Learn the Basics
Do you know the Rental Property Management Basics?
Property Management is a service offered by real estate companies to manage rental properties on behalf of the landlords. Every state of Australia has different Property Management legislative requirements.
A real estate agent whose specific role is to manage rental properties on behalf of landlords. Property management is the term for the service delivered by a property manager.
Where a property manager estimates the rental value of a property considering both the property and the current market.|
A legal document that allows the real estate company to manage on behalf of a landlord. These can be Exclusive (locked in for a period) or Non-Exclusive (no lock-in period).
Any combination of property marketing methods to attract a prospective tenant to your rental property. The internet accounts for most tenant leads.
Open for inspections
When vacant, a rental property will be opened for viewing by prospective tenants. These opens can be at set times (e.g. Saturday Opens) or private times (e.g. prospective tenant calls and property is opened to suit them). Both approaches are required to minimise vacancy!
Application forms ask for details like employment status and rental history. Good property managers will check all references and use their experience to identify good and bad tenants.
The legal document specifying the lease duration and terms between the landlord and tenant. This agreement is not affected if you change real estate companies.
Entry Condition Report
A vital document that details the condition of the property before the tenant moves in. This report must be thorough and include photographs as it will be used to ensure the property is well looked after and returned by the tenant in its original condition minus normal wear and tear.
The property is inspected by the property manager periodically (different depending on company and states/territories laws). Inspections should compare against the entry condition report. The landlord should be invited to all inspections.
When the tenant moves out, the property is inspected and its condition is compared to the initial Entry Condition Report. The property should be returned to its original state minus ‘normal wear and tear’.
The process of collecting rent, informing the landlord of payment and recovering any late rent.
During or towards the end of a lease agreement the property manager should review the rent and see if it can be increased. This should be discussed with the landlord.
A new lease agreement should be developed if the tenant wishes to stay in the property beyond the initial lease period. Both the tenant and landlord must agree on new lease terms. If the lease is not renewed and the tenant wishes to stay in the property, the lease will default to a month by month lease. This offers less security to the landlord and potentially increases costs to the landlord when the tenant gives the notice to vacate, and for insurance premiums.
A landlord must expect that maintenance issues will arise. The tenant will put in a tenant maintenance request or the property manager will identify a maintenance need during vacancy or inspections. Landlords must keep their property safe and liveable.
If there is a dispute between the landlord or tenant (e.g. damage), the case will be heard at the civil court (VCAT in Victoria). A property manager should represent the landlord in court and the outcome will largely depend on the attention to detail and competence of the property management company.
Money held by a third party to cover damage or late rent by the tenant. The bond is returned at the end of the lease agreement unless there is a dispute.
Transfer Property Managers
A landlord can transfer property management companies at any time, even if in a lock-in contract. If in a contract there may be charges to leave. If not in a lock in the contract then transferring companies is quick, easy and free. DON’T put up with bad property management!