Sunday, 16 December 2012

Managing an investment property/portfolio

OK – you’ve bought the investment property.  Now what’s the best way to go about managing it?

I think in terms of three key areas: managing revenue, costs, and risks.

Tips to manage your revenue include:
  • Maximise your weekly rent upfront when the tenants are still starry-eyed and competing with others for the property.  It can be much more difficult to get the property manager to push through a rent rise later.
  • Sign good tenants up to longer term leases.  This strategy helps to minimise vacant periods and ensure a consistent revenue stream.
To manage your costs:
  • Evaluate a range of property managers.  Rates are very competitive in most areas of the country, and you can usually get a good manager at a reasonable rate (or get them to match another quote) if you shop around.
  • Secure a property manager who is not “too” nice in meeting tenants’ demands.  If he or she is really nice to you, that could be a giveaway.  My property manager let my tenants get away with having the handyman tighten a loose screw on the toilet roll holder … which I paid for.  How difficult is it to operate a screwdriver yourself?