Why Engage a Professional Property Manager?

You've searched the highs and lows of the property market, found the perfect investment property and are ready to reap the benefits of a new tenancy and commence bringing in a regular return on your investment.

So, now what?

In today’s competitive rental market, effective property management is essential. It plays a critical role in reducing vacancy rates, minimising risk and unnecessary costs, boosting your property’s value and ensuring your income remains steady. 

While some landlords choose to go DIY with their property management, the vast majority in Australia engage the assistance of a professional property manager. Here at Shead Property, our team of specialists work closely with investors to take the heavy lifting out of property management so they can focus on growing their portfolio. This article provides a glimpse into what it takes to efficiently and effectively manage a rental property. Once you see all that it entails, you will wonder why anyone would ever dream of selecting the DIY property management option, especially when there is so much at stake.

What does effective property management entail?

Effective property management requires exceptional organisation, proactive planning, knowledge of current property management legislation and regular communication with tenants to maximise profitability, protect the asset, and minimise risk and costs. Below are the most essential property management practices to ensure short and long-term profitability, legislative compliance and quality, satisfied tenants.

1. Effective tenant screening
   A thorough tenant screening can be the difference between a long, lucrative tenancy and a year of headaches. Every prospective tenant’s rental history, employment status and credit rating must be thoroughly examined to confirm they can meet the obligations of the lease agreement. Speaking of lease agreements, these need to be drafted clearly in a way that plainly outlines the rights and responsibilities of both parties under current local legislative laws. If you’re self-managing, a real estate solicitor can help confirm that your agreement aligns with local laws. However, if you choose to engage a professional property manager, all of this is done for you for a watertight contract and peace of mind.​​​​​
2. Regular communication
   Effective communication with tenants is vital to ensure they understand their obligations and to protect your asset. Enquiries and maintenance and repair requests must be responded to promptly and, if a tenant falls into arears, rent reminders and follow-ups are critical. Communication is also about building trust, so it is important to be transparent about inspections or any upcoming changes. A professional property manager will engage with your tenants through regular updates or small gestures, such as newsletters or holiday cards. This can help create a positive relationship, making tenants more likely to renew their leases.
3. Routine inspections and maintenance
   Regular property inspections not only help identify any potential issues before they become expensive repairs, but they’re also instrumental in preserving the value of your property. Scheduling maintenance tasks like landscaping and leaf cleanup in accordance with the seasons is another great way to be proactive and prevent problems from escalating into hazards. A professional property management team has access to a network of reliable contractors, saving you time and money in the long run. Your property manager also knows what to look for when conducting routine inspections and the action to take when issues are identified.
4. Financial planning and reporting
   Along with keeping accurate records of all income and expenses, having a detailed budget in place that covers maintenance, taxes and insurance can go a long way. This will also encourage you to pay your contractors or other vendors promptly and keep those good relationships intact if you are self-managing your investment property. Don’t be afraid to lean on the many tools available to help you effectively manage your finances as a landlord, such as property management software with automatic rent collection and maintenance ticketing systems. These benefit your tenants, too. However, if you have your property professionally managed, the only financial planning you would need to be concerned with is your own budgets to cover regular and incidental costs. 
5. Dispute resolution
   While tenant screening is a key ingredient of a harmonious and lucrative tenancy, disputes can still arise at any point. Having a clear conflict resolution process in place will help prevent escalation. However, if the situation does escalate, the issue may need to be taken to the NSW Civil and Administrative Tribunal (NCAT) for independent assessment and a legally binding resolution. The risk of escalation is significantly reduced in properties that are professionally managed because a professional property management team will have systems and processes in place that enable them to address and resolve issues early.
6. Listing, pricing, advertising and open homes 
   Should you decide not to renew a lease, or your tenant gives notice to vacate, your property will need to be advertised in a way that attracts the right target market. When this happens, the rental price will also need to be re-examined and potentially adjusted to ensure it is in line with the current marketplace and open homes for inspection by potential new tenants must be organised. Once again, a professional property management team will handle all of this for you.

The significant cost and risk associated with self-management

Having now read through the list above, you might feel somewhat overwhelmed by the level of responsibility, organisation and time that goes into effective property management. There is a lot to do! Even more importantly, there is considerable risk and cost associated with ineffective self-management. For example, imagine if you failed to identify a safety risk in your rental property and your tenant suffered an injury as a result. This could have legal ramifications. It simply isn’t worth the risk.

At Shead, our dedicated team of experienced property managers are agile, responsive, efficient and genuinely care about your success and prosperity, whether you own one investment property or a portfolio of properties. We are invested in your long-term growth and strive to build an advisory relationship with every landlord to ensure maximum return and minimal risk and cost on every investment. Learn more about our property management services or contact us on 02 8448 1200 to speak to one of our dedicated property managers.