Renting out a property is a bit more complicated than it can often seem on the surface. It’s not quite as simple as putting up your advert and waiting for the phone to ring.
Sometimes in a more booming market, this might be different, but certainly, when the market is more in the favour of tenants, there are some things that property managers know but don’t usually share! So let’s look at some of the reasons why they are paid the management fees for your rental property!
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It’s not always possible to get all reference checks back
When you are asking for a rental reference, a personal reference, and an employment reference, and you’re working on a tight turnaround, it’s not always possible to get all three of this back. Sometimes, you are just going to have to go on a gut instinct.
When you look at the contact details provided by the tenant, you can often infer a lot already. For example, if the employer’s e-mail is a Gmail or Hotmail account, it may not be a legitimate reference. The same goes for the rental reference, although sometimes there are sub-lettings or friends listed and it is genuine.
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The 30% rule
There’s an unwritten rule, or suggestion, that the proposed weekly rental figure doesn’t exceed 30% of the tenant’s combined salaries. This is because life has other expenses, like groceries and general living costs, and if the rent is much more than 30%, it can be a good indicator of a potential bottleneck of expenditure at some stage.
If a tenant has lost their job or had to take a pay cut, for example, they still need to eat the same, and often they may still try to maintain their lifestyle, and rent can take a backseat. If an agent keeps suggesting tenants to you with 40% or higher, it’s a good sign that this agent isn’t attracting the right tenants to your property.
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Advertised price is crucial
Photos to an advert are important, especially the main rooms. However, the most crucial bar none is the pricing. With the advent of searching for places to live on the internet comes new price filters. Tenants can now search in increments of $25 per week with the number of bedrooms, type of property, and location of the property. So if you want to achieve a rent of $530 per week, it would be better to advertise at $525 per week.
That’s because more potential people will see your ad, and therefore come through. You may get applications at $525, but you can always negotiate.
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Sourcing your tenants is not better
Most of the time, if you have a friend or family member express an interest in renting your property, you might think this makes it more convenient for the property manager. However, what is most commonly the case is that you already have a tenantless incline to respect the property manager.
If they need to tidy up following a routine inspection, or if they are late on rent, etc, they are likely to go above the property manager’s head and directly to you – even if the property manager is completely in the right.
This leads to a situation that is not ideal and gives the tenant a false sense of power. Most property managers won’t say this, but it’s best to either let them source the tenant for you or make it clear to your friend/ family member that all communication must be through the property manager.
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Most tenants apply for multiple properties at once
When a tenant is looking, they usually have a short timeframe to find a place. This means that they will go through 10-12 properties on a Saturday, and probably apply for at least 3. That means that it’s often the first one to come back to them that they accept and go ahead with.
When a property manager sends you an application to approve, it’s therefore usually best you do so within the day and ask any further questions you want on the same day. During a peak rental market, this is not a huge issue, but when the market takes a drop, it’s exacerbated.
So, there you have it! 5 things your property manager doesn’t tell you. Now you know this, your understanding of the property management in Sydney process should be better and you can get the most out of your investment property!
About the author
Charlotte Peterswald is a vastly experienced real estate agent and property manager, with successful offices in both Hobart, Tasmania, and Sydney, New South Wales. Charlotte has also experienced life in France, after living there for many years. Valuing customer service over all else and part of that is to share the wisdom and knowledge she has acquired over 30 years in the industry so that everybody can make better decisions in their real estate needs.
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