It takes a lot of experience and skill to manage a property successfully and grow the investment further. It is best to choose a property management company if you don’t have any background in managing a property as it can do more harm than good.
However, choosing any property management company is not the answer to protecting your investment. You have to be thorough in your research to select a reliable and trusted Melbourne property management company. You have to be careful in selecting the right company that provides the right services. Many times, people tend to manage their own properties as they consider it a cost saving option. But there should be many systems in place to document the property, carry out effective marking and also select the right marketplace for the property.
You have to understand the value of the property and what the target market is. Property management companies have market knowledge and a knack for staging the properties in such a way as to attract your ideal clientele. It is not enough to just find a tenant; you have to find the right tenant. This means going through tenant screening processes and thorough background checks. Maintaining and managing a property is a significant responsibility and therefore requires a person with the right expertise.
When property management is poor, there will not be clear communication between the manager, the tenants and the lessor. This can lead to a big drop in your finances. This is because, if the property manager is not responsive to tenant requests for maintenance and repairs, it can lead t dissatisfied tenants who may not want to occupy the property more than what is agreed upon.
Also, poor communication means that issuing notices or notifying you of rent arrears will be delayed which effectively stops cash flow. If the property manager doesn’t keep clear records, financial statements, repairs, approvals etc. it can affect your tax position negatively. This happens if your income or expenses gets miscalculated due to poor record keeping. And if you hire a property manager without sufficient market knowledge, you may not be getting the right market rent for your property. The rent has to be reconsidered at renewal periods considering what is happening in the market.
If you are given the wrong advice on what to charge as rent, it can cause the property to be vacant for longer. Or if the rent is too low for the market, then you will not be making the maximum out of your investment. A property manager is responsible for screening tenants and selecting the right ones. But if this process is not done properly, you will not have the best candidates chosen. This can lead to issues later on such as the tenant not paying the rent or causing damage to the property that will require significant repairs.
There is a lot of regular maintenance required for properties and when these repairs are not done, smaller issues can become bigger problems costing you more money in rectification or even replacement. If you as the lessor is not informed of problems in the property, you will not know when to take action until there is something significantly wrong with the property.