We’re here to help our clients navigate what should be an exciting process! Your investment property is one of the biggest investments you’ll make in your life, after all. We want to help you avoid common mistakes made by landlords, like poor record-keeping, choosing unsuitable tenants, failing to keep on top of property maintenance or signing with a property agent unsuited to your needs.
A good property manager will ensure you understand your rights and obligations before leasing out your property, help you comply with relevant state legislation and maximise the wealth you can achieve from your investment property through professional, reliable advice.
The Dynamic Residential team has decades of experience guiding homeowners and landlords through the Melbourne real estate maze. We specialise in property management — just property management, not real estate sales — meaning we dedicate all of our professional expertise and knowledge solely to professionally and successfully leasing and managing your properties.
We’re a family-owned company dedicated to meeting the individual needs of our clients. That’s why we’ve taken the time to put together this definitive guide to managing your Melbourne rental property and understanding the benefits of having a rental property manager in your court. We want you to be equipped with all the information you need to find the right property management firm for you and to have a stress-free property management experience while achieving the wealth you’ve always dreamed of. This guide is designed to be kept on hand while finding the right property manager for you and giving you confidence in your final decision.
Please note, this guide is just that — a guide. It’s not meant to replace independent, professional advice, and we cannot be held liable for any losses you experience as a result of following the advice listed. Please seek professional advice before implementing any of the strategies suggested here.
Buying property as a means of investment is still booming. The lure of bricks and mortar remains attractive to first-time investors, retired investors looking to diversify their portfolios and seasoned investors looking to increase their passive income streams.
Your investment property is bound to be one of the biggest investment of your lifetime! To achieve the best return on investment, you may find it helpful to hire professionals like the property management team at Dynamic Residential who will have your back every step of the way.
Managing your investment properties on your own can be a tough, time-consuming job. The right rental property management team can make leasing, manage and sell your rental property a breeze and take the pressure off your shoulders. By partnering with an accomplished property management firm early on, you’ll be able to make well-informed decisions to maximise your return on investment.
When considering hiring a property management team, you might find it helpful to ask yourself the following questions:
- How much do I know about legislation and legal requirements involved with leasing?
- Do I know which agencies and processes to turn to if something goes wrong?
- How much time do I have to manage my rental property?
- How much time do I have to build relationships with my tenants?
- How much knowledge do I have of the real estate market?
- Do I know when to change the amount of rent I’m charging?
- Do I have the ability to make objective decisions about my property?
- Do I have the necessary negotiation skills to make my property a success?
Property management agents generally have years of experience that can give you an advantage over other landlords and maximise the return on investment you can achieve from your property.
● Save time
Managing a property can be incredibly time-consuming. Your investment property will require regular availability to deal with situations like maintenance work, inspections, and tenant communications. These can be costly and difficult to fit into your plans, especially if you travel often, have a busy family life or have a hectic work schedule.
A competent property manager can take the pressure off your shoulders and will take care of all the little tasks that would otherwise take hours out of your week — think things like scheduling and conducting inspections, collecting rent, organising maintenance, organising a lease, compiling notices, reminders and legal applications. This will save you valuable time to focus on the things that are important to you!
● Professional support when things go wrong
Sometimes there’s no avoiding it — things do go wrong with properties, whether it’s a tenant paying their rent late, the house getting damaged, issues with bond money or an unexpected maintenance issue cropping up. These difficult circumstances can be handled professionally by a property manager, saving you the stress of difficult negotiations, potentially blowing conflicts into more significant problems. Property managers have years of experience negotiating with a huge variety of clients and will ensure you end up with the best solution to solve the issue.
● Professional inspections
A key priority as a property investor is making sure your property is well-cared for. A professional property manager will ensure your property is kept in perfect condition to maximise your asset’s value.
As with every state, in Victoria, there are rules regarding the number of times you can have your rental property inspected per year and how the inspection process should be conducted. As a general rule, an inspection should occur three months after initial occupancy, then every six to twelve months thereafter. There are strict processes regarding communications and notifications of inspections and the correct entry process. Keeping thorough inspections, records and photographs are strongly recommended for your protection. The best property managers understand all necessary legislative requirements regarding inspections and will keep the correct records for you.
● Immaculate house presentation
If your property is kept in great shape by a dedicated rental property manager, your property will always be presented in the best possible light. Keeping your property in shape will also mean you’ll save on maintenance costs over time, as you won’t have any unexpected, huge maintenance jobs caused by neglect. Keeping up an immaculate house presentation will also make your house more appealing to prospective tenants, and you’ll end up with the best market rates available!
● Repairs and maintenance handled for you.
Repairs and maintenance need to be handled in a timely, professional manner for your tenants, with an understanding of their rights to have maintenance attended to. This can require comprehensive knowledge of state legislation, outlining which aspects of maintenance are urgent and therefore should be attended to immediately — for example, clients have the right to hot water and operating toilets. If these are not fixed immediately, the client has the right to order repairs, pay for them and be compensated by the landlord.
Having a property manager attend to maintenance will mean any urgent issues can be taken care of with minimal stress for you. A rental property manager will also have a fantastic list of high-quality tradespeople they can book for your property, saving you time and money through the best work possible. These solid relationships with tradespeople will end up saving you thousands over the life of your investment property.
Maintenance is a huge area of responsibility for landlords and will affect tenant relationships along with profitability. It’s necessary to be proactive, to ensure little problems don’t grow over time — for example, a small task like a gutter checks can prevent you from shouldering the cost of water overflowing and causing water damage to other areas of your roof and house. A great property manager will stay on top of all of these aspects of your home and keep comprehensive records of checks done to keep your property well-maintained.
● Keeping up to date with legal requirements
In Victoria, there are numerous legislative structures in place to protect both tenant and landlord.
As a landlord, it’s crucial you’re up to speed relevant Acts and legislation, or that you hire an experienced property management professional to help you.
To successfully lease your property out to tenants, you’ll need access to standard agreements and documents, such as lease agreements and bond lodgement forms.
Having accurate records and legislation knowledge becomes especially important if a dispute arises, whether it’s due to tenant conflict or conflict with other bodies, such as Councils. Suppose a dispute arises involving rental payment, lease conditions, or bond claims. In that case, your case may end up in a tribunal. The judge will consider whether the landlord has taken the appropriate steps and can provide the appropriate records as evidence that this has occurred. This is where having a property manager supporting you will make all the difference, and potentially you save you thousands— and protect your reputation as a landlord.
There’s a huge list of legislation you’ll need to be aware of when making decisions related to your property — whether you want to evict a tenant, build a new structure in your backyard or know when to replace your smoke alarms to comply with the law. Having a property manager available to help with your questions will reduce the amount of time you have to spend researching and ensure you’re getting knowledge based on years of industry experience!
● Leasing your property
Your property will become vacant from time to time, and you’ll need to find a new tenant. A good property manager can help you to find a suitable tenant — hopefully, someone who will care for your property and pay their rent on time!
A property manager can streamline the process of finding the right tenant for you. There’s more involved in finding a tenant than you’d think—from advertising the property, fielding enquiries and screening applications. A good property manager will create competition for your property through effective property presentation and advertising, develop a marketing plan, determine your ideal tenant, and write effective advertisements.
Ideally, your property manager will advertise through Australia’s respected real estate sites www.domain.com.au and www.realestate.com.au. Your property manager will understand the keys to the perfect advertisement, like including the location of your property, any important facilities nearby such as schools and transport, the features and benefits of your property, beautifully presented photographs and any unique details that set your property apart.
Your property manager will then go on to handle the screening part of the process, taking responsibility for conducting background and financial checks. A thorough screening process is incredibly important to ensure your property will be protected over time, and ensure there are no conflicts after installing a difficult tenant—tenants can be difficult to evict due to all the necessary legal steps involved.
A good property manager will be equipped with a list of questions to ask prospective tenants and well-practised in double-checking statements made by prospective tenants. After receiving applications, the property manager should interview prospective tenants by phone and in person. Important factors that may influence your choice of tenant will include why they left their last rental, whether they have pets, when they want to move in, whether they’ll live alone, what they do for work, how much they earn and what references can they provide.
If you’ve found the right tenant for you, make sure you and your property manager don’t delay in finalising the lease! Your property manager will organise any bond and deposit monies, and explain features of the property your tenant may need to be aware of, and conduct an ingoing property inspection to ensure your property will be well looked-after.
● Rental appraisal and rent increases
A good property manager will keep up to date with what is happening in your property investment area. They’ll keep an eye on the market, and be able to suggest rent increases in accordance with the terms of the lease and the relevant legislation in your state.
One of the most important tasks for a property manager is determining an adequate amount of rent for your property independently. The amount of rent coming in can have significant impacts on the long-term profitability of your property. Great rental property manager should have an excellent knowledge of what rent your property can achieve from their years of experience managing properties in similar areas. They’ll be able to judge the right amount based on market fluctuations, location and different property type, and they’ll know how to balance the correct amount with maximising your tenancy rates to ensure low tenant changeover and lower vacancy periods. The best property managers will be able to obtain thousands of dollars a year more for your property in rent than the average agent.
● Simplified tax and record-keeping
Keeping track of tenant communication, legal document, council fees, relevant applications, tax records, and financial records related to your property can be a nightmare. Chasing up payments for rent and bills can be a drain on your time. A property manager will take care of all this paperwork for you, and provide you monthly and annual statements for your tax and personal records. You’ll also receive an End of Financial Year statement from your property manager detailing all property-related revenue and expenses.
● Remove the emotion
The best property managers will help take the emotion out of your investment property and achieve your income stream goals without the stress. Aside from all the paperwork and legal considerations, your property manager will also act as a mediator and become responsible for having the necessary awkward conversations with tenants that might arise when their behaviour obviously isn’t benefiting the property or your investment — for example, when their cleaning is not up to scratch. Hopefully, they will have invested in creating strong relationships with your tenants to make these conversations a lot easier!
● Wealth creation
The best property managers should be able to advise you rental increases according to market changes, and advise you on renovations that could increase the value of your property and allow you to achieve a rent increase in the future. They should also be able to speak with you about your five or 10-year property plan, and perhaps recommend tax depreciation schedules, or put you in touch with mortgage brokers.
● Strong tenant relationships
The best property managers will not only look after the practical aspects of your investment property, but they’ll also look after your tenants by putting time into building solid relationships with your tenants, which will contribute to them being more likely to look after your property.
● Save on costs
Investing in a property manager may initially seem to be a big investment, but it’s an investment that will pay off over time due to all the benefits we list here!
Any costs incurred from hiring a professional property manager will be offset by additional wealth a good manager will be able to achieve for you — think rent increases, affordable repair and maintenance deals, and saving your time so you can focus on your other sources of income!
You’ve put in hours upon hours of research to buy your investment property—don’t throw away all your hard work by hiring a property management firm unsuited to your needs!
Choosing an agency whose core focus is property management over real estate sales means you’ll have more resources dedicated to making your property a success. Choosing a smaller, family-owned company will mean you receive a service tailored to your needs, over the impersonal service you’d receive from a larger franchise. You’ll get to build relationships with the same staff, enjoy more flexibility in your service, and know that they’ll be there when you need them.
To find the right property management agent for you, you’ll need to do your research and shop around until you find one you’re completely comfortable with. For a successful return on investment you’ll be looking for a long-term professional relationship, so don’t rush in and sign with the first agent you speak to. When speaking to different property management firms, consider whether you think you’ll have a good long-term relationship with them in the years ahead.
The right property manager will help you to achieve the best possible value from your property! If you can find the right property manager, keep them! The right property manager is worth their weight in gold.
To help you through this process, we’ve included some important don’ts for you to keep in mind as you go. We’ve also included a list of helpful questions you can use to interview each of your prospective property management firms to ensure they’ve got your best interests at heart.
While searching for your property management agent, keep in mind the following don’ts!
- If you’re uneasy with advice you’re receiving from an agent, don’t hesitate to ask more questions and don’t feel pressured into signing a contract with them.
- Don’t be afraid to get second and third opinions.
- Don’t feel obliged to sign with the agency that just sold you the property — there’s no requirement for you to do so
- Don’t sign anything until you’ve found an agent you’re completely happy with
- Don’t be tempted to go with an agent simply because they’re the cheapest or charging the lowest commission — it will likely cost you more in the long run because of poorer decisions made due to their inexperience!
- Don’t hesitate to ask for a management agent who has a proven record and history of delivering on promises for clients.