Since the economy tanked and people lost heavily on stocks and shares, the trend now is to invest in real estate. People would rather put money into owning and renting out properties than risk it all again in a global economy where the smallest instability could mean huge losses. Australia has stood-out in this trend, with some of the big property websites recording a 16% rise in the number of people who are buying houses since the economy tumbled a few years ago. This is a good indicator that the economy is recovering and people are able to save enough just a few years later to afford secondary properties. It is also a sign that people are beginning to understand investment better. They may have some money tied up in stocks and bonds, but they take time to invest in a more solid asset.
The problem, though, is what they do with these secondary homes after they buy them. Most of them expect to get additional income in the form of rental income as they wait for the market to be good enough for them to sell at a profit. But what they don’t anticipate is how much they will be needing a property manager and managing your own property is harder than most people think.
Property managers are firms (or individuals) who, for a fee, take the business of managing your property from you. The increase in real estate transactions in Australia has also created more property managers, but not every owner is using these managers. That is why it becomes necessary to discuss exactly why you should hire these people. What can they do for you?
1. They have the necessary expertise in finance and marketing
The time to hire a property manager is not after you have bought a property but before. They are trained to identify good properties and to make projections on whether the properties will be profitable in the future or not. This means that they can save you from making a costly mistake. To you, it may not be very obvious that while some areas look like good investments now, they may be worthless in the future. If an area is not in the plan for infrastructure expansion, it will not attract more business, which means that before long, people will leave to go where business is. A layman would go in without this information and scoop up a house, but what they don’t know is that they will struggle to sell it just a few years later.
2. They can help you save on renovations
Unless a property is brand new (and usually too expensive for most people), you will have to do some renovations and repairs before you can get tenants in. This can be hard to do if you don’t know anyone in the market, and you may end up paying too much for renovations that are not very good. Property managers, on the other hand, know where to find quality contractors who charge fairly, and they can pass on these contacts to you to if you hire them early enough in the process.
3. Finding and keeping tenants
Tenants are harder to find and keep than most people think. It takes a while to find the right tenant, to vet them and to make sure that you keep them happy enough for them to want to stay. It also takes quite some commitment to make sure that the house doesn’t remain vacant for long periods as you look for a tenant. These are the primary things that a property manager will do for you; they know where to find tenants and how to find them fast. They also know how to vet them and then how to make sure that they are satisfied with their tenancy so that they can stay for many years.
To emphasize a little on vetting, it is very important that you vet tenants properly. They could have criminal backgrounds or they may have had problems paying rent in the past. Some are known to destroy properties that they rent. Property managers are able to access the relevant databases where this kind of information is stored and they will weed out bad tenants for you.
4. They do all the financial and legal work
If you are using property managers, you never have to go to your property to get your rent and they do that for you. They also take care of any legal issues that may arise, as well as any financial and taxation issues that need to be dealt with. If you have a regular job, trying to do these things yourself can be a headache.
5. Property maintenance
Your property falls to disrepair from time to time, either through the tenant of just over time. Your property manager has the responsibility of inspecting your property every few months to determine if there are any repairs to be made. If there are, it is their job to find the right vendors and the right kind of materials and then supervise the repairs. Depending on your agreement, they may take the costs of the repairs from your rental income or they can pass them directly to you.
Just a little more on property inspection: this must always be done thoroughly, but with minimal disturbance to tenants. The property manager should then give you a written report accompanied by photos of different areas of the property. Inspection also involves checking the outside of the structure; they must check the condition of the driveway, the fences the garden and so on.
In addition to that, they must check if there is any pest damage. Termites can wreak havoc within a short time if they are not discovered and eliminated. There are several kinds of beetles that can do the same. Property managers are trained to look for this kind of thing. Real estate managers have the necessary expertise to help you get more from your property than you are getting now. Find one in your area online and let them take over the responsibility of making sure that your property continues to bring you money.