SOCO REALTY shares the dangers for private investors

by Administrator 29. September 2015 07:12

One of the most important decisions a landlord will make is whether to manage their rental property themselves or enlist the services of a professional property manager.

While DIY property management may sound easy enough, it can actually be quite complex and there are potential traps.

One of the biggest issues facing landlords is the legal implications as risk management is now an important part of property management. If you’re going to do it yourself, you’ll need to have a thorough understanding of the tenancy legislation and paper work required.

There are also many day-to-day problems that can arise. Common issues that may need to be dealt with are tenants failing to mow the lawn and maintain the gardens, having pets without approval and getting behind in the rent.

As many landlords often develop a personal connection with their tenant, they may feel uncomfortable chasing arrears. Property managers, on the other hand, are removed from the emotions.

If you are considering managing your own rental property, it’s important to be aware of the pitfalls.

Here are five traps to avoid:

Failing to ask for a bond

This is a security deposit which is held in case the tenant doesn’t meet their obligations under the tenancy agreement, such as causing damage to the property or failing to pay the rent by the vacate date.

Not having a lease

This is a legally enforceable contract which usually spells out the length of the rental agreement, the amount of rent that will be paid, and the condition the property must be returned in.

Not filling out a condition report

This document describes the standard of repair for the premises and any items included within the premises, such as furniture. It is designed to protect the interests of both parties and is now compulsory

Not understanding tenancy laws

Property management can be very complex and if landlords don’t comply with the legislation it can lead to fines. There are different Acts legislating tenancies in each state and territory.

Inspecting without correct notice

The tenancy laws in each state stipulate how often inspections can be done and how much notice must be given to tenants. Failing to issue correct notice can be costly penalties apply.

One of the biggest advantages of enlisting a property manager to look after your rental home is peace of mind. They take the hassle out of every step of the process from finding a tenant to collecting the rent, and attending maintenance issues to conducting routine inspections.

Although there is a cost involved in using an expert, you are paying for a professional service and the fee is tax deductible.

A property manager can also advise you on how to present your property to attract quality tenants and get the best rental return. Even if supply is tight and tenants can be quite choosy – they’re more prepared and starting their search for rental properties earlier.

So when it comes to property management, think carefully before you decide to go it alone.

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Cheap vs Value for Money

by Administrator 20. September 2015 06:53

Things to consider when choosing an agency to manage your property

Too often when I am asked for more details on our property management services, I am initially asked for our fee schedule. Yes this is definitely an important thing to check….but is it the MOST important thing to consider when choosing an agency ?? definitely not.

Cheap vs Best Value for Money ?

A cheap agency is one that has cheap fees but also cuts corners as a result, they may use limited resources, they may also pay staff little which means they are more likely to have staff change overs. An agency that is best value for money, knows what their profit margin is, pay their staff well, invest in training and the best resources necessary and prices their fees accordingly. In most cases they will offer you the same marketing and service as a more expensive agency but are more realistic.

Did you know that when you are trying to negotiate your fees with an agency from 9.35% down to  8.8% you are trying to save yourself a measly $3.00 per week !! (don’t forget that this is also tax deductible !) Property Management fees have been the same for probably more than 20 years yet costs have gone up (and yes rents have too I hear a lot of you say !)

What is important ?

  1. How is the department set up ? Is the agency set up with pods, so one person deals with maintenance, one person deals with leasing, one person does routine inspections, one person deals with tenants etc. OR are you given a property manager who manages the entirety of the property from viewings to final bonds ? OR a bit of both ?? It is important for you to be clear as to how this works so that you can consider the pro’s and con’s of each communication method

  2. Where will your property be advertised ? realestate.com makes up approximately 60% of our tenant enquiries therefore I suggest that this website is really important to be on. Other websites such as domain.com.au and reiwa.com.au are also important for our industry.

  3. How are property managers monitored ? Who is the person in the office responsible for keeping an eye on the person looking after your property ? How are staff motivated to do a good job etc. It is a good question to ask ! You also need to know that there is a person within the company that is easily contactable should a problem arise

  4. What is the agency doing to reduce vacancy rates in this tough market ? Find out what the process and marketing plan is to minimise any lengthy delays with renting out your home.\

  5. Ask to look at the agency’s paperwork. Particularly a copy of the property condition report, routine inspection report and end of month statement. Make sure you are happy with the detail of these reports. Every agency’s will be slightly different.

Hopefully these little tips will give you a few ideas of questions to ask when meeting with an agency to do a rental appraisal and I hope to be able to answer all these questions for you when I meet with you.  Feel free to contact me any time on 0416 352 679 or ashleigh@socorealty.com.au


What changes do we expect to see in the next 5 years ?

by Administrator 3. September 2015 22:49

I am so excited about the changes ahead ! Have you noticed how much the world is changing with everything becoming online and cloud based? Just drop in to your local bank or Coles and you will see that there is an increase of self service machines and less staff….SO…can this be replicated within a real estate office ?? Yes I think it can ! but maybe not to the same extent.

We have already seen new online systems for tenants to  book their own viewings for rental properties and there are a few programs that offer this and have been a real time saver for us property managers. At SOCO Realty we use a great one called Inspect Real Estate.

We are also in the process of implementing a maintenance manager program which is going to enable our property managers to manage and follow up maintenance in one system which is really going to be a benefit for our landlords and tenants and we are really excited about this.

I also received an email today from a company called Real Estate Virtual Assistants….I know that personally I am not ready to go this far with the “whole online thing” just yet….but maybe in 5 years I will !

At present, SOCO Realty is just happy to implement a few of these online system to ensure our property managers work as efficiently as they can with out sacrificing our personal customer service that we are proud to offer our clients.

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