Look beyond fees for effective property management

Friday 16 Nov 2018

Nearly 150 of First National Real Estate’s property managers recently gathered in Melbourne for the network’s annual Property Management Conference – ‘Network, Share, Evolve’.

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The professional development forum was chiefly focused on issues affecting the efficient management of millions of dollars of property investments nationally.

Because of changes to Australian tax law, investors can now borrow for the purposes of property investment and this has resulted in an exponential increase in the amount of property acquired by Self Managed Superannuation Funds (SMSFs). As a result, property managers must be prepared says First National Real Estate’s Property and Marketing Manager, Amanda Kohler.

‘A recent draft ATO ruling suggests trustees may soon be able to use money in their fund to renovate property as well. That means property managers need to be equipped to guide landlords who own investments, as part of their SMSF, toward appropriate, cost effective renovations, using licensed tradespeople. First National Real Estate has taken steps to assure that its property managers are aware of qualified specialists in the industry and can point customers towards a range of providers.’

According to First National, most property investors spend too little time assessing the skills of their property manager and need to look beyond fees when choosing who will manage their investment portfolio.

‘Property Managers frequently manage real estate portfolios exceeding the value of most financial advisors yet rarely receive such recognition’ says Ms Kohler.

‘The commitment required to effectively maintain properties, quality client relations, legislative compliance, and, excellence in customer service is sometimes extra-ordinary or even super-human’.

Yet, when choosing a property manager the network indicates that the majority of landlords and investors look only at management fees, thinking that property management represents little more than the collection of rent.

‘Investors need to consider the systems and experience behind the agency that they are entrusting the management of their properties to’ says Ms Kohler.

‘Professionally qualified and trained property managers bring so much more to the equation than rent collection. You only need to experience one problem with a tenant to begin to understand the importance of a comprehensive appreciation of the laws governing tenancy. Paying a slightly higher fee for a more professional manager makes a huge difference, even without a problem tenancy.

‘And, a good property manager does so much more than protect you from undue anxiety. They offer valuable advice about how to improve rental yields, guidance on when and where to invest and can even point investors towards the right place for advice about tax effective property investment for Self Managed Superannuation Funds’ says Ms Kohler.

Property investment remains one of the most secure forms of long-term wealth creation and, with current share market volatility as well as concerns about the economies of Europe and the United States, First National anticipates increasing interest in property investment from Australian investors in the next twelve months.

‘A climate of stable interest rates and the prospect of perhaps even a reduction in rates in the near future makes bricks and mortar exceptionally attractive’ says Ms Kohler.

First National Real Estate has over 450 offices throughout Australia and New Zealand.

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DISCLAIMER

The following advice is of a general nature only and intended as a broad guide. The advice should not be regarded as legal, financial or real estate advice. You should make your own inquiries and obtain independent professional advice tailored to your specific circumstances before making any legal, financial or real estate decisions.