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  • Good property management

    Good property management

    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

      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:

    The information here is of a general nature only and is not intended to constitute financial or tax advice. You should consult your professional adviser, accountant or taxation expert for advice specific to your personal circumstances.

    The views and opinions expressed in this article are those of the author alone and do not necessarily represent the views or opinions of RAMS Financial Group Pty Ltd ABN 30 105 207 538 (RAMS),  Westpac Banking Corporation ABN 33 007 457 141 (Westpac) or their related bodies corporate. This article is strictly for information purposes only and neither RAMS, Westpac nor any of their related bodies corporate make any representation as to the accuracy or completeness of the information in this article or endorse the views expressed in it.