Forum Replies Created
Hi Danni,
Expectations of property managers are completely subjective, just like your investing strategy. It's about what you want. If you're choosing a property manager keep in mind you are handing your asset to this person and they can directly impact on the decrease or increase of the property's value and condition and in turn your ability to keep a viable investment.
If you're looking to set up a business, I'm happy to share my experience with what clients preferences are. Next time just say so. Property management is an intense job and I always believe it takes a particular type of person to do it efficiently, with passion, honesty and integrity. The main point I keep hearing over and over from property investors is – good communication is the key.
If you have no experience in the real estate/property industry, don't have a sound knowledge of the legislative requirements and haven't had the experience in how legislation applies in day to day management of people's properties… I strongly recommend getting some experience with a reputable real estate agency or property management specialist before stepping into business. You will only burn your reputation and your clients otherwise.
Would you prefer a percentage charge or a flat fee? Percentage charges are the most common for a letting fee & monthly management.
If a flat fee than how much should it be? I'm not a fan of flat fees.
Would you use a fully online property management system or should it have a physical branch? This industry will always be a people-orientated industry. A physical branch to meet tenants, sign documents, discuss any arising issues with clients face to face is much better than online.
What are the most important things you look for when choosing a property manager? The ability to trust the person & the company with your asset that you've worked hard for.
Would you be happy only contacting your property manager via email or do you want a phone number or should it be in person? Nothing beats face to face contact. I regularly invite clients to inspections of their properties and take them for coffee afterwards. I'm a person after all and it builds a good relationship with clients which is paramount.
Is it better to have a system that is fully automated online for you and sends out scheduled reminders or do you like a person doing everything? A good management system is key. All real estate agencies and property management specialists have them. It leaves no room for human error i.e. forgetting to do a periodic inspection, therefore ensuring you are servicing clients properties correctly. I don't like online systems which landlords can log on and view details because it cuts out the element of real personal contact and essentially makes PM's lazy – I like calling landlords to let them know their rent is on the way or the property inspection was done and most, if not all, of my clients appreciate it also.
The new site looks fantastic! Great job.
Land tax is the one item that confuses most property investors and there are so many myths about how it works. Check the website of your state's revenue office for guidelines and FAQ's and if all else fails – call and ask.
Oh and they would know you moved out of your PPOR and are renting it out if your property manager is mega efficient they may have notified the State Revenue Office that they are the managing agents and to forward all correspondence etc etc… Then they would know. (I ask first)
dazed321,
How did you go with leasing your property? Did you find an advertiser?
I am constantly receiving emails and phone calls from these types of services boasting "No more calls!" and "Proven Lead Generation"…
Where has the personal touch gone in this world? If someone called me to arrange an appraisal at my home, I would want it to at the very least be the person I would be meeting because at the end of the day I want to ask them questions about their business before making any appointments.
What you'd be doing is paying someone to spruik something they don't believe in… and people see that. If you believe in yourself and what you do and are willing to back yourself then do some research and some cold calls to build up a database. Then put all your efforts into servicing those people and you'll eventually get referrals and build your business that way.
I work on referrals and from leads generated through general things I do like this forum, blogs, newsletters, Facebook and word of mouth. They're the best clients to work with because you don't need to sell yourself like you would turning up at an appointment someone set up for you.
If I'm looking for a lead I call. Because I'm a person (and I like a good chat) and that's what doing business is all about, trusting a person with your asset/finance/tax return/dog/cat… anything.
Go for it!
Re-painting, carpets and general updating of cupboard doors (don't need to go mirrored as they are more expensive) will all go well towards attracting a quality tenant at the higher end of the rental value.
At the end of the day your investment is only as good as the tenants that are in it – if the property is attractive you're more likely to get a quality tenant who will pay a little extra to have the comfort of new carpets and fresh paint. Whilst it may only get you an extra $10 a week as you say, it may minimize the time the property is on the market also.
I would advise against floating floors unless they are of a reasonable quality that is not easily scratched. Some of the cheaper products looks lovely and glossy at the start and then 2 years down the track the surface scratches look horrible. A nice poly blend carpet in a darker neutral colour is the best.
We have a corporate rental division here in Melbourne, my suggestion would be to go through an agent that has connections with companies or the relocation personnel that work for them. Companies avoid private landlords as they want everything to be done by the book and I've found companies to favour agents.
The media and data provided is general, not specific and is generally 3 months behind as data is collated for the previous quarter. The rental market for example can change from month to month, the sales market doesn't move as quickly but relying on 3 month old data to commentate on the property market is inaccurate.
As an agent I never look at median prices, I look at what has just sold/leased in that particular suburb or pocket and what is on the market and how long for. There are pockets around Melbourne that have remained quite steady or increased in price, and others that have dropped significantly.
There is a lot on the market and buyers have become more picky and there's no longer a sense of urgency to put in offers. The rental market is healthy but correct pricing has become more important – you can't test the market at a higher rate as some owners have looked to do in the past.
Thanks for the mention WomeninPropMelb
Agree with Jamie, it's about what suits you and what your plans are. Do you want to have an investment property? Does it suit your financial position? Or would you prefer to focus on upgrading the property you live in?
The real estate agent is no doubt a sales consultant – yes they want to sell your property and most likely have one you'd look at buying. If you want an honest rental appraisal seek out property managers and arrange appraisals. PMs are the only ones who truly know the rental market – sales consultants have an idea but I wouldn't hang my hat on their figures.
Do a little more research before making a move… first step is to look at the potential rental amount and whether the proposed special levies can be justified. Remember that if there are cosmetic upgrades to the block it can make the property more appealing to potential buyers/tenants. If you see good potential for long term CG, decent rental return and a healthy rental market then the strata levies may well be justified.
The nature of property management these days takes me all over Melbourne for clients, we can service all areas of Melbourne however I don't negotiate on fees at all for properties further away simply because I couldn't afford to effectively manage them.
We have Burwood, Hawthorn, Toorak, Springvale South. When leasing a property in the area I contact agents I know for potential tenants they have on their books. Also our research shows a majority of our tenants come from seeing the listing on the internet and it's only a small minority that actually walk into our office looking for property.
There are a few developments in Brunswick – One Lygon & Silo Apartments also. There can be a flood of the market but if you've got a good property manager to chase down tenants it won't be an issue, just a slightly longer vacancy than something established. When Viva Carlton settled they apartments were predominantly for lease rather than owner occupied and we listed & leased quite a few where other agents struggled.
With new buildings it's important for the property manager to service prospective tenants well as they have so many properties to choose from – the property manager's level of service then comes into play. If the PM can connect with them on a personal level and promote the property and present a good experience renting with that property manager, half the battle is won. It's just a bit of extra work.
Best of luck with it all!
Hi Opee,
Rental value would be between $420 and $450 per week depending on size, building facilities and car park inclusions. Brunswick vacancy is small and it's a really popular suburb. I believe the development you're looking at is on Albert Street? – it's a great pocket.
OTP purchases need to suit your investment plan, most clients that buy OTP are doing so to make larger depreciation claims on their tax returns. The days of buying off the plan and selling for profit shortly after settlement are gone due to increased building costs, large supply and the current market conditions.
I've sold one of our serviced apartments recently, if you'd like more info on how they work please feel free to contact me. As they are commercial leases the tenant is responsible for maintaining/updating the inside of the premises and the landlord is responsible for the building only which is usually under an Owners Corporation. You can get cash flow positive options in serviced apartments, but as mentioned above, it is a different kind of property with low capital gain.
As far as tribunal goes, I'm in Melbourne so can advise for Victoria only. Which state is this property in?
Why can't the tenants access the garage? If they leased the property with the car space/garage access included, yes they will be entitled to a rent reduction should access to the car space/garage not be available to them unless you are taking reasonable steps to rectify the issue which is causing the lack of access. Given that you don't know about it it seems you made a good move to change PMs.
In regards to who is liable – if you did not consent to a rent reduction, the agent must pay the difference until the tenant vacates or until the rent has increased to the same level, whichever comes first. Although, judging by your posts about your previous agent not paying you rent it looks to be a lengthy process – contact Consumer Affairs.
Arrange for your property manager to get proof from the tenant – they may just be trying their luck with a new PM (some tenants do) to see what they can get. You'll want to make sure you receive copies of anything in writing from the previous PM stating the tenant would receive a rent reduction (also for Consumer Affairs) and ask your new PM to investigate the garage access issues.
If the tenant cannot provide in writing proof of the offer of a rent reduction, it's up to your property manager to negotiate with them and investigate means to rectify the access issue. You may offer a small reduction until works are complete if works are needed – not that you need to but essentially it may avoid going to tribunal and the extra costs associated (depending what your PM charges to go).
Hi Ben,
The average return you should expect per year is 8%-10% gross on a serviced apartment under a commercial or retail lease.
This wouldn't happen to be the Sebel on Collins? I'm in contact with a few owners of serviced apartments with the Sebel where the lease expiry is coming up and a lot are trying to sell to no avail. Where the lease is about to expire I see a great opportunity to do something different – fully furnished rental with a minimum 3 month lease & utilities included (capped, the tenant pays anything over the cap). The tenant pays for professional cleaning and some owners currently have a 12% return which is more than double current average returns for unfurnished properties. It depends who owns the furnishings – the tenant or the owner, but Melbourne Corporate Rentals runs really well for low vacancy and can arrange furnishings which presents a great deduction.
As always, it depends what suits your particular needs. You've got a property that may not be saleable now, but if you've got a lease expiry coming up you do have other options outside the box to make the property more attractive to potential buyers in the future.
Hi Jenny,
If you're looking to buy in three years there will be quite a bit more stock on the market with many new developments settling. It's great you're looking at your options, however I would suggest steering clear of studio apartments unless all you're looking for is a good tax return.
The fees you've quoted are extremely high for a small studio – does the building have a pool & gym? If not, that's an exorbitant amount.
Also please be aware that agents quote a maximum gross return and also take into account a possible drop in the market when doing your figures to stick on the safe side. If you'd like me to value the property from a rental standpoint to ensure you're being quoted the correct figures, please feel free to contact me.
Agree with comments above, you need to go with what suits you but the studio you're discussing is in most books tiny – you're likely to only have low-quality tenants who can't afford better and in turn could end up with late rental payments or damage to the property. Quality properties attract quality tenants.
Hi Suzbats,
Sorry for the delay have had a long overdue holiday for a week!
St Kilda – depends on the location and proximity to the shoreline. We've got our properties already tenanted in the area but chatting to other agents its seems it's been quite difficult to lease in the area of late, which is following the Melbourne trend at the moment.
Elwood, St Kilda, St Kilda West you'll find tenants who stay in the area – much like Port Melbourne – the majority of residents will move down the road rather than to another suburb. If you're looking to buy definitely go with a 2 bedder if you can afford it. Yes, finance companies seem to buck away from 1 bedroom apartments and don't bother if it's 50sqm or under as you'll struggle to get finance.
Ideally look for something in a boutique low rise block – you want to find something with a bit of exclusivity both for rental and for re-sale value. You want a property that a tenant will look at and say 'WOW I want it, I'll pay' because rents aren't as good as they were 12 months ago. Some St Kilda road properties (apartments in high rise buildings) I've been watching have had the agents offering periods of free rent, movie tickets and all manner of incentives to prospective tenants. So as I say, go for exclusivity – something different or with wow factor.
It's a buyer's market, however I rarely (if ever) see cash flow positive properties in these areas unless you put in some serious TLC to an older property for very little cost or find a 'fire sale' – something the vendor is desperate to sell for under market value.
Don't get me wrong, apartments make up a majority of our management portfolio and they can be great investments – if the location is right and owners take advantage of depreciation claims where they have bought OTP.
Some of the best yields I've seen of late have been for apartments.
Good to hear it's now sorted out.
Get yourself an experienced property manager from day dot to avoid these dramas – now they're out it's best to take it as a push to employ someone to ensure this doesn't happen in the future.
There are endless stories like this one where things go pear shaped because an owner is not 100% on the laws and legislation in place and the tenants are well aware of their rights and play on that.
It might be cheap but is it an attractive proposition for tenants? Will you have a good quality tenant? Will you be able to lease it? how much for? (note: Sunshine rental market is not suited to apartments)
Is the outlook for Sunshine suitable for apartments? Will you have a decent re-sale value?
Whilst the initial cost is cheap – your tenants will be too.
