So you’ve purchased your investment property and engaged a property manager. There’s not much else to do now than sit back and wait for the rent to come in right?
Sadly, being an astute property investor isn’t this easy. It pays to be proactive and not assume the property manager will handle everything exclusively with your best interests in mind. Complacency at this stage of the investing process can make all the difference between a profitable investment and one that costs you time and money.
So what can YOU do to ensure you find the right long term tenant?
Communicate with your property manager exactly the type of tenant you are looking for. You want to be sure the tenant has a low risk profile. Ask questions such as what are their long-term plans, how stable are the relationships between the tenants, how long have they lived in the area? The more stable they are, the more likely they’ll be happy to renew for another 12 months.
Ensure the property manager provides you with all the finer details of each tenancy application, ie previous rental history, how the property was maintained throughout the tenancy, employment & credit history, maximum number of people to live in YOUR property, and most importantly what impression the property manager had of them. Always stress to the property manager that you are more interested in the quality of tenant as opposed to the speed at which the property is leased.
Set the rent at a reasonable rate. Check the market rate for comparable properties in the area and set yours accordingly. Too often landlords raise the rent as much and as often as they can, without consideration being given to the tenant. Higher rents may fly when the market is tight but when things slow quality tenants will consider another property that provides better value for money. Beware of prospective tenants that are willing to pay well above and beyond market prices – they may be desperate because they have poor rental histories.
Once you’ve found a great tenant what should you do to keep tenants happy?
- Ensure your property manager is doing their job properly and looking after the tenant. This includes regular inspections, responding to queries in good time and keeping them updated on issues related to the building.
- Attend to repairs and maintenance in a timely manner. Tenants want to live in a home that functions as it should and get what they pay for.
- Don’t raise rents above market values.
- When vacancy rates start to increase, tenants like to shop around. Offering inducements such as painting the interior, installing an air-conditioner or upgrading security in exchange for the tenant renewing their lease, are often good ways to keep tenants happy.
The investment value of your rental property is only as sound as the tenants you have in it. Each time you lose a tenant, you’re losing valuable cash while your property sits vacant. Good tenants will take care of your property, keep you up to date with any maintenance issues and provide a reliable source of income. Bad tenants can disrupt your cash flow, prematurely age your property and end up costing you more in property management fees.
Innovative Property have recently launched a property management service. If you’d like to find out more about our services please call now on 0411 522233.
Sources: Innovative Property Advocates, Property Observer, API Magazine