working at all, door handles were falling off (or not there at all), the list goes on and I’m sure you get the point.

On top of the disappointment with the state of the property, the Tenants names that were on the lease were no longer living in the property at all, the property had been turned basically into a short term share house.

This is one of the worst cases of ‘No news is good news’ we have come across and I wonder how much longer the property, its owner and tenants could be left alone in the dark without communication and management.

The property requires a full renovation of at least $50,000 and will be vacant during that time so you could say the cost of ‘no news’ could be around the $60,000 mark.

If you want to make sure this doesn’t happen to you, it might be a good idea to attend one of the routine inspections at least every second year and call your property manager for an update if things have gone quiet. After all you don’t ever want to be in this situation.

We’re great at getting things sorted and advising when things should be repaired or when items will likely need to be replaced, so please feel free to call us or email us if you have a property that needs to be taken care of now and into the future.

 

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Tough Times for Tenants Great Time for Investors

By | Market View | No Comments

Its the start of 2017 and the outlook for tenants is fairly grim. With vacancy rates sitting at a low of 2.4% during December 2016* it’s not looking like it will improve anytime soon.

January is usually a busy time for rentals, it’s the start of a new year people are moving interstate, overseas up-sizing, downsizing the list goes on. So what’s happening now, why are we not seeing the typical vacancy rates in Melbourne that we usually do at this time of year?

A few things have changed, the number one thing is that people are looking for houses. We could find you an apartment fairly easily however a good quality three bedroom house in Melbourne is being snapped up in record time. Last week we had one open for inspection of a three-bedroom house, and four application forms later and the property is gone.

Secondly, the rise of AirBnB is pushing the number of vacant properties to an even lesser level, in Sydney the number of whole houses/apartments on AirBnB is greater than the number of rentals on the open market according to the recent findings from the Urban Housing Lab at the University of Sydney*.

The reason for this is the Landlords can get higher returns for the short stay and holiday makers but it’s only going to push the price for a genuine rental property up more and Tenants will feel the squeeze. It’s only a matter of time before this trend continues here in Melbourne.

Take into consideration all of the above factors and Tenants that have a house are staying put, it might not tick all the boxes, they might well be outgrowing it, but given the open market they might just be onto a good thing with a reasonable rental rate and not having to spend every Saturday morning searching for their new home.

Landlords aren’t complaining however, low vacancy rates and consistent rental income is a win-win. It’s no wonder they can be selective when choosing from a variety of Tenants minimizing the risk of choosing the wrong Tenant. The bar is set high and Tenants as a whole are much more reliable than in previous times.

We are always interested in hearing your thoughts so please feel free to comment or get in touch if you would like to discuss the best way to maximize your investment property.

Source: *Real Estate Institute of Victoria
* AFR http://www.afr.com/real-estate/residential/airbnb-landlords-take-rental-properties-off-sydney-market-20161124-gswfbz#ixzz4WqAFJbTZ
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Professional Photography, is it worth the money?

By | Advertising | No Comments

In a business where first impressions are everything, I often get asked the question when discussing marketing fees with clients ‘Is professional photography worth the money’?

The answer is ‘Yes’ absolutely. Lets look at the benefits of investing in a professional photographer and what it can do for your investment property, whether it be for sale or lease the principals are the same.

In this day and age the internet is one of the most valuable marketing tool we have, when we search for products online what is the first thing we look at? Photos. If something catches our eye we then click on it to know more.

Long gone are the days where Real Estate Agents take the company camera to a property and take pictures of houses. In most circumstances there is no power on in vacant properties and that means dark photos anyway. Prospective buyers/tenants are looking at photos and sizing up the room, layout, lighting and much more. It is no longer just for selling a house and is a must when leasing a property too.

For a minimal fee usually between $150-$350 (if you want exceptional photos at dusk etc. costs can escalate much higher) a professional photographer will go to the property with all their equipment (not a cheap cannon quick shot from the office) and take a good range of photos from various angles, move furniture around to ensure the best picture is taken, change lighting and even declutter the room.

They then take the time to select the best photos and edit them removing shadows and touching up blemishes resulting in some great photos of your property. You only need to look at the comparison photos here to see how much better some professional photos look against the ones taken on an iPhone.

Another benefit is that you can keep the images for future use, if you decide to lease or sell in the future you have the images ready to go and even to look back at the past an reminisce about the great time shared at the property. For Landlords it can even act as evidence of the properties condition if things go sour with a Tenant.

All in all, for a very small investment it will bring about a significant return – getting people through the door of your property in the first place!

Contact us to show you how presentation can assist you to get better results for your property.

 

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Things to remember this Winter

By | Maintenance | No Comments

Its cold in Melbourne and Winter is officially here. While we are keeping ourselves warm we need to keep in mind a few things that we should attend to at this time of year.

Cleaning Gutters
All the Autumn leaves have most likely filled our gutters and with heavy rain expected during the Winter months this can be a problem waiting to happen. Blocked gutters can lead to water damage inside the home, rusty gutters (which can be expensive to replace) and timber rot around the facia of the home. If not maintained on a regular basis the gutters can become so full and rusted that they eventually fall off altogether. Its a simple and usually affordable maintenance item that tends to be forgotten, if you have a Property Manager looking after your investment be sure to ask them to arrange it for you.

Mould and Condensation
It is a common problem and is usually more of an issue during the colder months, condensation builds up around our bedrooms, windows, ceilings and mirrors in bathrooms when we have the heaters on inside and outside the home the temperature is much lower. To prevent health risks to those inside the home cleaning mould and condensation regularly can help minimise the spread. To prevent green, furry mould every care should be taken to ensure that footwear and clothes are not put away in wardrobes or in dark confined spaces in a damp condition. Mould cannot grow if dry air is circulating so while it might be chilly to open windows it may be necessary to do so to ensure adequate air flow.

Get your heater serviced
While we are using are heaters on a more regular basis at this time of year, if you haven’t done so already arrange for a licensed plumber to service your heater. Gas heaters should be tested for carbon monoxide every two years and ducted heating should have the vents and air return cleaned. A recent fire in a home in Melbourne which was reported as starting at the central heating unit and spreading through the home by igniting dust in the heating duct system highlights the importance of keeping heating ducts clean and free from inflammable substances.

If you have any comments or would like to speak to us about arranging these maintenance items at your investment property please feel free to contact us.