The ‘proactive’ way to manage your rental property investment
When it comes to rental properties, investors typically just depend on their property manager and check their portfolio every six to 12 months to conduct a lease contract review. But is this the best way to optimise the potential of a rental portfolio?
The Smart Property Investment Show’s Phil Tarrant sat down with Right Property Group director Steve Waters to discuss how investors can be more proactive in managing their rental property assets.
Here are three ways investors can take charge of their rental properties as proposed by the duo:
1. Focus on both rates and savings
According to Mr Waters, while cash flow is “the very epicentre of our survivability, and potentially our serviceability”, investors also need to look at how to reduce expenditures.
By doing so, he said investors could be “hitting it from both sides to get double the effect”.
2. Plan ahead
While most investors wait for property managers to give them a ring when a lease contract is about to expire, Mr Waters said that “taking a more active approach” could produce better results.
Sharing his lease contract review process, Mr Waters has suggested to “set calendar events two months before your lease ends, so you can start to assess the market”.
Having relevant market data on hand could help investors arrive at better decisions once it’s time to talk to the property manager, he said.
3. Manage your property manager
Speaking of property managers, Mr Waters acknowledged they have “the hardest job in the world”.
Mr Tarrant concurred and added: “They’re normally managing a whole bunch of properties, and a whole bunch of investors, and a whole bunch of issues at any given time.”
However, these heavy responsibilities can also be the caveat for property managers to “always look for the easiest path or course of less resistance”, said Mr Tarrant.
And this is why investors need to step in and “manage the manager” by using “an integrated and active approach to your half a million, multimillion-dollar asset”, Mr Waters commented.
“Get on the front foot, ring the agents two months before your leases expire and start to assess the market and have that narrative back and forth, so that you can act accordingly,” Mr Waters noted.
By doing some research, investors can have a better perspective of market conditions when the time for a lease contract review with the property manager arrives.
As a final piece of advice, Mr Tarrant said: “Good property managers will lead you on the way, and they’re the sort of property managers that you want working with you. Those that can really be an asset to you.”
Listen to the full conversation HERE.
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