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COVID-19 & The Sydney Rental Market

18 August 2020

Far out! The media reports are so depressing these last few months…

There have been endless articles and news stories covering the impact that COVID-19 is having and the Sydney rental market in general. Articles covering the drastic drops in rents, record vacancy rates, and how the tables have turned with tenants having the upper hand are a daily news feature.

If you know anything about The Management Agency then you know it’s me, Antonio, from start to finish and that means I’m the one taking enquiries and showing properties and therefore I see what’s happening on the front line.

We are undeniably experiencing higher than normal vacancy rates, rents decreasing and a general negative sentiment when it comes to the Rental market and particularly in the Inner-City Areas that The Management Agency works within.

However! What I see, is continued movement of available rental properties. Properties are still being leased and there are many reasons why tenants are moving around from Property to Property.

The Management Agency continues to monitor the local Rental Market & it’s activity and advises its landlords on the best courses of action in the current market.

So, what’s up?

Let’s get all that negativity out of the way;

Yes, it’s taking longer for Properties to get leased

There’s a huge supply but the level of demand is still typical of the winter months. Why? Because prospective tenants are shopping around, they have choice and most don’t need to move or necessarily want to move but they will to find a better deal. They all get leased, eventually!

Rents are certainly not increasing

They’re either at a standstill or decreasing to meet the current market. If the property (or Properties in some cases) are advertising lower rents to minimise vacancy then that’s pushing everyone else down. Meet the market or sit vacant and wait it out – neither are ideal options but these aren’t exactly ideal times.

Short Term Rentals are saturating the market

Whilst this has slowed down, most of these properties are offered as furnished rentals, creating an influx of furnished properties. The demand for furnished properties has never been typically high, even prior to COVID-19 and therefore some landlords have unfurnished their holiday rentals simply to get their properties leased. Some will stay in the long term Residential Rental Market post-COVID-19, but I believe many will return to short term rentals once the demand for it returns. The influx of these properties has added to the supply levels and therefore impacting overall Vacancy Rates and Rents.

On the plus Side;

There’s demand for specific properties

I’m finding that specific properties are moving a lot faster than others. These are the larger terraces or the smaller terraces and smaller apartments, due to generally being rarer finds so there’s a demand for these niche properties as they are meeting a specific need in the current climate.

For example, a 5-bedroom terrace can lease in a matter of days as it’s economically making sense for prospective tenants to combine households and pool their expenses into one home. Makes sense, right?

As for downsizers, with so many tenants working from home, a couple sharing in a larger property can make their own home by downsizing and achieving their goal of getting out of shared tenancies and at the same time finding good value and a quieter more comfortable home to work from.

As I meet prospective tenants, I’m hearing first hand of people’s circumstances, circumstances that simply make it an opportune time for them to be looking to make a move.

Price them right and they’re leased within a couple of weeks. Any property that’s well cared for, updated and most importantly, competitively priced has been snapped up either at or very close to the asking rent.

Prospective Tenants are on the Hunt

So many people that come through my Open House Inspections are simply looking to move to save money. They’re in no rush to move, they don’t need to move but will if they find the right property and the best possible value.

Considering that we all spend so much more time at home these days, and in the inner city most people are working from home, tenants simply want to be happier at home. Prospective tenants are looking for more space, workspace, and somewhere simply more pleasant to be than where they are now. The way I see it, many are currently in properties that aren’t meeting all of their needs and that’s what they’re on the hunt for.

Current Tenants are doing the right thing

Current tenants who are happy with where they live are staying put and those that haven’t been COVID-19 Impacted are fulfilling their obligations. The tenants who are impacted and are demonstrating this to us, are entering into negotiations with some good and fair outcomes being achieved. These outcomes are ensuring that we can keep tenants in their homes as well as give our landlords some income certainty. At the same time, these agreements ensure we all come out of COVID-19 unscathed, once it is finally, well and truly under control.

Properties are still selling

More than 12 months into trying to sell my property, it sold well into COVID-19. Who wouldn’t want an escape to the Southern Highlands right about now.

We’re seeing the inner-city market still moving with some notable sales results being achieved. By all accounts, a lot more stock is needed as many vendors are holding off until sentiment improves and potential vendors are more confident in achieving a positive outcome.

Rents will increase… eventually

Rents always do increase at some point! Obviously, we don’t know when it could be sooner rather than later. I’m sure we’ll all be watching this space and I’m sure the media will be reporting as much when the time comes. My clients can be assured that I always closely monitor the rental market and will be kept in the know.

Your Property Manager, Me, is on the front line.

Well, this only applies if I’m already your Property Manager. Having a poor negotiator or a Property Manager not doing their due diligence in these times is costly. That aside, I’m the one showing properties, leasing properties, and listening to feedback. I know what’s happening and this way my owners know what’s happening as well. Direct from the frontline. That’s positive!

So What’s next?

If only I had a crystal ball. I can’t say I know for sure but there are some signs of Rental Stock gradually reducing as rentals come into line with the market and then come off the market altogether.

What we really need is for our Students to get back to school, all of us to get back work and get holidaying groups back into holiday accommodation – as soon as it’s safe to do of course.

At any point in time, the market has its ups and downs and we always align to its cycle regardless, we just need some movement back into the workforce and back into the inner-city suburbs.

Until then, we have to keep on keeping on and move with the market. Support our current tenants to the best of our abilities, and try to keep our heads up.

For now, I’m done with the word “unprecedented” and sticking to “perseverance” because that’s what’s needed.

 

Antonio Mesiti is the Principal & Property Manager at The Management Agency, a local Property Management specialist offering a one on one and end to end service for his Property Investor clients. For more information visit; https://themanagementagency.com.au/about/

A Quick word on Professional Photography

6/2/2020

You might have read a recent post I did about preparing your Property for Rent. After that’s said and done you need to consider marketing.

There was a time where agents snapped away on their camera, or iPhone, and those photos were loaded online to advertise a Rental Property.

Sometimes we’d even make a half-hearted effort to lighten them up using whatever software we had already pre-loaded on our Desktops.

Those times are dead and gone though, see for yourself. Scroll to the bottom of Domain.com.au or Realestate.com.au and you’ll likely see the listings that have sat online for weeks and weeks, the ones with the dodgy photos.

Sorry fellow Agents, I realise your landlords really don’t want to pay for Professional Photos.

Would you, as a landlord want your property to be among those?

“Professional Photography should be the bare minimum because Virtual Tours are becoming more and more common.”

Vacant or furnished, get professional photos. It might be that you can reuse the same set of photos time and time again if the property remains largely unchanged.

My professional photographer, for example, will take 5 amazing shots for $150.00, such a small investment for the difference it makes to your advertising, reach and ultimately, number of enquiries and then Prospective Tenants through the door which is the aim. Getting as many prospective tenants as you can through your property increases the likelihood of getting applicants. Keep in mind that the cost of photography is a tax-deductible expense.

Whenever I am with a potential client, I won’t push or do the hard sell to list with me because that’s not my style. I will, however, push when it comes to professional photography because of the benefits.

There are also benefits of listing your property with me, but that’s another conversation.

So potential landlords, say yes and be proud to say “that’s my investment property” when it goes online remembering that you’ve got to spend money to make money.

“Remember that with the right photos, correct pricing and ad placement on the major portals your property may not stay For Lease for long, that’s the point. The photos were not a wasted expense or effort especially when they can be reused”.

If you’ve read this blog, mention it when you list your new property with me and I’ll even go ½ on the cost.

Antonio – The Management Agency

 

NOTE:

If professional photography is going to capture any tenants’ furnishings or belongings, permission from the tenants must be sought first.

Preferably confirmed in writing, This is a new requirement included in the changes to the NSW Residential Tenancies Act which come into place in March 2020.

2020, What lies ahead

9/1/2020

Well, 2020 is now here and while I’m excited to see what that holds for The Management Agency & myself, we can already see it’s going to be a year of change and challenge when it comes to the world and country that we live in.

This Summer spent working from the Southern Highlands outside of Sydney shows us what Australians are made of, I’ve seen the local community here rally to support those affected by fires and doing everything they can. If I personally felt the fear spending days glued to the Fires near me app, local radio, and news, in fear of ember attacks and an approaching fire I can’t begin to imagine what those who were directly impacted have gone through. What we’ve learned is how generous and willing people are to help with their time and money, we also learned when it came to packing up our home ready to leave, just how few items we valued, packed and needed. The fact that material possessions were not important to us was a very real wake up call personally.

What can you do to help? Well I know a lot of us already have donated, I personally felt WIRES needed my donations but all of the causes are worthy ones. Here are some links below if you can donate what you can. The word is that financial donations are making the most impact at this time over food, clothing and other material donations.

WIRES

Red Cross

NSW Rural Fire Service

Or you can donate to the Celeste Barber Fundraiser where we know funds will be disbursed where it’s needed most, between the RFS, Red Cross & to those impacted by the Fires.

The need for donations and support will go on for some time so what we need in 2020 is community action to get behind these causes and pressure on our Government, Local & Federal to act before we see a repeat of these past few weeks. The Management Agency will continue to donate as much as we can consistently throughout the year of course.

Tenants are also reminded of their Rental Rights amid the bushfire crisis in this timely article put together by Kate Burke at Domain.

In the Property Management space;

We’re already set to see some changes to the Residential Tenancies Act, despite a lot of back and forth these are coming into place even though we’re not all 100% clear what they’ll mean for landlords, tenants, and Property Managers. Time will tell and I’ll do my best to keep my blog updated as I learn more and more what this means for Property Investors in NSW.

For the latest updates, I’ve been following the REINSW Latest News and also the Office of Fair-Trading updates. Check them out or ask me for a copy of the latest news. I’ll be blogging through the next few months as more news and updates become available and concentrating on the aspects that will have the most impact on Landlords and Tenants.

The way in which Real Estate Agents are qualified, licensed and their ongoing training requirements will be a lot more involved, and that might not be a bad thing at all as we move towards more detailed and Professional Standards across the board. I hope this will mean a better standard of service and delivery to everyone involved and a clearer picture of everyone’s rights and responsibilities.

As for The Management Agency, 2019 saw consistent growth with many new clients onboard across many Inner Sydney Suburbs. I’m now managing many properties across suburbs that I love working within such as Redfern, Surry Hills, Darlinghurst, and the Eastern Suburbs.

Whilst I’ve experienced this growth the 2019 Rental Market was the toughest, I’ve seen in some years in terms of Rental returns and higher than the normal seasonal vacancy rates. Whilst this has meant some great outcomes for tenants searching for new properties as they have been in a better negotiating position it has been difficult for many clients accepting stagnant rental growth and in many cases accepting lower rents. The positive to this though has been a focus on keeping our tenants happy and meeting their needs.

What I hope for 2020 is more consistent growth and the onboarding of new clients, but more so my focus is going to be adding value and being consistent in the servicing of my current clients. Something that most agencies forget is to take care of those loyal clients you already have with you.

More importantly, I hope for some action across the so many issues that we face as Australians in the hope that we collectively recognise the issues and act as we should, now and well into the future.

Like someone I know recently said, let’s strive for progress as we navigate the issues that are affecting our country and its communities.

I wish you all a Safe and Peaceful 2020, Antonio @ The Management Agency

Preparing your Property for the Rental Market

10/12/2019

Over the years I have met with many potential clients in the process of turning their primary home into an investment property.

These homeowners don’t always necessarily know what they need to do to get the property ready for the Rental Market and in many cases, they’re planning to go well beyond what is actually needed.

While there are some improvements worth focusing on, a lot of work and expense can be avoided when remembering that not every addition or improvement will translate to a good return on investment. Especially where it won’t appeal to prospective tenants who we’re trying to attract.

“My MAIN takeaway advice from this post is to get a Property Manager through your property, any property manager. Have them do a walk through and point you in the right direction as you prepare to list your property. Get thier reccomendations as to what you need to do and what you don’t”

What you need from them are some practical ideas, suggestions, and recommendations and for them to really guide you as to where to concentrate your efforts if any is needed at all.

Bounce your ideas, and what you’re thinking of doing off of them, they’ll know whether it’s worth doing or not.

So Many of these new investors come with horror stories that they’ve heard from family, friends or colleagues about the difficulties of being a landlord so this is a good time to get to know potential property managers at the same time.

Let’s be real, not every tenancy runs smoothly but start off by doing these three things then you’ve covered your bases and you’re setting off knowing you’ve done as much as you can do in preventing any possible issues.

  1. Learn a little about being a Landlord here

  2. Get Landlords Insurance i.e. there’s a blog on that too here

  3. Prepare the property for rental i.e. You’re reading it now, well done you.

 

So, you’ve packed and ready to go and you’ve got your Property Manager lined up, sure they’ve given you their recommendations ahead of this stage, but here are mine.

  • Paint, Carpet & Blinds

Nothing gives a property a refresh like these.

Even just a coat of paint helps to appeal to tenants when they come through the property. Nothing takes away the appeal of a property like marks, peeling paint, cracks and worse of all any signs of mould.

Consider a fresh coat of paint as a bare minimum and the rest as needed.

The advantage of providing new paint, carpet or blinds is that it’s easy to document the condition that property was given to a tenant. Like starting off with a clean slate.

  • My word on Improvements

What does your property need? Well, that list can be endless so don’t think about it. Saying that though, tenants want:

– Storage so linen and built ‘ins do the trick

– Dishwashers, they love these just remember you’ll have to maintain it

– Ample kitchen bench space and storage

– Fresh paint

Most of all… Cleaning. Up next, because this stands out even just during your open house inspections.

The list can be endless here but do your best with the resources and time you have on hand. I will say though if you’re not good an DIY stay away because something done poorly is obvious, and then detracts all appeal to the property.

 

  • Cleaning

You can and should expect to get your property back similar to how it was handed to tenants less some wear and tear. Be sure that it’s clean and ready for your future tenants.  If needed hire a professional as that also proves the property was cleaned prior to the beginning of a tenancy, so hold on to any invoices.

You should ensure the property is left free of any rubbish or unwanted items.

If you’re anxious, take your own photos of the condition of the property when it’s ready to hand to the agent.

 

  • Repairs, Smoke Alarms & Keys

If you’ve been putting up with an oven light that doesn’t work or a leaking tap, now’s the time to sort these out.

Make sure all your repairs are done before putting a tenant in or you can promptly expect a call requesting this repair once tenants are in.

Make sure all of your light globes are working.

This is also the time to be Replacing smoke alarms or their batteries as well as making duplicates of keys so you can have sets ready for the agent and future tenants.

 

  • Photography

 

You might consider putting this step first if you’re happy with the presentation which you’re living there, alternatively, you can get your property photographed vacant or with Virtual furniture set up.

Either way, professional photography is a must these days.

Your advertising will appeal to so many more tenants. Professional photography is relatively inexpensive these days and a set of photos can be reused again and again until any major changes are made to the property. Definitely a must to get noticed.

If you have a floor plan from when you bought the property, this is always handy too.

 

Get a quote for a set of photos from your Agent, I find 5-7 shots do the trick.

 

  • Pricing your Rental Property

 

You should be provided with a refined guide of how much rent you should expect when listing your property, a Rental Appraisal.

Ultimately you want a range that’s been refined down within $20 – $50pw.

If you’re getting a few opinions, as you should, then be concerned if an agent is appraising your property a lot higher than any others.

Some do overprice their estimates in order to secure the business but this can lead to a longer time on the market and therefore a vacancy period where you’ll likely need to drop the rent as you go.

 

If you really want to “test” the market at a higher rent, do it for a week or two at most and then reduce! Your agent should be able to gage the interest and get feedback on price from prospective tenants, they’re usually spot on after having seen many properties!

 

If you have to test the market that’s fine but your properties advertising listings will go stale in the meantime and your ad placement will fall further down on the major sites.

 

A couple of tips;

  • Keep your power on and connected until new tenants are found.
  • Make sure you or your agent isn’t letting mail pile up while the property is vacant

That’s keeping it simple in order to get your property ready to go live on the rental market, your agent should be able to guide and assist with all of these steps and make sure they’re getting ticked off along the way inline within your deadlines

If you’re in need of opinion as to what your property might need, feel free to reach out for a Free Appraisal where I can Inspect and assess if you really need to make those improvements you’re thinking about and what they might mean for your bottom line.

Lastly, if you want to know what a Property Manager does well I’ve got a blog on that too here, might help convince you that you need one.

All the best and reach out if you need me 🙂
Antonio @ TMA

What does a Property Manager do?

1/11/2019

 

Ask any Property Manager that question and you’ll likely get a “What don’t we do” as a response, and in most cases they would be right.

Whilst many might think that a Property Manager’s role is simply monitoring and collecting rent, which let’s be honest, technology helps us a lot in that sense, there’s a lot that we do consistently behind the scenes that Owner’s do not always know about.

The bulk of my work, managing properties for my clients, is carried out behind the scenes, working on the finer details to ensure that their investment interests are always being looked after. Therefore, a lot of the workload is not always obvious or even seen.

If you’re weighing up if you need a Property Manager, consider what you would have to do yourself and if you would be prepared and have the time to do it effectively.

This post will also give investors a good idea of what the value is in having a Property Manager and hopefully dispel the theory that a Property Manager only springs into action when something goes wrong.

So, here’s a behind the scenes snapshot, of what I do for my clients.

 

All things Rent & Accounting Related

Collecting rent is not as simple as just that, there is accounting and a lot of compliance requirements that come with it not to mention the regulations regarding record keeping.

A lot of conversations had with tenants are surrounding rent, particularly due dates, status and the changing of payment frequency.

Reconciling missed or part-payments, following up on rent or tenant invoices, and then there is the allocation of these funds to the relevant clients. Also managing payments for client’s outgoings such as rates and bills, monitoring due dates for these payments to avoid interest and/or penalty fees.

When it comes to rent, we can’t forget regular reviews where all factors are taken into consideration to determine if and when a rent increase can be justified. Communication and compliance requirements come into play when reviewing and increasing any rents.

As an agent, a Trust Account must be in place to hold all monies collected on behalf of clients. In order to hold a Trust Account, legislation requires an agency to undertake on-going and regular self and outsourced auditing in order to be able to operate.

The technology I employ allows me to access records, documents, ledgers and transaction history from everywhere and anywhere.

This information and documentation, such as statements and ledgers need to be easily accessible and easy for all to understand.

 

Compliance

The one that scares most Property Managers is ensuring that their properties are compliant with the many rules and regulations across the Acts that we’re subject to, namely the Residential Tenancies Act (RTA) as well as the Property Stock and Station Business Agents Act (PSBA).

The RTA, for example, is reviewed every 5 years and amendments are made at this time. At times amendments may be made within the 5-year period and a Property Manager must know where all parties’ responsibilities lie within the Residential Tenancy Agreement at all times.

An agency and/or agent must ensure the Agreements used are compliant as well as our internal Practices, Policies, and Procedures.

Moreover, we need to ensure our landlords and tenants are complying with their responsibilities within the terms of the Residential Tenancy Agreement, communication and consistent follow up is needed here whilst educating landlords and tenants of their obligations.

There is also periodic compliance required for Smoke Alarms, Water Efficiency and Swimming Pools. These three areas alone need to be certified regularly by outsourced professionals.

It is imperative as a Property Manager to have a system in place which allows for regular monitoring, auditing, and record-keeping to ensure 100% compliance of the properties under management. Some aspects of maintaining records can be the keeping of notes, email records, compliance certification, etc.

In order to renew a Real Estate License, a Property Manager must undergo regular Educational training each year. However due to the nature of the role we are always learning whether it be via conferences or webinars, in order to keep up to date with changes within the industry.

 

Marketing & Securing Tenants

We always have to be at the ready when a tenant gives the notice to vacate to get started on our search for new tenants, and for me, this takes priority whether it’s a new listing or re-letting a currently managed property.

Preparing and editing our marketing to get a property online and Inspections arranged cannot be delayed regardless of the rental market as time is of the essence.

Pricing, Photography and Property Description all need to be on point.

Rental Properties need to be on the major portals in order to gain the most exposure to prospective tenants.

I aim to ensure that my listings are given a high priority with prominent positioning on the major portals that gather the highest levels of traffic.

From experience, landlords looking to self-manage, find that advertising is not that easy or inexpensive on the major portals. These landlords can also find it difficult and overwhelming to manage rental enquiries, let alone the process of securing the right tenant.

On a Recent Listing, I was receiving an average of 25 emails per day for over a week plus text messages and phone calls. Of those enquiries the end result is securing only one tenant for the property. The workload during this period can be demanding.

Beyond the initial Marketing, there are the showings, application processing, and tenant selection and therefore declining unsuccessful tenants. Then comes processes for collecting bonds, rent and preparing the Lease, Condition Report along with supporting documents and fact sheets, ensuring that all of the compliance measures have been covered for each and every property leased. Without missing any steps, they are all crucial in their own way.

 

At the Property

Regular inspections of Rental Properties are a must.

These are an opportunity to identify issues, whether they are concerns raised by tenants, potential issues that pose a risk and to forecast improvements.

Doing so is with the view of being proactive when it comes to ensuring that the property is well maintained and identifying maintenance before or as it arises. These inspections ensure that landlords are aware of what needs to be done and what will need to be done at the property, in order for it to maintain its value as an investment.

All of this needs to be communicated to the landlord within a report that is concise, detailed yet not too overwhelming. These reports document how a property is being maintained by the tenant and at the same time allows a landlord to plan ahead for any future upgrades needed.

Outside of these set inspections, Property visits can be for anything from allowing access for tradespeople, checking completed repairs, valuers, owner visits or anything that needs prompt attention.

I find it valuable to sign leases and lease renewals at the property itself as this provides another opportunity for me to view the property as well as discuss any concerns with tenants then and there.

Being mobile, available and willing to get up and go is a must. A Property Manager is the owner’s eyes and ears and that can’t be undervalued when considering the value of the investment.

 

Working with Tenants

Property Managers communicate with tenants a lot more than their clients might realise. They are essentially working for the client as their middle person. Most of the time, landlords won’t know or need to know what these conversations are about if it doesn’t require their involvement or input.

It could be a query that is easily resolved, a problem that can be solved directly but it’s a regular occurrence in any case throughout a tenancy.

My aim here is to be the client’s problem solver.

I believe in creating a courteous and open relationship with tenants so that I am always in the know about what is happening at a Property.

Therefore, being approachable and available is a must.

This is all of benefit to the owner and they can choose to be in the “know” as much as they like or opt to authorise me to use my judgment as they’re assured that I am keeping their best interests in mind.

It also goes to say that Property Managers have to have all of the difficult conversations. The rent increase and the I’m sorry the property is being listed for sale conversations etc.

 

Repairs, Maintenance & Improvements

Repairs and Maintenance are a significant part of the role. Although most are straight forward such as repairing and replacing fixtures and fittings within Rental Properties, occasionally they can be quite involved and ongoing.

For example, today it was an oven not working, a request for a Pest Treatment (standard as it warms up) but the day is not over yet.

I of course deal with Urgent Repair calls, but The Management Agency has the best tradespeople on board that has been tried and tested and will go above and beyond for me.

 

“A common misconception is that our tradespeople will charge our clients exorbitant rates, I find this is often the reverse. The trades I use are always mindful that Property Managers are the source of a lot of their work and for this, they wouldn’t jeopardize a long term and good working relationship by burning a Property Managers client.”

 

Property Managers coordinate the tradespeople, property access and expenditure whilst communicating options and approvals with clients. At the same time providing tenants with updates as well as dealing with any grievances that the tenants may have.

 A Property Manager can oversee complete overhauls of a Property and essentially become a Project Manager, to budget and time constraints.

More on that in another blog to follow.

If your property is within a Strata Complex, there are certain repairs that will be covered by Strata and your Property Manager should pass these onto your Strata Manager and liaise directly with them.  It is a Property Manager job to know whose responsibility certain repairs fall under.

 

Miscellaneous

Phew! This one could go on so I’m going to list a few odd jobs I’ve done in the last month;

  • Changed light globes (quicker and easier than claiming from a tenant’s bond)
  • Changed a Smoke Alarm Battery, beeping like crazy when I was inspecting a property
  • Multiple locksmiths trips to cut extra keys, particularly letterbox keys that always go missing
  • Ordered and installed spring pins for Plantation shutters, $5.00 on eBay instead of a min $100 call out fee. Thanks, YouTube tutorials.
  • Helped a tenant move Lounges out of a property after the owner ran out of time, arranged council to collect them
  • Left over floorboards in a Property, delivered to the owner’s workplace
  • Surface cleaning & vacuuming, yeah no one should really have to do this when they’re suited up for work but time constraints sometimes mean these things need to be done
  • Disposing of left-over unwanted items, vacating tenants can leave a lot of bits and pieces around after a move

Now!

I’m not advertising that I’ll do any of these odd things as part of my role, but when you’re tight on time or owner’s funds and something needs to be done then sometimes it’s just easier to do it yourself, then and there. Hence why the boot of my car is packed with spares parts and supplies.

 

So, it leaves me to wonder, how many Investors want to oversee, manage and generally deal with all of this and the other one-offs I haven’t touched on?

 

“Property Managers are essentially problem solvers and we use our knowledge and our many past experiences to come up with solutions for our owners and tenants.”

 

You might think, as some people have said, “How do you do that job, I could never.” Yes, I’ve made it sound tough because that’s the truth, but it is also a rewarding career and like most, it has it’s good and bad. For the most part, we’re out and about, free to move around and meet people, and when it’s fine-tuned and working efficiently it is manageable.

Similarly, to how we don’t service our own cars, some things are better off outsourced. Just saying!

If you’re weighing up if you need a Property Manager, consider what you would have to do yourself and if you would be prepared and have the time to do it effectively whilst meeting all of the legal requirements.

This turned out to be a very long post but I hope you’ve found this to be insightful and informative.

Thanks for reading!

Antonio

Sydney Rental Market Update

22/8/2019

A slight climb in Vacancy Rates is always the norm around June coming into the winter months but this June up from 2018’s 2.8% vacancy rate for the same month.

The figures don’t lie and it does represent a shift where there’s been much more supply to meet similar demand levels. Time on the market is what’s been most frustrating as tenants take their pick of what’s on offer and then making offers on rentals their interested in.

The winter months do mean a seasonal time for hibernation in a sense with not many tenants wanting to make a move unless they have to or really want to.

On the front line, I’m seeing less enquiries and fewer prospective tenants through properties overall. With some one-off offerings, that look like great value, tenants are turning up but many turn away when the offers been too good to be true.

The Key has been to keep your rent in line with other similar properties or pay the price in Vacancy, tenants will still apply if it’s the right fit but they’re looking at so many more properties than ever before looking for the best value for money, quality properties, position and access to amenities. Rent reductions have been key to getting properties occupied quickly otherwise they risk getting stagnant on the market.

Whereas usually you would see slight rent reductions done over weeks, many owners and savvy agents wanting to cut to the chase offer significant reductions knowing that some Income is better than none!

If you need any advice or want my opinion on your Vacant Property feel free to contact me.

Hoping for a more positive report next time with a little less on the market, though I know many tenants that are hoping it remains in their favour, obviously!

Personally, I feel it’s on the up much like the sales market where things are showing positive signs of improvement as is showing in July’s Vacancy Rate Survey Results, down to 3.0% from June to July, so just in time for some warmer weather. Yes the property markets are cyclical but also seasonal and Spring is just about here!

Residential Vacancy Rates (Inner Sydney):

Jan 2019        3.2%

Feb 2019        2.9%

Mar 2019       3.7%

Apr 2019        3.2%

May 2019       3.1%

Jun 2019        3.4%    June 2018      2.8%

July 2019       3.0%

Things are looking up just in time for Spring.

Antonio 🙂

 

A Landlords Rights & Responsibilities – the brief run down

25/7/19

At some stage in the near future it will be a requirement that all landlords read and sign a disclosure that they have read and understood their rights and responsibilities – BEFORE – a lease can be signed but ahead of that I’m going to outline some of these as briefly as I can keep it.

I would be confident in saying that the majority of landlords would be well aware of their responsibilities and even their rights as a landlord and where I’ve come across that don’t, I feel it’s a Property Managers duty to educate and inform their landlords along the way. This ensures landlords are not unknowingly breaching their responsibilities as well as protecting their rights.

I think it comes down to a Property Manager looking after their clients Best Interests which in turn also ensures the property and its tenants are looked after as well.

TIP: Ask for a copy of a Blank Lease Template and you’ll be able to read everything that you’re technically agreeing to as a landlord.

So, I’ll keep this post really simple and lay out what an owner should / needs to be doing to look out for themselves first and fore most and for any tenants reading, this applies and assess who’s looking out for you!

  • Be Selective with your Property Manager, do not base a final decision purely on fees. You get what you pay for- always. You need to pick someone that’s efficient and communicative.
  • Present your property in the best way you possibly can to attract the best possible tenants
  • When selecting a tenant, you can choose the best applicant for your property, but you cannot discriminate purely religion or race.
  • Each and every repair is your responsibility (aside from standard light globes) try and have all repairs up to date before tenants move in.
  • Leases can be for 6 or 12 months, longer leases can be negotiated though
  • Landlord Insurance is highly recommended, with a bond consisting of 4 weeks rent it’ll do little to cover your financial losses in many possible scenarios
  • All repairs should be action as soon as possible with express requirements of Urgent Repairs. In any case, all should be acknowledged and tenants informed along the way. Your agent should be given your instructions on how to act should they not be able to contact you.
  • Smoke Alarms should be checked annually, an owner’s responsibility, all agents will recommend outsourcing this for a small annual fee. Invaluable for peace of mind!
  • Pets are more common than not these days so be open to the possibility; many apartment buildings have an approval process in place but you have the ultimate say. Give Pets consideration in order to open up your property to so many more prospective tenants
  • Your agent will do periodic inspections of the property, you should think of these as monitoring the condition of the property and how it is being maintained. These inspections are not necessarily to check the tenants living habits unless they are damaging or causing excess wear and tear.

Landlords, It’s not always fun. I called an owner the other day and had to promise her next time I called her I’d give her good news because it’s been challenge after challenge of late. So I called her and gave her my own personal good news, my wins for that week.

I get it, sometimes we just need to hear something positive and not just be thrown issue after issue.

And that’s what you have to do, roll with the punches. It’s not always satisfying to have tenants because of the rental income. The income goes straight away to mortgages, rates and bills, but having a happy tenant and a smooth-running tenancy can be very satisfying for many landlords.

You don’t always reach that point where all parties are consistently happy but if everyone is meeting their end of the agreement then that, is the bare minimum we should always all expect.

If you have any questions about this Post or anything else Property Management reach out to find out more about my services or simply if you just need to know where you stand!

Curious to see a copy of a Draft Lease, Email me and i’ll flick one straight back at you.

Antonio

Property Management Volumes & Procrastination

4/4/2019

Speaking from experience I’ve always believed that these factors impact greatly on the service and delivery that clients and tenants experience within Property Management.

Maybe more broadly these are issues impacting so many other industries!

VOLUME:

I mean the number of properties that a Property Manager needs to have under their management in order for their position, and the business that they work within to be viable.

I was chatting with a tenant the other day and he was asking how business was going and how I was managing it, I said something along the lines of it going quite smoothly especially as I was now only managing just under 50 properties. They’re response was “ONLY!”, yes only. I’ve worked in offices managing up to 250 with minimal administration support.

Of course I want to slowly increase my portfolio but in a sustainable and manageable way and will max out at some stage where there’ll be a need for assistance. But get in while you can ;p

The numbers of properties that the majority of property managers have under their watch is simply too many. It’s already a mammoth task being organised enough to smoothly manage these figures but for so many property managers it can just take one situation occurring that sends everything else crashing down, and it’s the norm for unexpected situations to arise, Constantly.

Obviously, a business needs to be profitable but what do we see when volume is always running at its upper limits, we see Staff turnover, dissatisfied clients that go elsewhere and complaints. It also leaves no room for growth either.

As an investor, you really should find out how many properties your Property Manager has under their management, after all, what are you paying for when you can’t get a call or email response for 2-3 days.

What about the Staff turnover that this model creates, Property Managers burn out and when they do, they leave the industry or that particular office they take with them all of their knowledge about your property – information and knowledge that can’t be all included in a handover- where handovers are rare!

New recruits are not lining up to get into property management, let’s be honest, they either want to get into Real estate sales or stay away all together.

Procrastination:

2019 started off with a lot of online chatter about procrastination and how it really is the handbrake of progress and a real stressor to many people. We all do it, not just Property Managers but I’ve seen a lot of it in my time.

In Property Management I think much of the time, procrastination may just be a person that’s been non-stop busy, relishing whatever down time they can get and therefore just putting off tasks that are non-urgent. I can almost see the rational there but whatever that task is, it will continue to just get put off Until it becomes urgent and in property management- like many roles- we should be proactive instead of reactive.

Within Property Management though procrastinating a specific task turns a non-urgent issue into an urgent one quickly, simply because that proactive approach is needed.

Property Management is a stressful space and it’s deferring stress that leads to procrastination because we as humans worry about the short term.

Explained clearly in a New York Times article I recently read “Put simply; Dr. Pychyl and Dr. Sirois found that procrastination can be understood as “the primacy of short-term mood repair … over the longer-term pursuit of intended actions.” Put simply, procrastination is about being more focused on “the immediate urgency of managing negative moods” than getting on with the task, Dr. Sirois said.” A worthwhile read, the article can be found here.

Basically, a Good Property Manager needs to “Just do It” and get on with the tasks at hand.

So how do you know as a Landlord when choosing an agent, the service that you can expect:

-Ask.                     How many properties does your potential property manager look after? You need to know where you sit amongst a sea of properties and clients that they are managing.

-Observe.             How quick is the turnaround time for simple or even more involved enquiries and questions? If it’s slow, it doesn’t usually improve over time.

And Remember. The service that you receive is similar to that of which your tenant is going to experience, and we need tenants to be looked after!

The Right Landlords Insurance

8/3/2019

These days we insure everything and as a landlord it’s now seen as must to have a policy in place that covers you as a landlord, the choice of policies are endless which has made for some competitive pricing.

Did you know;

Many of the larger insurers, where we insure our home, cars, income and lives offer policies for landlords insurance that don’t cover for events such as accidental damage or what they sometimes refer to as a result of “Bad House keeping.”

Getting the right policy is not always clear but so important.

Claiming on your landlord’s insurance policy shouldn’t be and isn’t in my experience a regular occurrence but where a Bond can be consumed so quickly for Rent Arrears, Invoices, Damages and cleaning it’s a must have in place, if you as a landlord, do not wish to bear a financial loss when a tenant vacates your property or a typically insured event occurs.

Pursuing a tenant where a property has been damaged or the tenant has absconded can be a minefield, and most property managers can guide you through or facilitate that process, BUT, there’s only so far we can go.

Property Managers can get Tribunal issued orders and attempt to have those orders enforced via a local court or even a Debt recovery agency but those do Add on more costs in fee’s and charges which the landlord needs to cover until recovery or a successful insurance claim.

A better alternative is a thorough Landlords insurance policy (some costs less than $1.00 per day), believe me this is not an advertising situation as I can’t legally recommend any one Insurer but I can advise of several companies that give you a policy you can actually claim on when need be.

A Case Study:

A tenant had vacated the property leaving us with a small amount of rent owing, cleaning and repairs to walls which quickly consumed the rental bond. They’d also obviously been preparing food directly onto a New Marble Benchtop leaving knife marks across the marble surface. The Owner was not covered for what the insurer classed to be Bad Housekeeping and had to pay to rectify the damage. Despite enforcement orders and Listing this tenant on a database the owner did not recoup their loss.

This was a policy costing $900 per annum, Insurance from a Landlord Insurance specific provider would have provided coverage at a cost of $323.00 per annum and would have covered the cost of re polishing and surface protecting the marble.

It’s not all that hard to change and the cost savings should be motivation enough.

The take away advice here is get your current policy and check it twice and if you don’t have landlords insurance then get it!

What to look for?

You need to be covered for:
  • Loss of Rent
  • Hardship
  • Absconding
  • Failing to give vacant possession
  • Defaulting on Rent
  • Accidental & Malicious Damage
  • Theft
  • Pet Damage
  • Flood Damage
  • Death of a Tenant
  • Hardship
  • Fire
  • Storm / Water Damage
  • Legal Expenses
  • Liability
  • Drug Lab Clean Up (yes)
  • Loss and damage as a result of Domestic Violence

Most of the policies from specific Landlord Insurers cover all of these items above, whilst I can’t recommend you to one insurer for legal reasons, you can ask me for Brochures of several insurers that I have worked with in the past so you can make an informed decision.

In the end you’re paying for peace of mind and protecting yourself from potential financial hardship if you end up with unexpected costs and a property in a state that can’t be re let straight away.

LASTLY: There are several insurers that will only consider a policy as valid if there is a Fixed Term Tenancy in place. So if your tenants were on a continuing agreement you might be paying for a policy that will not pay you out because of this technicality. In this day and age where renting provides all with some flexibility these policies, in my opinion, don’t suit anyone and do not work for anyone. It’s unrealistic so I would highly recommend checking your Insurers policy on this point.

Hope this has been of some help! Phew, there’s a lot I know!

Antonio

What Clients Like about The Management Agency

31/1/2019

The Management Agency, in business terms is relatively new and small, though growing at a steady pace.

Feedback is invaluable, whether it be good or bad it’s a must to find out how you’re doing from your clients perspectives and many times the only way to find out, is to ask, welcome it and listen.

I recently spoke with a few of our clients recently and asked them what they’re liking so far;

It’s a Small Business

I run a small business and happily so, having worked in many agencies it means I’ve had to manage a large number of properties at the one time. In many agencies a single Property Manager can Manage up to 200 properties, so no wonder why it’s stressful and things get missed. With a significantly smaller pool of properties and engaging the most up to date and relevant software and programs it’s definitely all Manageable.

People like to shop small and it’ll stay small and limited to ensure that the service is always there and available for our clients.

Communicative & Responsive Service

With a small portfolio of properties, comes time. Having been used to an endless to do list, I’m enjoying the additional time to make sure I’ve covered all bases and am available when it suits my clients and tenants. There’s no confusion as to who to call and being the person on the front line, it’s up to me to have the answers or to seek them. People like to call or email me directly for the answers that they need regardless of the subject of their enquiry.

Ease of access to Information

I have had some great feedback on our Financial reporting, easy to understand and customisable to client’s preferences. All of my clients have different needs when it comes to how they want their reports and the software I’ve implemented makes that very simple.

Clients also like accessing previous statements, inspection reports and Invoices via their client access portal which also holds important information such as upcoming expiry and review dates, rental figures, forecasting and financial history.

Tenants also have 24/7 access to statements, receipts and correspondence.

All of our owners and tenants are issued access invitations at the time of signing

Our Welcoming Difference

Tenants have been most vocal about the difference in their experience with The Management Agency vs a traditional agency. They’ve found it very convenient that lease signings are carried out at the property, usually on their moving day and they get to view the property, sign the lease and take keys then and there and have any questions answered on the spot.

Tenants are grateful that they get to meet at their new home instead of an office as it’s much more convenient for them.

Direct Feedback

A further benefit of being on the front line is honest and real feedback from prospective tenants when showing properties for lease, post periodic inspections and passing that on, unfiltered, to all parties. Having a Property Manager meet prospective tenants and checking applications has helped to place the most suitable tenancies. Honesty and transparency with owners and tenants are always important but doing so, face to face at a property provides a further layer of clarity and understanding where the third party is limited to one person, Me.

Clients were very open in saying that having been referred from someone with first hand experience with the way in which I operate gave them confidence and then having met one on one they felt that the one on one approach and simplicity of the processes made complete sense.

 

It’s clear that we’re doing something right where various new clients have been referred by friends, family members, our tradespeople and even our tenants. They trust this advice and my priority is then to maintain service levels across the board and provide a uniform service, this has been crucial.

Somewhat surprising to me, and maybe to others, has been that tenants have actively referred property owners to The Management Agency, surprising because it goes against what many think, that Property Managers don’t “try” to, or, have good relationships with their tenants.

Word of mouth has such a positive touch to the beginning of a new relationship and it was always my goal to have a business that grows in this way.

Whilst I’ll always carry out some marketing and social media activity, I feel that’s more so to keep our followers in the loop and show people that The Management Agency is active, listening and trying to add value by sharing knowledge and advice regardless of their being a client or not.

2018 will always be the year I left the stability and certainty that working for a Real Estate office provides and swapped that for building and operating The Management Agency where it’s all about Property Management and being involved in all aspects of every transaction.

“It is very encouraging and motivating to be justified in my belief that the Property Management space had a need for what The Management Agency is offering”

Whilst being a relatively new business, my personal 15 years of Real Estate industry experience has really paved the way for me to have my role as Property Manager down pat with several tweaks made to suit The Management Agency’s objectives and being a Director has really just meant I’m much more invested in outcomes and client satisfaction, it also does a lot for one’s motivation.

2019 has geared up quickly, with new properties coming onto the market, new tenants moving into their new homes and plenty of interest from investors wanting to know more about The Management Agency.,

I look forward, to 2019 being a year of growth, continued learning, evolving and implementation.

Whilst I am confident that The Management Agency will grow, it will be sustainably, organic and never to the detriment of our clients and the service that they signed up for!

The Management Agency is nimble but we have the time, resources but most importantly the ability and willingness.