• Good property management

    Learn what to look for when choosing a property manager, thanks to RAMS' 5 essential tips. Your key to hidden investment profit might be just one click away!

  • The importance of good property management

    Your key to hidden investment profit

    It’s very easy to fall into the trap of thinking that your property manager is doing you a favour, and to not want to bother them with small issues. 

    But it’s amazing just how much money small issues can cost, especially when accumulated over the life of your property investment. Be aware, and ensure that your property manager doesn’t become complacent. 

    Key issue #1 - Maximising rental income

    The initial market rent set by the property manager for your investment might be correct, but over a longer period, things can slip.   

    • they may not stay current with rent movement
    • they may legitimately want to protect a quality tenant
    • they may take the easy option of offering your property at a more saleable rent or
    • it may simply be a case of the old property manager having left, and the new one being unfamiliar with the market.   

    The thing is, like any investment, it pays to stay on top of market trends, so regularly communicate with your property manager and quietly insist that they justify the rental value each 6 to 12 months, and adjust it accordingly.

    Key issue #2 - Minimising vacancy period

    Make sure there is minimal delay between the tenant’s notice to vacate, and the advertising of your property.  

    You want a new tenant to see your ad, apply for the property, be appropriately reference checked, leave their old property, and move in – with minimal delay.

    Set the rent appropriately for the current market – without being greedy or unreasonable. Maximise rents, without creating vacancy. 

    Ensure that your property manager promptly attends to maintenance issues, and keeps your property looking as tidy and presentable as possible.

    Key issue #3 – Optimal length of lease

    Year-long leases invariably lead to a more stable tenancy (with less vacancy), and lower initial rental costs. 

    PMs  generally charge one week’s  rent to find and sign a new tenant. The less frequently this happens, the less the total cost to you the investor is.

    Key issue #4 - Minimising non-chargeable wear and tear

    Wear and tear is inevitable. It is the property manager's task to conduct and document regular property inspections, to note any unreasonable wear and tear, and to charge the tenant accordingly. 

    If the property manager/property manager  firmly communicates this policy upfront, tenants generally look after your property better. 

    Key issue #5 – Property management fees 

    These tend to vary quite widely – between agents, and from State to State.  

    The key is to sensibly negotiate as low a fee as possible. Even 0.5% saving makes a huge difference. 

    Importance of good property management

    We’ve touched on five key issues to consider when it comes to the diligent management of your investment property.and   by keeping a steady focus on these five items you should:  

    • save unnecessary costs
    • reduce costs and undue vacancies between tenancies
    • hopefully enhance your long-term investment returns.  

    Note: While the five key issues are intended as a guide only, your individual circumstances should naturally be taken into consideration . This is why we also recommend you obtain independent professional advice relevant to your financial circumstances.


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    About the author

    Raymond A Ram is the RAMbassador for RAMS Financial Group. Raymond works with the RAMS team to bring simple, helpful and expert information on home loans and savings accounts to life with his down to earth and cheeky personality. He enjoys seeing everyday Australians turn their dreams of saving for a goal or getting into a home a reality. 

    Growing up in Goulburn, NSW, Raymond was brought up with good old-fashioned Aussie values of hard work and a fair go. It soon became apparent that Raymond wasn't content for the conventional path of grazing, producing the very best wool, and finding a nice sheep to settle down with. So it wasn't long before his passion for performing and his talent as a likeable larrikin shone through - landing him a few roles such as 'RAMlet'. He was even tipped to play RAM-bo at one point but chose to become star of the small screen instead as RAMbassador for RAMS. He now finds this role so much more rewarding.

    Contact your local RAMS Home Loan Centre about your home loan options.

    Raymond A Ram

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  • Disclaimer:

    While such material is published with permission, RAMS is not responsible for its accuracy or completeness.  This information is general in nature and has been prepared without taking your objectives, needs and overall financial situation into account. For this reason, you should consider the appropriateness of the information to your own circumstances and, if necessary, seek appropriate professional advice.