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The REIV has written to the State Treasurer, requesting an urgent change to the process that is currently in place for a commercial landlord to receive the Coronavirus land tax relief.
REIV President Leah Calnan said the current method is overly bureaucratic and greatly disadvantages commercial property owners who have negotiated a rent relief in good faith.
Currently, once commercial rent relief negotiations are completed, the tenant must complete an online form to enable the landlord to apply for land tax relief. Only the tenant can complete this form for the landlord.
Our primary concern is that there are no incentives or consequences for the tenant if they fail or refuse to do this.
The commercial property owner is at the mercy of their tenant to apply for the tax relief promised by the government.
The process is not fair for the landlord and their agent who have, in good faith, negotiated rent reduction for the tenant as per government guidelines but are unable to claim the promised land tax relief because their tenant fails to complete the form.
Ms Calnan emphasised that all stakeholders must be equally supported during this time. It is important to remember that the majority of landlords are mum and dad investors who are doing their best to support tenants impacted by the coronavirus.
 An illustration of the bureaucracy around the process is evidenced by this extract from the State Revenue Office’s website: 
Once you have completed the form online, you need to send it to your landlord. You can download a copy, or email a copy to yourself, which you can then email to your landlord, or send it to them directly by entering their email address on the final page, titled ‘Form Complete’.
The Real Estate Institute of Victoria urgently requests that an alternative process be enabled to ensure landlords are not unduly disadvantaged.
In order to manage the financial impact for both the landlord and the tenant, the rent relief could be only initiated after the form has been submitted or even better, the process scrapped.
Similar process issues are also present in residential rent negotiations. A rent “agreement” should only be submitted when all impacted parties – landlord, tenant and agent have agreed.
The CAV website permits submission by one party where a true agreement may not be in place.
LEAH CALNAN is the REIV President 
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Coronavirus Land Tax relief system not working: REIV's Leah Calnan

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Why are such poor-quality photographs used in the marketing of rental properties? 
Already this year I have seen a property marketed with a photo of a clothesline with a pair of underwear on it. I kid you not. And another of a bedroom window. Seriously, what is that trying to show a prospective tenant – that there is a window or the style of window covering it has? But the best I've seen so far was a lovely picture of the back fence. 
There are times when I wish I could make contact with the owners and ask if they have seen the way their investment property is being marketed. Maybe there is a reason why it’s still sitting vacant, and it’s got nothing to do with the asking rent!
But perhaps the fault isn't just with property managers; perhaps owners out there don't really see the benefit of having professionally taken or, at least, high-quality photos. Particularly now, with so many automatic features on both standard cameras and smartphones, it really isn’t that hard to take decent photos, but someone needs to set a standard of what is acceptable and what is definitely not acceptable. 
When an owner isn’t paying for a marketing levy or working with a marketing budget, does it lessen the importance of using good photos? Does it become a part of the service provided by the property manager that doesn’t receive high priority?
And something else that puzzles me is that unless the property undergoes substantial renovations, the photos can be used over and over again.  So why not spend a few dollars and have photos taken both day and night? Inside and outside the property?
Another suggestion is to pay the small connection fee to have the electricity connected; this is especially important during the winter months. Not only can you take even better photos but you can show prospective tenants through after 5pm. 
Remember: it's both a tax deduction and another way of promoting your property differently to the majority of others that you may be competing against.
Sadly, it’s no wonder owners negotiate so strongly when it comes to the fees being charged by property managers, it’s because they really don’t see any differences between everyone out there. 
So who will join me to make the world of property management a little different and a lot better? I want my business to be the Cirque du Soleil of property management!
Leah Calnan is the director of <a target="_blank" href="https://www.metropm.com.au/" title="Metro Property Management homepage">Metro Property Management</a> in Victoria and is the chairwoman of the REIV Property Management Chapter.
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Use quality, underwear-free pictures in marketing your property to tenants: Leah Calnan

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We hear the term "guarantee" bantered around a bit within the property management world.  We hear prospective tenants regularly offer to have their mum, dad or guardian go as a guarantee for them at the time of applying for a rental property.
And many property managers believe by taking the guarantee they are further protecting their owner should the tenancy fall into arrears or should there be damage at the conclusion of the tenancy.
But sadly this is not correct. The correct facts are:
<ul>
<li>If you take a guarantee, you are unable to receive a bond.</li>
</ul>
<ul>
<li>And the guarantee is only responsible to guarantee the amount that is equal to the bond amount.</li>
</ul>
So now I am sure you are seeing the potential problems.
A bond should be taken on every single occasion, unless instructed by the owner of the property otherwise (and you would confirm their instructions in writing of this request).
In situations where parents or guardians are wishing to assist prospective tenants, instead of discussing guarantees (which I know you see now are not the wise option), have those people complete a tenancy application form.
Process their application and present all the applications to the owner for consideration. Yes, I know they won’t be residing at the property, and that is OK (and it's not sub-letting, for anyone thinking it). But by having them form part of to the tenancy agreement, they are now equally responsible for the term of the tenancy. They are responsible for the condition, rental payments and for any potential loss in excess of the bond amount.
Leah Calnan is the director of <a href="https://www.metropm.com.au/" title="Metro Property Management homepage" target="_blank">Metro Property Management</a> in Victoria and is the chairwoman of the REIV Property Management Chapter.
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Why landlords should take a bond from every single tenant

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While I am of the belief that owning an investment property should be a long-term commitment, there may be times when a rental property needs to be sold, and those circumstances may include up and coming retirement, reducing debt, marriage separation and death – just to name a few. 
Selling a rental property can be a dramatically different experience to selling your family home. Not only do you need to think about your wants as the owner, but you must also strongly consider the tenants throughout the whole process. Yes, I know the tenants don’t own the property but you must remember it’s their home and when you sell a rental property, with tenants in it, you are selling their home. 
Of course, you may decide to sell the property between tenancies. There are arguments for and against putting an investment property up for sale when it is vacant: 
The pros of marketing a vacant property for sale include:
<ul>
<li>The property can be spotlessly clean at all times</li>
<li>There are no restrictions on showing prospective buyers through the property at any time</li>
<li>There is no concern for the next owner that they are inheriting bad tenants. </li>
</ul>
The pros of marketing a tenanted property (with good tenants) include:
<ul>
<li>The prospective owner knows the potential rental return in advance</li>
<li>The new owner has a rental income from the day he takes ownership</li>
<li>The property looks more comfortable and “homely”. </li>
</ul>
Good tenants can definitely add value to your property. But even the best tenants will be slightly concerned when you put their home up for sale. So I make one simple recommendation to assist everyone, and that is to make sure communication remains at the highest level possible. Over the years I have seen many things go pear-shaped, with a sales campaign of a rental property, and the worst way to start the campaign is to erect a For Sale board at the property before you let the tenants know. 
Can you imagine coming home from work one night and finding a For Sale board up on your home when you know nothing about it? Now I know that a sales agent would never do that to an owner-occupied property, yet it happens time and time again with rental properties. And I really don’t understand why. 
STEPS FOR A SUCCESSFUL SALES CAMPAIGN
We have managed many sales campaigns for our property owners over the years. A result of this experience is that I have come up with a series of steps that, if followed, will help you in your campaign. So let’s run through the steps which I believe are beneficial for all parties. 
1. The owner will normally make contact with the property  manager or the agency and ask for a market valuation. It’s important to ascertain what the purpose of the valuation is for:
<ul>
<li>Are the owners looking to sell the property?</li>
<li>Are they refinancing the property for other reasons, such as to purchase another investment?</li>
<li>Or is there some other reason – are they weighing up their options? </li>
</ul>
An owner will rarely just ask for a market valuation for the sake of it, generally there is an underlying reason, so ask lots of questions and find out their motivation. 
2. If the owners are asking for the market valuation because it is their intention to sell the investment property, then the next step is to make contact with the tenant to inspect the property. 
3. During this inspection take the time to have a chat with the tenants. You never know, perhaps they are interested in purchasing the property. 
4. During this appointment it’s imperative that you work on establishing some rapport with the tenants to gain their confidence that you will work hard to avoid inconveniencing them any more than is absolutely necessary. 
5. The owner/property manager and sales agent must decide what type of sales campaign they will be running. Will it be sold at auction or by private sale? The tenant should be informed of this decision and also given the timeframes for the campaign. 
6. Will there be set open times every weekend? On Saturday and Sunday? How many Open for Inspections will be conducted each week? Again the tenants need to be involved with these decisions. 
7. What happens if the property is slow to sell? How long will you keep the property on the market for?
Keeping a house ‘spick and span’ at the best of times can be hard work, let alone through a sales campaign. So it’s a good idea to provide the tenant with a ‘thank you’ or incentive during the campaign. Maybe some movie tickets so that they can take the family out during an inspection. 
Or even consider a reduction in rent over this period to compensate them or allow them to: 
<ul>
<li>Pay for a house cleaner once a week</li>
<li>Or for a gardener or pool man once a fortnight</li>
<li>Have fresh flowers around the house during open for inspections.</li>
</ul>
 
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TROUBLE-SHOOTING
Let’s look at a couple of areas where things can sometimes go wrong… There have been occasions when the selling agent has not realised that a chattel within the property belonged to the tenants and therefore when it came time for the tenant to vacate, they also removed the chattel. If this occurs after settlement it could create an opportunity for a compensation claim to be made against the selling agent and/or vendor. 
The chattels people have been caught out on include window coverings – such as curtains – air conditioning units, portable spas and additions made to the garden, such as trees and plants. So if you are selling your investment property, make sure the selling agent establishes a good working relationship with your property manager and/or tenants and is able to clarify what chattels belong to the tenants. This will prevent such confusions potentially costing you money. 
Another more common area where things can go so wrong with the selling of the property is usually when there is conflict or a lack of a good working relationship between the salesperson and tenant. 
A good property manager may be the saviour here as they can generally work with both parties to come to an agreement that works for both the tenant and salesperson. 
They could get both parties to accept setting open times once or twice a week, instead of expecting the tenant to take telephone calls every day asking for an inspection. Providing the tenant with an outline of the marketing campaign in advance can also greatly assist. 
This avoids the chance of the tenants scheduling their twin sons’ seventh birthday party at that same time as an open for inspection! A little preplanning can save some major “oops” in the future. 
SETTLEMENT OF A RENTAL PROPERTY WHEN TENANTS NEED TO VACATE
 
Earlier in the chapter we mentioned the two scenarios: selling your investment property with tenants still living in the property and selling the property when it is empty. Of course, not all buyers of a rental property will want to continue to rent the property out. The new owners may choose to live in the property themselves and here is where complexities come into play. 
In the property world you will hear the expressions ‘rent and profits’ and 'vacant posession'. Rent and profits is when there is a tenancy in place and the purchaser of the rental property receives rent from their settlement date. If the new owner retains the same property manager then there is minimum inconvenience for the tenants who just continue paying the manager the rent in the same way as before. Should the management of the property change, tenants will have to be advised of to whom to pay the rent. It is not necessary for a new tenancy agreement to be prepared or signed at this stage unless the lease has expired or is coming up for expiry. It is also not necessary for a new condition report to be prepared – the original report remains in use until the tenancy comes to an end. 
Before settlement takes place, it’s important for the property manager to speak to or even meet the new purchaser in person if this is an option. It’s at this stage that a new management authority is prepared which will be effective as of the date of settlement. An owner’s instruction document should also be completed to ensure you have clear and concise instructions on how the owner wishes the property to be managed. 
Then, upon confirmation of settlement, all of the purchaser’s details must be added to the property manager’s software program. 
It’s a valuable exercise, a few days prior to settlement, to ensure you have checked that there are no outstanding matters relating to the property, such as maintenance. Are there any accounts still requiring payment by the vendor (the previous owner) such as an electricians’ or plumbing invoice? 
With tenanted properties, you may need to ask your owner who is completing the rental adjustment. This calculation ensures the vendor receives all the rent money up until the settlement date and the purchaser receives monies after that date. 
This can often be overlooked as some solicitors and/or conveyancers assume the rental adjustment will be completed by the current property manager. Make sure you find out who is doing it – it will save you potential headaches after settlement takes place. 
Don’t forget to let the tenant(s) know once settlement takes place. A simple letter is enough to confirm the change in ownership. 
A thank you may also be a nice gesture. 
I find it funny that sales agents provide gifts to the vendor and purchaser once the property has settled, yet the tenant, who may have made that property sparkle throughout the sales campaign, is completely forgotten. Why is that?
 
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Pre-settlement inspections
With all property sales, there is the option to complete a pre-settlement inspection prior to the settlement date. It’s ideal to complete this inspection 7 to 10 days prior to settlement. This allows the purchaser to ensure the property is as per the original inspection. 
I would also recommend giving the tenants a good few days’ notice of this pending inspection.
Once settlement takes place, don’t forget to cancel the owner’s landlord insurance policy and activate a new policy. In many cases, the original owner will receive a refund for the unused portion of the policy. 
Vacant possession
Vacant possession is just as it suggests – the property is vacant at settlement. This means that if tenants were still living in the property during the sales campaign they must have left by the date of settlement. 
Over the years I have seen salespeople sign contracts with a purchaser, ticking the vacant possession option and then they have completely overlooked or (perhaps) ignored the fact that there was a fixed tenancy agreement in place. 
Or the one I love the most (note my sarcasm) is when the property is sold with vacant possession on a 60-day settlement, yet legislation requires the tenant be provided with a minimum of 65 days’ notice in order to have them vacate. 
Now I don’t know about you, but no matter how hard I try to make that one work the maths just doesn’t add up. An easy fix is to extend the settlement date. But what if the purchaser has another settlement lined up and needs to settle both properties on the same day? 
This error by the salesperson can ultimately result in:
<ul>
<li>The sale falling over</li>
<li>The purchaser seeking damages from the vendor for compensation for failure to settle on time</li>
<li>The vendor seeking those said damages and perhaps more from the selling agent.</li>
</ul>
So stay alert and watch out for this because it happens all the time.
<img src="/images/stories/2012/11/simple.jpg" style="margin: 5px; float: left;">
 
 
Leah Calnan is the director of <a target="_blank" href="https://www.metropm.com.au/" title="Metro Property Management homepage">Metro Property Management</a> in Victoria and is the chairwoman of the REIV Property Management Chapter.
Leah is the author of<a target="_blank" href="https://majorstreet.com.au/simple-and-successful-property-management/"> Simple and Successful Property Management</a>, published by Major Street. This is an excerpt.
 
 
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The seven key steps to selling a rental property: Leah Calnan

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All your marketing has been a hit and you have received applications from prospective tenants. Depending on your personality this can be the fun part of property management, if you are a “people person”, or it can bring a great deal of angst as you try to select tenants you feel 100% certain will do the right thing throughout their tenancy.
My approach is to keep it simple but always be thorough.
Nowadays teenancy applications come through in one of the following formats. They are either on the agency’s tenancy application form or submitted electronically via a 1Form application.
1Form allows for tenants never to have to complete a paper tenancy application form again as it stores the tenant’s personal information, including proof of identification, for a small fee. This is a small step towards a property manager working in a paperless office (well, I can dream, can’t I?).
If you are employing the services of a property manager or agency, they will process the tenancy applications and check all the references and come to you with a shortlist of suitable applicants.
You need not be involved until it’s time to approve the tenant applications.
However, it’s important to have an understanding of this process.
The first thing you need to do is review the application forms and ensure that they have been 100% completed. Time and time again I see applications submitted for properties that are not complete. They are missing vital parts of the applicant’s personal or employment information or the identification paperwork has been forgotten.
Before you can start on anything you need to ensure the applicants have signed a privacy statement. Tenants should be aware that they have a right to their private information being kept confidential, and should expect to be asked to sign a privacy statement.
Proceeding with tenancy applications
The key to processing any tenancy application form is to find out what the story is. You need to confirm current employment and previous employment (if the current employment is less than two to three years). This includes confirming not only the salary package for your applicant, but the length of their employment and the terms of employment, i.e. are they employed on a full-time, part-time or casual basis? Are they currently on a probationary period because they have just commenced with that company? If so, how long is that period? How would the person providing the reference describe them? And finally, who is providing the reference? Employment should only be confirmed by a direct manager, HR department or team leader (not a workmate). You may be surprised to read that sometimes people are not totally honest on their application forms, so it’s up to you to piece together the story. Yes, it may take a little longer than you like, however it could save you time, expense and heartache in the long run.
The applicant’s current tenancy history and previous tenancy history must also be confirmed. It’s not sufficient to simply receive a copy of the tenant’s recent payment ledger. Nor is it enough to make a call to the agency and have the person answering the telephone say, “yeah they are great tenants, you won’t have a problem.” Again you need to have a thorough understanding of the applicant’s story.
Character references, while they generally only say nice things about a person, are useful in building all parts of your story. I would always ask a character referee, “If you had a rental property would you rent your property to the person?” If there is a pause or stumble, then maybe this applicant isn’t the most suitable tenant for your property.
It’s imperative you have an understanding of why the applicants are moving out of the current property.
<ul>
<li>Do they own it and have they sold it?</li>
<li>If so, did you speak to the selling agent?</li>
<li>What were they like to deal with?</li>
<li>How was the property presented?</li>
</ul>
In Western Australia, at the time of submitting the application form, some owners/property managers will ask a prospective tenant to pay an option fee. This shows that the tenant’s intentions are genuine. On the application form it will detail if all or part of the fee can be kept if the tenants decide not to go ahead with the tenancy. If the owner decides not to proceed with the tenancy, then they must return the fee to the tenant in full. If the tenant takes up the tenancy, then the fee is usually credited towards the first month’s rental payment.
 
<hr class="system-pagebreak">
Approving tenants 
If you have a property manager or agent managing your property, when they are satisfied with the processing of the tenancy applications they will present the applications to you (the owner) for consideration. If you’re managing your own property this is the time to review and compare the most promising applicants. Now, with everything, everyone likes things done differently.
Some agents will call you, or perhaps SMS or email a summary of the processed applications.
The summary may look a little like this:
Move in date/commencement date of tenancy:
Length of lease:
Rent per week:
Who/relationship (couple, friends, family, etc.):
Age(s):
Occupation(s):
Net weekly (combined) income:
Summary of rental history:
• Rent amount paid
• Length of occupancy
• Breach notices for late rent or damages
<div>
• Any pets?
</div>
This is really a simple yet effective way of summarising an application. It’s also useful to keep, to refer back to if anyone suffers any memory loss after the tenants move into the property and no one can remember providing permission for the approved applicant to keep a pet at the property!
There are two popular databases used by property managers to completely put a landlord’s mind at rest. They are the National Tenancy Database (NTD) and TICA. The NTD is a tenant database exclusively for the use of estate agents. The system provides the searcher with access to over 1.5 million individual tenant records, both residential and commercial, provided by over 7,000 real estate agents throughout Australia.
The database also provides access for commercial agents to full Australian Commission records, company credit reference association files, court judgements, bankruptcies, etc. The National Tenancy Database also offers full debt recovery at no costs unless funds are recovered. Note: It does not include legal expenses.
Information available by checking prospective applicants on the database includes:
<ul>
<li>Whether there are any unpaid orders from Victorian Civil and Administrative Tribunal (VCAT) (or similar state body), i.e. for unpaid rent, unpaid damages</li>
<li>Records of tenants who have vacated properties and referrals back to previous managing agents where they still have an interest in the tenant</li>
<li>Tenancy agreements broken by the tenant</li>
<li>Dollar value of any damages to properties</li>
<li>Current tenant notification, giving agent name and contact telephone number</li>
</ul>
TICA provides similar information. Often these databases are portrayed as tenant "black lists", however this is certainly not the case. The databases are used exclusively by agents with fees payable according to how many checks are carried out.
You should complete the tenancy database check at the final stage of processing the application, when all the previous checks have come up clean. If you find out earlier on in the process that the tenant has been consistently late with rent, there’s no need to pay to check these databases, as you will have already rejected this applicant.
So providing the tenancy database check is all clear, then it’s all systems go to congratulate the tenant.
 
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Bond
In Victoria the approved tenant is required to pay the bond and first month’s rent to secure the property in their name. Payment may be made via EFT, dropping off cheques to the property manager’s/landlord’s office, depositing the monies directly into the agent’s trust account. The Bond Lodgement form must be completed and forwarded to the Residential Tenancies Bond Authority (RTBA) for lodging within 10 business days of receiving payment for the bond.
Ingoing condition report
Now before you go ahead and hand over the keys of the property to your winning applicant, you need to go through the property and complete the ingoing condition report. The condition report is a room-by-room document that should detail the condition of the property throughout – both inside and outside – and the overall presentation/cleanliness of the property.
The condition report should be thorough and include as much detail as possible. This is because not only will you use the same report at the conclusion of the tenancy agreement (to enable you to compare the property at the beginning of the tenancy and again at the end of the tenancy) but it may be required to be used as evidence at any tribunal hearing should a dispute arise.
Please take the time and prepare a detailed report. It should never be a five-minute inspection and ultimately it will save you in the long run and reduce the possibilities of unnecessary disputes.
A colleague recently told me it took her six hours to complete an ingoing teport on a property in Brighton where the rent was $3,000 per week.
Tenant sign up
I believe the tenant sign up is extremely important and it should be treated as such. It’s where the expectations are set as to how the tenancy is to run. Throughout my career I have seen many different methods of conducting the tenant sign up.
A tenant sign up needs to be an experience! It’s so important to take the time to thoroughly explain all the terms, conditions and clauses throughout the lease/tenancy agreement. While you as the property manager or owner may have been through this process many times before, has the person sitting across the table? Is this their first experience of renting? If you don’t take the time to explain to them and outline your expectations of them, then how are they ever going to know if they can or cannot do something?
It’s also not just about highlighting a few areas where the tenants need to sign. You have a duty to explain to them things such as:
<ul>
<li>Even though they have signed a bond lodgement form, do they know where the monies are held or what happens at the end of their tenancy? Don’t forget to explain how they receive their bond monies back at the conclusion of their tenancy.</li>
<li>Utilities – are the services included? If not, who has to arrange for their connection? The property manager/agent, the owner or tenant?</li>
<li>What are the tenant’s responsibilities? Each state has an information booklet which must be provided to all tenants at the time of signing their initial Tenancy Agreement. The information booklet/flyer is called something different in each state:</li>
</ul>
Victoria: Renting Rights &amp; Responsibilities
New South Wales: Fair Trading Fact Sheet – New Tenant Checklist
Queensland: Renting a house or unit in Queensland (Form 17a)
Western Australia: Renting a home in Western Australia – a tenant’s guide
South Australia: Consumer and Business Services – Information Brochure
Northern Territory: A Guide to Renting in the Northern Territory
Tasmania: The Rental Guide
ACT: The renting book
<ul>
<li>Have they seen a condition report before? Perhaps not, particularly if they have never rented before, so take the time to walk them through the document. Explain to them that a condition rReport is a room-by-room document that details the condition and presentation of the property. The condition report is completed prior to the commencement of the tenancy agreement by the property manager/agent/ owner. It’s imperative that you outline what they are required to do with that document and what is the expected timeframe for the return of that document? What happens if that document is not returned? Are there consequences at the end of the tenancy agreement?</li>
<li>Keys, remotes, swipe passes – how many are being handed over? Is there a key for all door locks, window locks, letterbox, side gates, etc? I would recommend making a photocopy of all the keys, remotes, etc. that you hand over to your tenant. This ensures you receive them all back at the end of the tenancy and it may reduce any additional costs between tenancies and avoid the outgoing tenant saying, “I never received a letterbox key,” or, “I only received one garage door remote”.</li>
<li>Urgent maintenance –  what happens if the kitchen tap won’t turn off and it’s 9.30 on a Saturday night? Under most legislation, an after-hours contact number MUST be provided to tenants to ensure they can have matters such as these addressed. That contact number could be the owner’s, the property manager’s or the agent’s preferred registered and qualified tradesperson. </li>
<li>Is the property within an owners’ corporation/body corporate/strata management set up? If so, you are required to provide tenants with a copy of the rules and regulations specific to that group of properties.</li>
<li>If the property forms part of a high-rise apartment building, what is the process of moving in and out of the building? Often there are allocated times and days and they must be strictly adhered to. The lift may need to be booked specifically for your tenant’s move in or out and often this may include a heavy duty wall covering being installed to prevent any damage to the inside of the lift.</li>
</ul>
As you can see from the list above, there are many aspects that need to be covered in a tenant sign up so allow somewhere between 30 to 60 minutes to sit down with your tenant to run through everything. While signing all the paperwork probably won’t be one of the most exciting things they do in their life, it’s really up to you to make it a great experience.
Summary
<img style="margin: 5px; float: left;" src="/images/stories/2012/11/simple.jpg">One of the main challenges for self-managing property owners is the relationship with the tenants. You don’t need to be a friend to your tenants. In fact there’s no need to get to know them too well. Your rental property is there to provide you with the best financial return possible. That means you need to put the rent up sometimes, make sure you recoup for any damages and sadly even end tenancies that are not going smoothly. Putting a property manager in place to deal with all this can really make a difference to how well you sleep at night and how successful the return on your investment can be.
Many times I have spoken to property owners who have been quite upset that, despite being comfortable managing staff in their own business and dealing efficiently with people on a day-to-day basis, they had failed to manage their tenants successfully.
Leah Calnan is the director of <a href="https://www.metropm.com.au/" title="Metro Property Management homepage" target="_blank">Metro Property Management</a> in Victoria and is the chairwoman of the REIV Property Management Chapter.
Leah is the author of<a target="_blank" href="https://majorstreet.com.au/simple-and-successful-property-management/"> Simple and Successful Property Management</a>, published by Major Street. This is an excerpt.
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A step-by-step guide to securing tenants for your investment property: Leah Calnan

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Working in the state of Victoria, we work within a deregulated market, so our fees for leasing and managing properties is fully negotiable nowadays and in fact it has been that way since the mid-1990s.
In the past 10 years we have seen the growth and establishment of property management into a long-term career rather than a side step into sales.
However, landlords must realise when management fees are heavily discounted, it can have a snowball event.  In the most extreme case the agency’s rent roll is sold and subsequently purchased from one of its competitors because it could no longer continue to operate a business, let alone make any profit.
Other consequences will generally include the continue turn over in property manager or property management staff.  Low management fees will generally equate to lower wages, less or no training and a continual churn in staff. Sometimes directors and/or senior managers are more focused on securing as many managements as possible irrespective of whether the agency can afford to properly service and maintain the business.
So after continual poor service, the landlord will move on to another property manager.
A further aspect that should be considered is what is actually included in the lower management fee.  Can you honestly expect to receive the same quality of service and inclusions when you are paying 4% rather than the industry standard, approximately 7%??
Cheaper is generally never better so here are some things to consider;
<ul>
<li>Are routine inspections included at the lower rate? </li>
<li>How much extra will you pay if your tenant falls into arrears?</li>
<li>How often does the agency pay its owners? Once a month? </li>
<li>What is the true quality and experience of the property manager? </li>
</ul>
Just like all service industries, you pay for what you get. Cheap is never a good long-term solution. It may serve as a short-term financial fix, but in the long run and from my experience it results in the landlord having to pay an another property manager more money to sort the problem out!
Leah Calnan is the director of <a target="_blank" title="Metro Property Management homepage" href="https://www.metropm.com.au/">Metro Property Management</a> in Victoria and is the chairwoman of the REIV Property Management Chapter.
 
 
 
 
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You get what you pay for in property managers who work cheap

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Have you ever stopped to think for a moment what it’s like for a property manager to evict a tenant, a person from their home?
I fully accept and agree it has to happen at times, especially when the tenant is behind in rent. But have you ever thought for a moment how you might feel or what happens or how it gets to that point?
Sometimes situations arise, and as human beings we sometimes choose not to want to deal with it.  It’s easier just to put our heads in the sand and hope it goes away. But I am afraid it doesn’t go away – it just gets worse!
Recently my office experienced a situation where the tenant who was experiencing a vast array of illnesses was continually failing behind with the rent and always had a different excuse each time as to why she hadn’t paid the rent.
The matter proceeded to court, where an order of possession was granted and the tenant failed to attend the hearing, so the owner was left with no choice but to purchase a warrant to have the tenant evicted.
A day or two before the eviction was due to take place, the tenant applied for a review on the court’s determination.  We attended the hearing – she didn’t.  Again the warrant was reactivated and the 14 days (as it is in Victoria) started all over again.
Then the tenant’s father called and begged for more time.  He wasn’t prepared to pay any of the arrears that his daughter owed, but he thought the owner should let them have more time and not evict his daughter.
All this happened and still no rent was paid.
The execution of the warrant finally took place and upon entering the house there was absolutely no sign at all that the tenant had packed a single thing.
The Salvation Army became involved and they needed numerous times and dates to co-ordinate the removal of the tenant’s goods.  This process took another three weeks.  And yes, it’s always a better result to have all the goods removed rather than proceed down the pathway of storage and auction etc., but at the end of the day – what does the owner receive?  All the rent is still outstanding, nothing has been paid and the tenant has effectively used the property as storage for the past three weeks without paying a cent.
Sometimes the perception of an owner is so misconstrued. For my owner this was his first time as an investor.  He thought he was always fair and reasonable to allow some extra time but in the end – what does he get – nothing but a lot of stress and probably a strong inability to trust again in the future!
The end result for this owner is he will fight the insurance company for the next month or two for a fair and reasonable settlement.   A process, a system and outcome that really is a little unfair!
Leah Calnan is the director of <a target="_blank" title="Metro Property Management homepage" href="https://www.metropm.com.au/">Metro Property Management</a> in Victoria and is the chairwoman of the REIV Property Management Chapter.
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Evictions take a toll, and the process can be long and unfair

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<a target="_blank" href="https://www.propertyobserver.com.au/landlords/fire-in-an-investment-property-leaves-unanswered-questions/2012012253108">A little while ago</a>, I shared a story with you about a fire that substantially damaged one of our rental properties.
The story overall is a little sad.  The owners were away on holidays, enjoying a summer break with their children, so it wasn’t until a few weeks later when they returned that we were able to let them know what had happened.  I suppose this is a great example of why it’s so important to let your property manager know when you go on holidays.
The tenant, after he moved into the other property we arranged for him, was severely injured in a motorbike accident. He is still recovering in hospital and will never live the life he once had.
It’s now more than two months down the track, and the rebuilding of the property is coming to an end.  The new kitchen has been fitted, the ducted heating has been replaced, the walls and ceiling replaced and repainted where required, all the electrical wiring checked and the windows replaced.
We are in the final stages of choosing the carpet colour and new blinds for the property and getting things ready for the releasing of the property again.
The property manager, Courtney, has continued to co-ordinate access for the tradespeople on behalf of the owners’ corporation.  She has also continued to ensure our owner was updated on a regular basis.
There are several aspects of this story that investors really need to think about.
Firstly, the owners have not received any rental payment throughout the past few months, and while yes, they will receive loss of rent income from the owners’ corporation insurance policy after the claim is finalised, processed and then a payout made, the challenge is managing their own cashflow during this time.  It’s been tough for them!
Secondly, if the owners had not had a current landlord insurance policy in place, they would have had to pay for replacing the carpets and blinds, at a cost of about $2,100. The owners’ corporation’s insurance policy has co-ordinated the rest of the rebuilding process.
So the next time your property manager asks you “Do you have a landlord insurance policy in place?”, I hope you remember this event and the circumstances that occurred and were through no fault of the owner.
 Leah Calnan is the director of <a target="_blank" title="Metro Property Management homepage" href="https://www.metropm.com.au/">Metro Property Management</a> in Victoria and is the chairwoman of the REIV Property Management Chapter.
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A fire in an investment property proves the importance of landlord insurance

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A property manager should be competent to look after all the day-to-day runnings of the property – from assisting the owner with tenant selection, to co-ordinating maintenance, making suggestions on property improvements and updates, paying the outgoings such as council, water and owner corporation accounts, and collecting the rent for the owner.
They should have a good understanding of what the owner expects of them, and they should be proactive and responsive with clients – without simply passing on the problem to the owner to make a decision. Owners pay for the services of a property manager for their advice, experience and to provide direction and recommendations when it comes to making the tough decisions.
When looking for a property manager, I recommend investors take a few minutes to speak to someone they are looking at employing. Don’t base your decision on fees alone, nor the location of the property manager.
Times have changed and a property manager no longer needs to be around the corner from the residence. If you don’t have time to call, send an email and review how long it takes to get a reply. This will give you an excellent indication of their communication and time-management skills. Both are extremely important for a good property manager.
A property manager needs to know a lot. They’re regularly asked for advice on legislation requirements, insurance policies, building requirements (especially with so many clients now buying new and off-the-plan properties), and often assist owners and tenants with budgeting. They’re also required to communicate with owners and tradespeople regarding maintenance or renovation issues affecting the property.
I don’t believe a certain number of years in the industry makes for a good property manager – some have been in the industry for 20 years and haven’t attended any training since 1990.
So, when it comes to appointing a property manager to look after your property, look for someone who has a passion for the industry, who regularly updates their skills and knowledge, and who isn’t afraid of technology or change.
Leah Calnan is the director of <a style="outline-style: none; outline-width: initial; outline-color: initial; text-decoration: underline; color: #6888b1;" href="https://www.metropm.com.au/" title="Metro Property Management homepage" target="_blank">Metro Property Management</a> in Victoria and is the chairwoman of the REIV Property Management Chapter.
 
 
 
 
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How to ensure your property is in the best hands

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The experience of a house fire is traumatic for anyone, but what happens when you are a tenant? Who do you call? What do you do?
The first point of call is usually the property manager.  But if you read the legislation there isn’t anything in there about fire, or what the process is.  It doesn’t outline the steps the property manager needs to take. Does the property form part of an owners’ corporation or is it a stand-alone house? Does the owner have insurance? If the property is inhabitable, where do you relocate the tenant to?  Who pays?
There are so many questions, so what’s the process?
Well, recently we had a fire, so I thought it would be an ideal topic.
Our situation is a unit within a development. Therefore the building insurance is taken out by the owners’ corporation.
We made the call to the corporation, and the people there advised they would notify the insurance company.
While our tenant was safe and uninjured, he was shaken up and there was some damage caused to his belongings. The fire brigade advised us the property was no longer habitable.
The next morning we inspected the damage. There was severe smoke damage throughout, a window had been blown out, the kitchen was destroyed and the carpets need replacement due to water, as did the gas ducted heating throughout.  All walls and ceilings throughout the house will need to be washed down and then repainted. All the electrical wiring will also need to be inspected. And the list goes on.
The building insurance policy will cover the rebuilding costs and provide the owner with rental assistance/income during the reconstruction. But did you know that that the carpet forms part of a landlord insurance policy and isn’t part of the building insurance policy? I bet there are lots of property managers and owners who don’t know this!
We meet with the tenant, who as you would imagine was still in a daze about the events of the past 12 hours. As he didn’t have anywhere to live, we reviewed what other properties we had available in the same area and showed him a property just around the corner. We obtained approval from that owner, we prepared all the required paperwork and done – the tenant had a new home.
We did what needed to be done. We did it quickly and with as little further stress or inconvenience to him as possible.
But what totally surprised me from the events of the past 12 hours was the seeming lack of care or interest from people at the owners’ corporation strata managers. They simply advised they would ring me on Monday and let me know what the insurance process was. They never offered once to call the tenant to see if he was OK. They never offered to assist either the tenant or us in finding another property. It was simply expected we would fix things. Someone had just lost his home, and they simply seemed to not care. It was almost like, “Well, Leah will sort things out. She will know what to do,” – but what about if I hadn’t known what to do? Where would this have left the tenant?
So the next time you are at an owners’ corporation meeting, perhaps ask your strata manager what steps they will you undertake if there is a fire at your investment property. If your property burns down or is inhabitable, what will they do to assist your tenant and property manager in this situation?
Their reply may determine if they continue to be the owners’ corporation for your property in the future.
Leah Calnan is the director of <a href="https://www.metropm.com.au/" title="Metro Property Management homepage" target="_blank">Metro Property Management</a> in Victoria and is the chairwoman of the REIV Property Management Chapter.
 
 
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Leah Calnan

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