Many property owners in Brisbane think that they can manage their own property and some invariably do, albeit at times poorly. It’s a common problem. There are just too many things in property performance today for most situations of owner management to be completely successful.
Many owners of investment property make property management choices based on cost first and legality or practicality second; that then leads to risk, redundancy, and low-grade investment performance.
Costs of Property Management
Are the cost savings in self-management worth the trouble for a landlord? Perhaps in a simple single tenancy management the owner self-management process might work; as however, a property becomes more complex with several occupants and or leases, a professional property manager is a better solution in most cases.
There are plenty of agents around with property managers on staff, however that is where another problem evolves; the experience of the property manager may not be relevant or deep enough for the particular property type and or client.
Challenges of Property Management
Let’s take things a bit further. There are always challenges in commercial and retail property management. Think about these things for starters:
- Negotiations with difficult tenants on leasing and occupancy matters
- The gathering of comparable market evidence from other leased properties
- Strategic tenant retention and lease negotiation
- Vacancy marketing to reduce the problems of loss of rent
- There are differences to consider in office, industrial, and retail property management
There are other things to add to the list. Rarely will a property owner have enough exposure to the local property market to really understand what comparable situations, vacancies, rents, and prices are currently.
The property owner can also make mistakes with lease and tenant matters simply because of a lack of understanding when it comes to up to date lease interpretation, and full property market information.
Things to Look for in Property Management Today
Here are some other key elements of market intelligence that are critical to the property management process.
- Latest updates on property types and market rentals for comparable properties.
- Access to a local business database of tenant enquiry across property types.
- Knowledge about lease incentives in today’s market and how they impact a new lease deal
- The ways that a vacant tenancy can be marketed for best enquiry and lease occupancy
- The different situations of gross and net rental that can bring benefits to the landlord and their investment situation
- How to qualify tenants in the current market. Some tenants will not share their full business details and or lease requirements.
- Knowledge about levels of outgoings in the local area and how they are structured into new leases today
So, there is a message here. A good property manager or real estate agent with a large team will understand these things and help the property owners appreciate what is possible with the investment property; that will then allow strategies to evolve.
An experienced property manager or leasing expert will also make clear recommendations about how to minimise the risk of vacancy and the time on market with existing vacancies. Its all about strategy and experience.
When occupancy is sorted for the property owner by a chosen property manager, the other issues of property performance can be escalated into a strategic property plan. Those issues will be prioritized including:
- Lease documentation review
- Tenant meetings and interviews
- Contractor interviews
- Property handover checklists
- Critical date assessments over the coming leases and investment cycles
- Income and expenditure reviews for budget performance assessment
- Maintenance planning to allow property compliance and safety planning to codes
- Vacancy reduction plans
- Tenant retention plans
- Refurbishment and capital works programs
So, there are plenty of reasons for a property owner to seek outside assistance in managing their property; it’s worth the money and the fees paid. The only question now left to investigate the is if the property manager has the experience and the business disciplines needed to control the asset efficiently for the future.