HiRUM Software Solutions

Onsite Property Management Tips To Help Keep Your Letting Pool

Posted by HiRUM Software Solutions - 25/03/2014

As an ex-property manager in a real estate business, I am only too aware that real estate agents see the managements in your letting pool as fair game when it comes to increasing their own business.  Understandably, external agents will target any property they can to increase the value of their rent roll…..after all, it is business. In this blog post we’ll look at onsite property management tips to help maintain your letting pool.

Property managers and business development officers in an agency use various methods to target properties under management in their area, trying to bring the management across to the agency.  Seeing a property for rent is a red flag to the agency, and the perfect opportunity to get in touch with the owner and sway them into a change of management.

Likewise, when a property is placed on the market, external sales agents pose a risk to your letting pool. Sales agents are often paid a commission for any rentals they can bring to the agency’s rent roll, so naturally if they are able to sell to an investor and secure the property as a rental for the agency, there is a financial benefit to them.  There is also the possibility that the property will be sold to an owner occupier.  Same end result- you lose the property from your rent roll.

As a resident unit manager, however, you have invested heavily in your management rights, and any reduction in your letting pool will have a direct impact on the value of your business, and on your income.  It is up to you to ensure that you do your very best to hold onto your existing managements, and seize any opportunity to increase the letting pool that you can.

Onsite Property management for rent free digital photos by Stuart Miles

In my experience onsite property management comes under greatest risk when their are problems with the tenancy. With smaller numbers of properties under management, quite often the onsite manager is less experienced than the external property manager in dealing with these difficult issues. A tenant in arrears, a tenant who is mistreating the property or a long standing vacancy that you are unable to fill, are all typical scenarios that  pave the way for an external agent to step in.

If the owner of a property senses that you are unsure of how to treat a situation, they are quite likely to ring the local agencies for advice, and this gives the external agent the foot in the door that they need.

So, what are the best ways to make sure you keep your managements in your letting pool?

  • Build Relationships

You are in the perfect position to build strong relationships with both your owners and tenants.  The most common complaints I heard about property managers in an agency, were lack of communication from the agent and high staff turnover leading to inconsistency, poor efficiency and ultimately frustration for the owner.

Communicate with owners often – the good stuff and the bad stuff.  Make sure the owner is fully informed but never leave them wondering what you will do about a situation. If the tenant is in arrears, let the owner know, tell them what you have done about it, and let them know what the next step will be if it isn’t remedied. Let them know that you are in control of the situation and that they don’t need to worry needlessly – you know what you are doing.

Likewise build a relationship with your tenants, while at the same time, doing things “by the book”.  Look after the good ones and move the bad ones on!

Communicate in writing.  Good documentation is the key when it comes to success in QCAT.  Even if owners  and tenants prefer to talk with you directly, always follow up with an email which documents the main points discussed.

  • Follow the rules

Make sure that you follow the legislation to the letter when you are dealing with your managements.  Make sure your paperwork is perfectly in order and all notices delivered as per the legislative requirements.  Irrespective of whether you feel you have a good relationship with the tenants and can work on an honour system, you need to have all of that paperwork in place, in case the tenancy goes pear-shaped. The legislation is there to protect the owner, the tenant and you, but if you don’t adhere to the requirements, it cannot help you.

  • Get help

If you are unsure of how to deal with a particular situation, call on the experts.  Ring the RTA, the Department of Fair Trading or the REIQ and get professional advice.  No question is silly and it can save you a lot of money in losses.

  • Blow your own trumpet

Make sure your owners know what you are doing for them.  When you let a property in the complex quickly, to a good tenant at a good price, let all the owners know.  Make sure that they understand that you are working for them.  Help them see your value.

  • Learn how to sell

Sell yourself, as an onsite property manager.  When the external agencies come knocking, remember –

You WILL do a better job, because;

  • you are on- the spot
  • you are privy to what’s going on;
  • you are focussed on their property, not 100’s of others as well
  • you do have a vested interest in the complex – this is your livelihood and you have invested heavily in its success
  • you care about keeping the building/ complex well maintained
  • you personally care about the calibre of tenants that you rent to as you live there too
  • you ARE professional
  • you do have the knowledge you need to deal with all the tricky situations which may arise
  • You will help the owner maximise their return and keep them in the loop always

    Learn how to sell your properties
    ,
    and get your selling agent’s certificate
    You can’t ensure you only sell to investors, but you certainly can make sure you incorporate targeted marketing to investor groups etc, to give yourself the best chance.  At the very least, you should align yourself with some agents to suggest to your owners who won’t  poach your rental properties for their own agency.
  • Do your job

The following are all simple items, but it is amazing how many property managers do them poorly

  • Do your routine inspections when you should, document and report back to the owner
  • Adjust rents to market value (after consultation with owner)
  • Adjusts rents if you are having trouble filling a vacancy (after consultation with owner)
  • Check prospective tenants’ references thoroughly
  • Make sure lease agreements are valid, and try to keep tenants on fixed term agreements (with consultation with the owner) wherever possible
  • Send all required notices and documentation as per legislative requirements
  • Keep up to date with maintenance

If you can be mindful of all of the above, the external agencies won’t stand a chance!

(image courtesy of Stuart Miles www.freedigitalphotos.net)

By Sally Baumber


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  1. Michael Tomlinson

    Hi,
    Is there a limit to how many units an on-site manager/caretaker can buy in Queensland

    • Carly Crossley

      Hi Michael,

      If an onsite manager is buying units in his/her complex, there is no limit as to how many they can buy. They must disclose their interest/ownership to other owners of units in the letting pool, and potentially the body corporate, if the onsite manager owns units through multiple entities such as different businesses.

      If you’re referring to purchasing units outside of the onsite manager’s complex, scattered around Queensland in varying locations and buildings, then there would be no restrictions relating to your own income being earned from owning management rights.

      I hope this helps! If you have any questions please email marketing@hirum.com.au and our team can discuss further.

      Kind regards,
      Carly

  2. Peter Marsden

    Hi Sally, What happens in the eventuality that holiday rental units get sold to owner/occupiers thus removing them from the rental pool, thus, reducing your net profit, thus, reducing the value of your management rights. What happens when there is no more holiday rentals and all the units are owner/occupiers? Do you still have a business?

    Regards

    Peter Marsden

    • Carly Crossley

      Hi Peter,

      The purpose of our post was to provide sufficient information to our clients so that they may hopefully avoid the scenario you have questioned. Naturally many might see your scenario as resulting in no business left at all. However, onsite managers generally earn a body corporate wage which provides a small income to the “business”. The opportunity in a scenario such as your question would be to gain a full licence and build good relationships with the current owners. Over time, some will undoubtedly want to sell again, which presents the opportunity for you to then handle the sale for the owner, hopefully attracting an investor over an owner occupier under your guidance. As this stage, the commission earned from the sale should more than make up for the lost revenue in the interim period that the unit wasn’t in your letting pool. Small comfort not knowing when this return on investment might flow back to a manager but it’s important to look for opportunities of what might come rather than what has been.

      Kind regards,
      Carly Crossley