With a tenant in place, could you manage your own investment property?

When budgets are tight, it’s important to look at ways to trim expenses. For people with investment properties, it may be tempting to look at whether you really need a property manager – especially if you already have a tenant in place. But be careful. Recently, we met a landlord who is self-managing her investment property and now she’s found it’s cheaper to engage a property manager.

Here’s her story.

I wanted to trim our family expenses so I thought I would take over managing our investment property. After all, we had a tenant in place and he’d been there for a while without any problems.

A few weeks later, our tenant asked for a rental discount – not because he was in financial distress, but because he said ‘everyone else is’. The last thing we wanted was a vacant property so we agreed to his request even though it was a significant strain on our family budget.

The following week, the tenant requested changes to the conditions in the current rental agreement. We’re only part way through the lease!

I didn’t know what to do so I began searching online, trying to understand tenancy laws and how they applied in my situation. I spent hours and hours trying to figure it out. I couldn’t find an answer and meanwhile the tenant kept bugging me for changes.

I thought managing our investment property myself would help our family budget. But now I’m losing sleep, time with my kids and money.

If this happened to one of our landlords, this is what we would do:

  1. When the tenant asked for a rent reduction, we would investigate his claims. If he wasn’t experiencing financial distress, we would explain the rules around financial hardship eligibility and why he didn’t qualify.
  2. Before a lease is signed, there is some room to negotiate. Once the lease commences, both landlord and tenant are legally bound to the conditions in that lease (taking into consideration the changes implemented due to COVID-19). At Stills Properties, we take the time to educate each tenant on their rights and obligations under the tenancy agreement. Then, if a tenant asked for conditions to be changed mid-way through the lease, we would explain why that isn’t possible.

Our philosophy

Tenancy law is complicated, constantly evolving and now has some temporary changes due to COVID-19. As property managers, it’s our job to keep up with these changes so we can advise our landlords and tenants accordingly. Not only that, property management fees are usually tax deductible which means there are financial advantages in asking a professional to manage your investment property.

The rental market is challenging at the moment so now more than ever, landlords need the help and advice of their property manager.

If you are currently self-managing your investment property or simply looking for an experienced property manager, talk to Brigitte from Stills Properties on 1300 091 638 or email propertymanager@stillsproperties.com.au

Why are we letting technology take care of our investment properties?

If you have owned an investment property for a while, you may have built a good, solid relationship with your property manager. But have you noticed you are receiving more automatically generated emails lately?

From an agency perspective, property management is changing. Increasingly, property managers are relying on automation to communicate with landlords to reduce overheads and increase agency profits.

But what about the landlord?

Or the tenant for that matter? What happened to:

  • Conversations with your property manager?
  • The ability to ask questions?
  • Personal service?

In the chase for larger margins, the human side of property management is being lost and at Stills Properties, we think that’s wrong and really sad.

Click to respond

We were recently speaking with a landlord who had enjoyed a great relationship with their property manager for many years, but then she left and the “robots” took over.

Now, the landlord receives automatically generated emails asking for instructions. One of them simply said:

Repair required. Please click the link below.

Repair to curtain rod required

  • Do you wish to have this repair carried out?
  • Require a quote?
  • Require more information?
  • Not proceed with the repair?

Or this one:

Your tenancy agreement is coming to an end.

  • Do you wish to renew your tenants agreement?
  • Do you require more information?
  • No, you do not wish to renew?

The landlord wanted to know why they had to tick a box to ask for an opportunity to speak with their property manager. We agree!

Managing properties is a “people” industry and your investment property is a significant investment. That’s why we believe you should be able to call or email us if you have a question, concern or are looking for advice.

It’s the same with tenants. They need to know there is someone they can speak to if they have a problem, concern or question.

Automated emails put agency profits first but at Stills Properties, we put people first.

Do you feel like a number or a valued client?

Technology has its place. There’s no disputing that. But it should never replace personalised, customer service. That’s why your investment property will be personally managed by our founder, Brigitte Stills.

So if you would like to be treated like a valued client, contact Brigitte from Stills Properties on 1300 091 638 or email propertymanager@stillsproperties.com.au

How do you lease your investment property during a pandemic?

A good return on your investment property requires a long-term, high quality tenant. But COVID-19 has changed everything and the border closures haven’t helped. Now, the rental property market is flooded with short term rental properties that used to accommodate tourists – especially in Sydney. As a result, competition is strong.

So the question is, how do you find great tenants during a pandemic?

1. First impressions

Like everything in life, first impressions count. It’s the same with renting your investment property – and it starts with the online photos you use to promote your property. Amateur photography won’t be good enough. You need to invest in a photographer who knows what they are doing and can provide advice.

2. Understand what your ideal tenant is looking for

If your investment property is a 3 bedroom home with spacious garden, your ideal tenant won’t be single. A one bedroom apartment won’t appeal to a family of 4. You need to thoroughly understand what potential tenants are looking for and target your advertising to those who are the best fit for your property.

3. Know the flaws and fix them!

The rental market is competitive at the moment so you need to ensure your property is in impeccable condition. Before you go to market, be critical of your property. Are there any faults or flaws that could put off a great tenant? Do you have any outstanding repairs or maintenance issues that need attention? It’s a tenant’s market at the moment and this trend will continue for some time. As a result, tenants can be fussy and will compare your property with others that are on the market.

4. Have flexible opens

Most Sydney property managers only carry out 1 or 2 open homes per week and these opens only last for 15 minutes.  At Stills Properties, we fit in with viewers by offering morning or evening opens which run for 30 minutes, if required. By being flexible, we’re more likely to secure a great tenant – fast.

How long do you want your investment property to be on the market?

With over 35 years’ experience in property management, Brigitte Stills may not have experienced a pandemic. But she has seen the market through many ups and downs. As a result, she understands what it takes to find a long-term, high quality tenant in the shortest possible time. That’s why Brigitte’s landlords have been with her for so many years.

At Stills Properties, we currently have lease turnarounds of 3-7 days since COVID-19 began. Can your current property manager say that?

To quickly find the right tenant for your investment property, ccontact Brigitte Stills from Stills Properties on 1300 091 638 or email brigitte@stillsproperties.com.au

What should every investor know before they buy a property?

Before you purchase an investment property, you’ll probably seek expert advice from people like your mortgage broker for finance, possibly a buyer’s agent to find the property and a building inspector to check the property is sound.

But none of these experts view a property from the perspective of a potential tenant and that can make a world of difference when it comes to rental returns. That’s why consulting a trusted property manager can really help.

Why consult a property manager before you buy an investment property?

Your property manager is the best person to advise on the rent you can expect. They’ll also be the person who needs to find a great tenant. So getting them in before you sign the contract of sale is another level of protection when it comes to making a wise property investment.

Property managers view properties from the tenant’s perspective so they look for things that will make your rental property desirable. They’ll also consider what type of tenant will be attracted to your investment and the rent they are likely to pay.

For example, a shabby looking 3-bedroom home will attract younger people such as students, so you can expect to receive a lower rent and possibly a high turnover of tenants. Whereas, a well maintained 3-bedroom home will attract families who are likely to remain tenants for several years – providing you with a stable rental income.

Does the investment property comply with current Tenancy Laws?

When you buy a home to live in, you may decide to overlook some maintenance issues but it’s different for investment properties.

Under NSW residential tenancy laws, rental properties need to meet 7 minimum standards to be considered fit for habitation. In addition, there may be other repairs or upgrades required. An experienced property manager should be able to advise you on what’s important to do now and what needs to be planned for. Afterall, if an expensive kitchen or bathroom renovation can be delayed without jeopardising your rental income, then why spend that money now?

Suburb profiles are important

Have you ever noticed that suburbs tend to attract similar types of people? For example, suburbs with a good mix of public and private schools tend to attract families. While suburbs with lots of restaurants tend to attract couples and singles?

When it comes to buying an investment property, you’ll need a property that fits the suburb’s profile. Let’s face it, a studio apartment will be difficult to lease in an area that attracts families!

Unbiased advice you can count on

Your property manager is the one who will be taking care of your property in the long term,  so consulting with them before you buy an investment property makes sense.

If reliability, knowledge and experience are important to you, you can’t go past Brigitte Stills from Stills Properties. She’s been looking after landlords and their properties for over 30 years.

Remember, before you sign the contract of sale on an investment property, contact Brigitte for her expert and unbiased advice. Call 1300 091 638 or email propertymanager@stillsproperties.com.au

COVID-19 has changed property management. What you need to know.

When the economy starts to contract, we all look at ways to save money. For some property investors, reviewing the need for a managing agent might be on their list of cost savings. But COVID-19 has changed the rental market landscape.

These days, managing a property is more than collecting the rent and arranging for repairs. There are times when you will also need to manage some difficult conversations with your tenants. If you already have a property manager, you’ll find you are relying on them more than ever and if you don’t currently have one, you might want to reconsider your decision.

Tenant hardship

Tenants are losing their jobs or have been asked to take pay cuts. This means, they may not be able to pay their rent – even if they are receiving payments under the Government’s Coronavirus Stimulus Package.

There are 3 ways you can handle this situation:

1. Allow the tenant to break their lease and find a new tenant

With this option you will be facing the challenge of finding a new tenant who is prepared to pay the same rent. Currently, there are almost 7000 properties for lease in the Sydney metro area, so finding a great tenant who is prepared to pay the same amount of rent, could be a challenge.

2. Offer your tenants a rental abatement

A rental abatement provides tenants with a rent-free period on the understanding they will repay the lost rent at the end of the rent-free period. It’s important both the landlord and tenant understand the legal ramifications of a rental abatement. It may not be a good solution for either of you.

3. Reduce the weekly rent for a period of time

In this situation, the tenant continues to pay rent but at a reduced rate. The rent reduction usually has a fixed term (e.g. 3 months). At the end of the rental reduction period, the rent will return to previous levels. In this situation, the landlord permanently loses rental income for the period of the rent reduction. However, regular rental income is still being paid.

What we do

At Stills Properties, we believe in creating long-lasting relationships with both our tenants and landlords. In the current environment, these relationships are more important than ever so this is what we are doing:

1. Checking-in with tenants on a regular basis

Our priority is to make sure every tenant is doing ok. But our commitment to making regular contact gives us an opportunity to check each tenant’s employment situation and their ability to continue paying rent.

2. Investigating rental reduction offers, if appropriate

If a tenant comes to us to ask for a rental reduction or abatement because they have lost their job, we will request appropriate documentation to verify their job loss. Assuming everything checks out, we negotiate between the landlord and tenant to reduce the rent for a fixed period of time.

3. Providing landlords with options

We understand that a loss of rental income could mean financial hardship for our landlords, and let’s face it, landlords can lose their jobs too. There are various tax reductions and mortgage freeze options available and we’ll chat to you about your options.

4. Know the changing legislation

There is no uniform code on rental relief for each state so it’s easy to get confused.  As a result, some tenants might ask for leniency that’s only offered in another state. As your managing agent, it’s our job to know all the relevant information for investment properties in NSW. That means, our landlords don’t need to have difficult conversations with their tenants or even spend time looking for the relevant legislation.

While the coronavirus is new, managing properties isn’t!

With over 30 years in the Sydney property management business, we know what it’s like to manage properties in tough times. The cause may vary but our hard work and attention to detail never changes.

Residential property management is always about building strong, open and honest relationships with people. If you feel your current property manager isn’t looking after you or your property the way they should, contact Brigitte Stills on 1300 091 638 or email  propertymanager@stillsproperties.com.au