Find the Key to Rental Success

May 22, 2013

In light of recent events in Christchurch we are seeing an unprecedented demand for rental properties.  When considering whether to purchase an investment property or using the family home as a rental property, is a big decision and needs to be treated as a business. Although this is not a risk free investment, with professional management of the property, the risks can be significantly reduced.

Choosing an experienced company to manage your investment is important, as is developing a good working relationship with your assigned Property Manager. 

There are two different ways a property management company is run:

One is task based where several different people within the company manage aspects of your property. For example, one person shows your property and chooses a tenant.  Another person does all regular property inspections and any rent arrears are taken care of by another staff member.   This can be quite confusing for a property owner who is unsure of whom to deal with and no one person has a complete picture of your property.

At First Avenue we believe that portfolio based property management is the most advantageous for a property owner.  Your rental property is managed by a Property Manager who oversees the day to day running of your property.  He/she will have a good knowledge of the property, the owner and tenant.   A Property Manager under this regime can effectively manage approximately 150 properties.

Given that the property management industry is not regulated, unlike the real estate sector, it is up to individual companies to undertake staff training and maintain standards. Property management is constantly changing and keeping up with market trends and legislation is vital to the success of your investment.

The overall function of a Property Manager is to act as an interface between the owner and tenant.  Primarily the property owner's wishes come first. However there is a duty of care towards the tenant.  It should come as no surprise that if a house is well maintained,  the tenant is happy, they tend to pay their rent on time, look after the property and stay longer.  Another important role has been added in recent times and this is do with co-ordination of EQC and insurance visits to the property along with organising repairs to damaged properties.

A typical day can be quite varied for a property manager.  Showing vacant properties and interviewing potential tenants is the first critical step to a successful tenancy.  Because your Property Manager knows the property and owner they will do their very best to match up the tenant to the property, neighbourhood and owner's wishes.

Each company has its own Tenancy Agreement which will be read through with the successful tenants.  This is the time for a Property Manager to spend some time with new tenants, making sure they understand their obligations.

Another important aspect of property management is regular property inspection. Insurance companies require inspections to be done to keep the policy valid.  This is an opportunity to visit the property, check on its condition and see if any preventative maintenance is needed. 

When a tenant gives notice to leave another wheel goes into motion.  A bond inspection needs to be completed.  Fortunately the majority of tenants leave a property in a clean and tidy condition.  However if they don't, a  Property Manager has a lot of work to do.  Getting the property ready for a new tenant as quickly as possible is the goal since every day not rented is loss of revenue to the owner.

If there are any disputes with the tenant, eg, rent arrears, damage to the property that cannot be resolved by negotiation, will need to be resolved in a Tenancy Tribunal.  This can be a daunting process.    Evidence needs to be collated, paperwork prepared and presented to the Tribunal in a format that the Tribunal finds easy to read and which adheres to tenancy law.                   

Property investment, particularly over the long term, can be a profitable undertaking, but like most other enterprises, it requires a spectrum of skills and expertise from trusted advisors. 

Your choice of property manager is as important as your choice of property.

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Filed under Real Estate \ Rental market updates

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