Choose the right person to manage your rental property
For those looking for an opportunity to enter the property investment market, now might be a good time. Australia’s national rental vacancy rate sits at a low 2.2% and has been stable over the past 12 months.
“It’s a very tight market,” says Real Estate Institute of Australia chief executive Amanda Lynch. “It’s difficult to get rental accommodation, and as a result landlords can choose the best tenants.”
Additionally, rental yields are rising across most capital cities, particularly for units.
That’s good news for current and potential property investors. Nevertheless, investing in property is not always a smooth ride. A good rental property agent can be the deciding factor in success or failure in the property investing game. For investors considering managing their own property, Lynch offers a word of caution.
“Property management can be a much bigger job than people realise,” she says. “The main reason you would use a rental agent is for peace of mind. It can mean phone calls at all times of the day and night, having to get quotes yourself for any maintenance required or dealing with unpaid rent.”
But how do you choose the best possible rental agent, and what is the difference between a good and bad agent?
Over the past 20 years, Andrew Jones and his family have entrusted eight investment properties into the hands of property managers. Not all of them have been successful relationships.
In one recent incident, the tenants in the family’s Lake Macquarie, NSW property fell behind on their rent for several months and were evicted. It was only following the eviction that the family discovered the tenants had kept several birds and rabbits in the house, causing damages totalling $15,000.
“If the agent had carried out regular inspections on the property – as they had told us they had – the pet issue would have been noted and addressed well before we received the bill,” Jones says. “Having learnt from this, I would strongly recommend maintaining a good relationship with your agent and don’t be afraid or embarrassed to seek feedback on your property on a regular basis.”
High on Jones’s checklist of what makes a good rental agent are attributes such as professionalism, experience and proactivity. Local knowledge is also important, he says. “‘Out of towners’ or ‘rookies’ can’t always give you the accurate feedback or service you require to maximise the return on your investment.”
Jones recommends property investors just starting out do their own research on their chosen area and ask prospective rental agents for appraisals. “Choose the agent you think best suits your location, the size and type of property you own and don’t always go with the agent that tells you the highest rental amount they can achieve. If your property is overpriced you may end up spending four weeks longer looking for a tenant, only to find you have to drop the price anyway.”
Rob Farmer, CEO of rental specialist agency RUN Property, reels off five key attributes of a good rental agent: people person, good negotiator, calm under pressure, eye for detail, and an understanding of property investment.
“Real estate agencies are often owned by real estate salespeople, who are good salespeople but they don’t have the operational management and attention to detail required in property management,” Farmer says.
He recommends investors ask friends and family to recommend agents and interviewing all prospective property managers. “Also interview the manager of the property management division,” he adds. “It is just as important to have a good property management company as well as a good manager. If your property manager leaves or you have a problem you need to know you have a quality company standing behind them.”
Mary Anne Cronin, an agent with Raine & Horne Bondi Junction, says choosing the best possible tenant is an important measure of a good rental agent. “We interview all our prospective tenants,” she says.
“If you’re dealing with properties with a rental average of $1,000 to $1,500 per week, as we are, it’s essential to ensure the tenants are the right match for the property.
“It’s about matching the right people to the property and that they are going to appreciate it. So if the property has a garden, you have to make sure the tenant will appreciate and look after it.”
