How To Recognise a High-Performing Property Manager

How To Recognise a High Performing Property Manager

This short video explains key signs indicating you’re working with a first-class property manager and what to look for.

TRANSCRIPT

1️⃣ Select Great Tenants 

So first off, of course, select great tenants who look after your property and pay the rent on time—maintaining market rent.

2️⃣ Maintain Market Rent

Doing 12-month-a-year reviews gives the landlord options on what the market is doing. 

At the end of the day, it’s always the landlord’s choice whether to increase rent. But of course, rates and rents go up annually, and if there’s been a move in the market, it helps keep your cash flow coming in. 

3️⃣ Low Vacancies. 

The goal here is, ideally, long-term tenants. Now, some properties and locations are more transitional, which needs to be taken into account. Also, the market has ups and downs when you’re advertising.

 So if the market’s slow, it’s going to take a bit longer to rent, and you could have a time when the property is vacant. But the goal here is ideally a 100% occupancy rate and between 95% and 100%.

 Any lower, it starts to reduce your cash flow. 

4️⃣ Timely routine inspections.

Timely routine inspections and report any issues to you promptly. 

5️⃣ Repairs & Maintenance

Organising any repairs and maintenance quickly and efficiently. There’s ongoing communication with the landlord and a professional tenant relationship.

6️⃣ Reply to Inquiries in a Timely Fashion.

Also, reply to inquiries in a timely manner. That’s really important. It’s frustrating if a property manager is not getting back to you. 

Of course, property managers are busy, and they might text and say, Hey, look, I’m in the middle of something right now, but I’ll call you back tomorrow morning. 

But as long as they’re making that effort, and of course, depending on your inquiry’s urgency, this handle will be in a timely manner.

7️⃣ Ongoing Communication

Ongoing communication with the landlord and also conducting a professional tenant relationship.

8️⃣Fully Compliant Tenancy Agreements.

This includes sections dedicated to declaring smoke alarms on the property, including location, expiration dates, etc. 

The Healthy Homes Declaration describes what meets the standards and if something needs to be done, the timeline for that.

Also, protecting the landlords with clauses that have your interests at heart is very important. 

9️⃣ Legal and Property Management Training. 

Access to legal and property management training and upskilling to keep landlords safe. 

A good property manager will have someone on the legal side who can call for up-to-date information if needed.

Achieve Better Results – Introducing The EEL Formula

Achieve Better Results

For landlords wanting to achieve better results, the EEL formula offers a winning process for optimising your rental property outcomes.

Here’s a detailed breakdown of these three components.

1️⃣ Education:

The foundation of success lies in educating both yourself and your tenants. Continuous education is the key, from signing a new tenancy agreement, including the tenant induction, to receiving and sending out a vacate letter at the end of the tenancy. 

For example, there may be condensation issues, so explaining the significance of proper ventilation may be necessary, or what is reasonably clean & tidy. Ensuring clarity and understanding paves the way for smoother tenancy experiences.

2️⃣ Expectation:

What to expect

Clear communication of expectations is necessary and a source of security for landlords and tenants 

When tenants are well-informed about what is required of them throughout their tenancy, they feel more at ease and understand, fostering a far more harmonious landlord-tenant relationship. 

Whether it’s outlining the steps needed to recover their bond at the end of a tenancy or explaining the consequences and actions that will be taken for late rent payments, setting expectations upfront helps manage potential conflicts and promotes accountability.

3️⃣ Lead by Example:

As a landlord, your actions speak louder than words. Demonstrating a proactive and responsible approach sets a positive precedent and instils respect and trust in your tenants. Your leadership paves the way for a mutually respectful and harmonious landlord-tenant relationship.

Better Results

Incorporating Education, Expectation, and Leading by Example principles into your rental management can significantly enhance your rental outcomes and foster a mutually beneficial landlord-tenant relationship.

Remember the EELformula; here is a video as well.

Making life easier for landlords every day.

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High Occupancy Rates Are Important

Why High Occupancy Rates Are Important?

Maintaining high occupancy rates is number four in the series covering “Four Core Fundamentals of Property Management.”

So what are the advantages?

🟢 .Increased revenue

🟢 Financial stability 

 It reduces uncertainty and gives better cash flow management for the landlord.  

This short video explains why maintaining a high occupancy rate is so crucial to landlords.

TRANSCRIPT

The advantages are increased revenue and financial stability. It reduces uncertainty and gives the landlord better cash flow management.

With long-term tenants in place who look after the rental property, the overall condition of your property will generally improve compared to short-term tenants.

Long-term tenants are likelier to do more for a property, such as the gardens and the grounds. They feel secure and want to make the property their home.

Because there’s constant rent coming in, I find landlords are more willing to spend more money on maintenance, which means increased capital value.

So, for example, you have a tenant who has been renting your property for six years, and next door, property B, is similar to yours.

On average, the tenants stay 14 to 15 or 16 months. The difference means five tenants will move in and out while your tenant has lived next door. Now, both properties rent for 600 per week.

On average, property B has a one-week vacancy between reletting and getting new tenants in.

So, hypothetically, there’s an income loss of $3,000 over that six-year period.

Now, if there were an average of two weeks of downtime between tenants, the loss of income would be $6,000. But it doesn’t stop there. You’ve got costs for letting the property between tenants and a risk of more wear and tear with tenants moving in and out.

And there’s also a risk of selecting the wrong tenants, particularly in a rental market downturn. So make sure you’re looking after those long-term tenants.

Making life easier for landlords is our specialty.

Why Do Twelve Monthly Rent Reviews?

Why Do Twelve Monthly Rent Reviews?

Twelve monthly rent reviews are part three of the video series covering “Four Core Fundamentals of Property Management.”

So why do annual rent reviews?

1️⃣ Own a rental property; you are running a business.
2️⃣ Cash flow is king.
3️⃣ Avoid large rent increases.
4️⃣Fair to all parties. 

The short video explains why twelve monthly rent reviews are a must.

TRANSCRIPT

If you own a rental property, you’re running a business, and cash flow is king in any business.

Unless you’re in a really good position, have owned the property for a long time, and have significantly reduced debt, you need that cash flow coming in.

You’ve got insurance costs that go up every year. You’ve got rates that go up every year. You’ve got to be covering for repairs and maintenance. And on your loan, if interest rates go up, you must cover that.

So, it’s really important to keep that cash flow coming in, as you want to avoid large rent increases.

I’d suggest, even if you’re in a position where you don’t have to increase the rent, increase it slightly in a smaller increment rather than waiting three, four, or five years.

Then something happens, and you may have to adjust those rents and bring them up to market rent. That’s not fair on your tenant, either.

That’s a huge jump for them. Also, you could have three or four houses in a multiple dwelling and, say, two-bedroom units or something similar.

And you’ve got one tenant who just moved in at market rent.

Next door, you’ve got a tenant who’s been there three, four, or five years. They might have only had one increase in rent at that time. That’s not fair to both parties, either.

Market rent is the amount a landlord might reasonably expect to receive, and a tenant might reasonably expect to pay for a tenant’s. The rent must be comparable to the type of property.

So, if it’s a three-bedroom, one-bath home, you must compare apples with apples in similar suburbs and streets. Now, if the market rent hasn’t increased, and when, don’t increase it. That’s not fair or reasonable, either.

Making life easier for landlords is what we do.

Why Do Regular Routine Inspections?

Why Do Regular Routine Inspections?

So, what are the advantages of doing regular routine inspections?

1️⃣ Maintenance issues and early detection.
2️⃣ Maintain and add value.
3️⃣ Minimise damage.
4️⃣ Insurance requirements.
5️⃣ Tenant safety.
6️⃣ Tenant’s responsibilities.
8️⃣ Maintaining tenant satisfaction.
8️⃣ Opportunity for communication.
9️⃣ Property compliance.

The short video explains the reasons for and the benefits of conducting routine inspections on a regular basis.

TRANSCRIPT

I often talk about four core fundamentals of property management.

Routine inspections are the second core fundamental and essential part of looking after a rental property.

So what are the advantages?

Maintenance issues and early detection can save you money, but, of course, get onto before it causes much more damage.

For example, quite often, water leaks can be significant. When doing routine inspections, checking under sinks, checking bathrooms under the basin, around the waste pipe, the elbow, etc., make sure there are no leaks because they can be gradual but, over time, can cause major problems.

Also, check the hot water cylinders; they are not leaking.

It could be things like the leaves, grass, and debris in the gutters, which need to be cleaned to prevent them from overflowing. Water can also enter bargeboards, soffits and cause damage.

Number two is to maintain and add value. Again, when you’re doing inspections. For example you can see if the exterior windows that might need painting, and then you can plan and budget for that.

It might not need to be done tomorrow, but by planning that, you can add value to your property. You might see a garden that needs easy care, like putting stone or bark down, and you’re adding value to your property with minimal cost.

Minimising damage is number three. You can minimise damage by doing inspections quite often. When new tenants move in, they have an office chair with wheels.

You’ve got good carpet, particularly the thicker carpet, and the roller wheels on the office chair will run backwards and forward on that carpet, stretching and pulling it, permanently damaging it. When you’re doing an inspection, you can see something that could be an issue and could cause damage before it does.

Some insurance companies stipulate that someone must do inspections every three months. So it’s important to adhere to that.

Tenant safety is another one. When your tenants move in, you must check that the property is safe from health and safety measure.

But something could happen. A wooden step coming up to a deck might need a board replaced, or the decking or a decking rail might need replacing. Someone could go through and cause harm to themselves. So get on to those things.

Number six is tenant responsibilities. So you’re making sure they’re looking after the property, keeping the house and grounds reasonably clean and tidy, and also making sure that whatever’s on the tenancy agreement, the number of people that occupy the property is correct.

All those types of things make sure there are no breaches of any sort.  But tenant selection, if you’ve done that well, we talk about tenant selection in other videos; that won’t be an issue.

Maintaining tenant satisfaction.

Again, if there’s a tenant repair request, get onto it because that’s important. You can address that with them right then and there. What’s the issue? Talk about it. See if it’s a fair and reasonable request, and then decide what you will do.

And, of course, the opportunity to communicate with your tenant could be something going on in their life. They could be losing their job. They could be worried that two or three weeks from now, they may not be able to pay the rent.

So, conversing with them can be very helpful, and they will appreciate it. It will also help you because you will know what’s happening and can establish a plan.  So That’s important as well. Remember, tenants are customers.

And the last one is property compliance. It could be smoke alarms, ensuring they’re all present on the property. Meeting and checking Healthy Homes: you need to be meeting that when a tenant moves in, but just checking that it still meets those standards by, for example, guttering is loose or a downpipe has fallen off.

Well, that needs to meet the standard.

So, you must comply with health and safety, healthy homes, and smoke alarms.

Trees Overhanging Your Rental Property?

Trees Overhanging Your Rental Property?

This short video discusses the problems that trees overhanging a house can cause:

➡️ Mould & dampness.
➡️ Breaks down paintwork.
➡️ Dark and dingy with a lack of light.
➡️ Blocked gutters.
➡️ Roof leaks. 
➡️ Tree roots that uplift driveways & house foundations.

TRANSCRIPT

I love trees but don’t like them when they hang over your rental property.

I wouldn’t say I’m a tree hugger, but I love trees, gardens, and lovely grounds. It looks great. And I’m not a gardener, but my wife’s a great gardener.

Palmerston North is known for its well-established streets with trees aligned down the streets and properties with established grounds and gardens, and it looks fantastic.

However, trees next to a house and overhanging over a home can block gutters and cause mould and dampness issues.

When gutters aren’t cleaned regularly, roof leaks can occur, and the house can become dark and dingy.

It would help if you got those trees pruned the branches right back, so it lets the light in, and in some cases, it’s best to take out a tree.

I don’t know why people don’t deal with this more frequently, but I see it far too often when trees branch overhang the roof, and it’s not good.

Another issue can be with root systems and trees. If you’ve got a tree, say 15 or 20 metres in height, the roots will grow at least that length underground, if not more.

You may have seen roots uplift concrete driveways. It’s rare, but they can also uplift the foundations of houses. So get rid of these trees or prune them up.

I don’t like trees beside a house, but I love trees.

Tenant Selection – The Key To A Successful Rental

Tenant Selection Is The Key

I often discuss the four core fundamentals of property management.

Yes, they are all essential keys to running a successful rental property.  However, tenant selection is number one because everything else stems from this.

This short video discusses why tenant selection is the key to a successful rental.

TRANSCRIPT

In previous blogs, I’ve discussed four key fundamentals of property management.

And indeed, they’re all important, but tenant selection is a vital aspect of property management.

You absolutely need sound systems and processes to do your due diligence when selecting tenants for your property.

You get it wrong; it’s not good.

These days, ending a tenancy is not easy, so having great systems and processes in place is critical.

If your selection process is sound, you will eliminate ongoing tenant problems, i.e.  

🟢 Late rent payments or ongoing rent arrears.

🟢 Damage to your property.

 Untidy tenants who deteriorate your property over time.

🟢 Noisy tenants who disturb neighbours with loud music.

🟢Not to mention illicit drugs and all sorts of other issues.

Getting this right is like setting the foundations down properly when building a house. Everything else stems from this.

Mastering the craft of choosing ideal tenants and maintaining consistent accuracy is a skill honed only over time with training and experience.

Easy Ways To Attract Top Tenants

Easy Ways To Attract Top Tenants

When advertising a rental, the better it’s presented, the more people will want to view the property.

This attracts alot more prospective tenants who will submit applications, ultimately giving you more choices and enabling you to choose the best tenant for your property based on merit.

This short video talks about doing basic well at a low cost to attract great tenants because a small investment of time or money can yield significant returns.

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TRANSCRIPT

I want to chat with you about simple, easy ways to attract top tenants. Because when you’re advertising a rental, right, the better it’s presented attracts more people wanting to view that property, attracting prospective tenants that are going to put applications in and ultimately gives you more choice when you are going to be going through those applications, enabling you to choose the best tenant for your property on merit.

So, first off, and I know this basic stuff, you’ll be surprised that this is neglected. I mean, a house may be presented as reasonably clean.

But I’m talking from the ceiling to the floor; I’m talking light shades, if there’s any dust on skirting boards that is wiped off, and wiped out cupboards.

The whole house presented spick and span. It will make a world of difference for the tenants who are moving in. Tenants will notice, I assure you.

Professionally clean carpets
Clean windows inside and out.

Get those niggly repairs done because you really want to get them done. You don’t want to muck around; you don’t want leaky taps and stuff like that. So get that stuff done. And, of course, when someone is viewing the property, a prospective tenant opens a wardrobe door, and the handle comes off in their hand; that’s not a good look.

So get that stuff done. It’s a good idea to replace old curtains if they’re really outdated, mouldy or faded. You can get premade curtains and great deals with specials, which also makes a world of difference; I know, it’s basic stuff.

I tell you what, just doing this stuff makes a big difference. So, the grounds are tidy, the lawns are mowed and manicured, and the edges are trimmed.

Now you can tell, can’t you, when a lawn hasn’t been mowed regularly; it just doesn’t look the same. Or if lawns have been left, it takes two or three mows to get them down.

So I’m talking nicely. Manicured lawns, weeds dealt with in the paths, anything growing up in concrete cracks, etc., and driveway weed gardens.

Of course. Remove rubbish from the grounds or garage. Get rid of old stuff just sitting around; that’s no good. Sweep the garage out thoroughly. It’s all basic stuff, I know, but man, does it make a difference just doing those things low. If you do them well, it’ll change the look.

It’s great if you want to renovate, paint, and do all that stuff, but just doing these basic things will make a huge difference to your property.

When advertising, of course, you want to ensure you’re healthy. Homes compliant and smoke alarm compliant.

And remember that a small investment can yield significant returns.

I hope that helps catch up next time.

 

Optimising Your Rental Return

Optimising Your Rental Return

Over the years, I’ve discovered that doing these four core fundamentals to a high standard guarantees excellent results in optimising your rental return. 

Do them poorly; you generally end up with less than desirable results..

This short video explains the four key fundamentals of property management.

First Fundamental - Diligent tenant selection

Prioritising diligent tenant selection is paramount. To mitigate risk, employ a rigorous screening process to identify the most suitable candidate for your property based on merit.

What Does Due Diligence Entail?

1️⃣ Scrutinising the Tenant’s Rental History

🟢Contacting past and present landlords for references.

🟢Seeking character references, preferably from professional sources such as current or former employers or real estate agents.

2️⃣ Conducting Credit and Background Checks

🟢 Conduct thorough credit history and background assessments, including examinations of any past involvement with the Tenancy Tribunal, New Zealand Police records, and the New Zealand Parole Board to ensure confidence in tenant selection.

🟢 Look for tenants who demonstrate financial responsibility, honesty, and reliability.

🟢 Avoid letting emotions dictate your choice; while gut instincts are valuable, they should only supplement the comprehensive due diligence process. 

 

Second Fundamental - Routine inspections

🟢  Establishing rapport with tenants and ensuring the property remains clean and tidy.

Promptly addressing any necessary repairs.

🟢 Encouraging a proactive approach from tenants in maintaining the property.

🟢 Distinguishing between fair wear and tear and actual damage to the property.

🟢 Attracting long-term tenants by providing excellent service.

Ingoing and Outgoing Tenants

Before new tenants take occupancy, it’s crucial to document the property’s condition. This documentation, known as an ingoing condition report, is reviewed and signed by both tenants and the landlord, confirming the property’s condition upon move-in.

In the event of a dispute during the bond inspection at the end of a tenancy, the ingoing condition report and accompanying photos serve as evidence and a reference point for the property’s initial state when the tenants first moved in.

Third Fundamental - Twelve monthly rent reviews retaining market rent

Implementing 12 monthly rent reviews and maintaining market rent levels is crucial for optimising rental returns, with costs escalating annually, including rates, insurance, and potentially fluctuating interest rates on loans. Optimising Your Rental Return

Yearly reviews ensure that rental income stays aligned with expenses, thereby maintaining better profitability and investment viability in the long run.

1️⃣Fairness and Equity: Annual rent increases align the rent with the property’s current market value and ensure that long-term tenants aren’t paying significantly less than newer tenants for a similar property, particularly in a multi-dwelling complex, where this could seen as unfair.

2️⃣ Financial Viability: As market conditions change, so do expenses associated with the property, such as maintenance, taxes, and insurance. By increasing rent annually to match or closely follow market rates, landlords can ensure that the rental income keeps pace with the rising property maintenance costs.

3️⃣ Maximising Returns: Keeping rents at market levels ensures landlords maximise their rental income potential. Over time, the cumulative effect of below-market rents can lead to significant revenue loss. By adjusting rents annually, landlords can optimise their return on investment.

4️⃣ Avoiding Large Rent Hikes: Landlords need to incrementally adjust rents to reflect market rates to avoid finding themselves in a situation where they need to implement a substantial rent increase to catch up. This sudden increase could lead to tenant dissatisfaction, potential turnover, or even legal issues. By implementing smaller annual increases, landlords can mitigate the risk of tenants leaving due to unaffordable rent hikes.

While there may be instances where landlords prefer to maintain stable rents to encourage tenant retention, it’s essential to balance this with financial considerations and fairness to both parties.

Yearly, incremental adjustments that closely track market rates are a more sustainable approach for landlords and tenants in the long run.

Fourth Fundamental - Maintaining high occupancy rates.

Maintaining high occupancy rates in rental properties is crucial for several reasons.

1️⃣ Stability of Income: High occupancy rates ensure a steady flow of rental income, which is vital for property owners to cover mortgage payments, maintenance costs, and other expenses associated with property ownership. Vacant properties generate no income but still incur expenses, which can strain finances.

2️⃣ Maximising Profitability: A fully occupied property maximises its revenue potential. Each vacancy represents a lost opportunity for income. By minimising vacancies and maximising occupancy, landlords can optimise their return.

3️⃣ Enhancing Property Value: Properties with high occupancy rates are generally seen as more valuable in the real estate market, lenders and property investors are more likely to view a fully occupied property positively, which can lead to better financing terms and higher resale

4️⃣ Reducing Turnover Costs: High turnover rates can be costly for property owners due to expenses associated with advertising vacancies, screening new tenants, and preparing properties ready to re-rent.

The trick is to minimise downtime between tenants to two or three days maximum. Maintaining high occupancy rates and retaining existing tenants longer can minimise turnover costs and ensure a more stable rental income stream.

Maintaining high occupancy rates is essential for rental properties’ financial health, stability, and long-term success. Aiming for 100% occupancy might not always be feasible, but striving for maximum occupancy ensures that the property is performing at its best potential.

Applying these key fundamentals are skills you can only master over time with training and experience.

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Tips For Tenants Applying To Rent A Property

Tips for tenants applying to rent property

This short video talks you through four tips for tenants applying to rent a property that will help you if you are a tenant looking to apply for a rental property.

➡️ Follow instructions on advertising media.

➡️ Viewing the property.

➡️ Applications.

➡️ Referees – Ideally, landlord current & past and character referees are professional in nature.

TRANSCRIPT

I’ve wanted to do these four little tips for a while, which hopefully help you If you are a tenant looking to apply for a property.

1️⃣ Follow instructions on advertising media.

The first one is to follow instructions on advertising media, how to use and book a view generally. Property management companies usually have it at the top of the page in the description. Copy this link.

It sends you either through to a tenancy service portal, or it might send you through to the property management company’s website, where you can register and book viewings.

We get emails from tenants all the time. How do you apply? How do you view this property? When the instructions are already there? So please follow the instructions now.

Also, when a property is first listed, viewing times are generally scheduled, and you can select one. Of course, if those viewing times don’t work, you’re registered, and then you can email and say, hey, look.

I see you got a couple of viewing times, but unfortunately, they don’t work. Please let me know if there’s another viewing because I want to view the property, and then you’re good to go. But please follow the instructions.

3️⃣ Viewing

Viewing the property, of course, if you have booked in for a viewing, turn up obviously.

Look, at least half of the people who book for viewing don’t turn up; it’s easy to cancel. Why would you book in if you can’t make it? It’s easy to cancel. You get reminders as well, so cancel.

Common sense. And if you’re running late, it’s good to ring up the agent, say you’re running late, phone or text or whatever, but there’s nothing worse than when you’re locking up and someone’s turning up late. If you were aware, this makes it much easier, so please do that.

3️⃣ Applications before or after viewings? 

Some companies stipulate you’ve got to view a property they don’t want someone to apply for and then go to view the property and find out it’s unsuitable.

But I don’t mind an application coming in before you’ve viewed the property. But again, if this is what the instruction is, just follow that instruction.

Personally, though, I like people applying first. If you’ve seen it and there’s a 3d tour, you’ve had a good look and are confident it meets your needs. Certainly apply because once you’ve viewed it, you’re halfway there already.

4️⃣  Referees

Referees ideally have two landlord references. Most current and past landlords are really important.

They’re very good for determining your suitability as a tenant, and we need to know that. Unfortunately, we can’t do it at face value. Also, character referees are good but professional. I mean that it could be an employer, current employer, or past employer.

It could be professional in nature, as in social work or someone that comes into your home. It could be a real estate agent who sold your property in the past. Or you might have just sold and are going to rent a property. They’re all good. But not mums and dads.

A lot of tenants put down family members and friends, and it’s just not suitable, unfortunately; if you’re applying for a job, would you put your mum or dad down as a reference?

Probably not, and it’s the same when you’re applying for a rental property,

I hope these tips help you. See you next time.