Are you a property owner or interested in investing in real estate? Then it's important to understand the complexities that come with any market. Making a profit from property investment is more complicated than just fixing things when they break.
When you are managing a property, especially as a first-time landlord, you might find yourself taking on a lot of different roles. The way in which you do your job can make or break your chances of being successful.
A lot of entrepreneurs prefer to invest in rental properties, both long-term and short-term rentals. With companies like Airbnb becoming more popular, everyone is eager to transform homes and apartments into accommodation that can be rented short-term and for maximum profit.
Short-term rentals are extremely successful in Australia's current housing market, offering owners flexibility and increased profits during peak seasons. Due to a significant boom in the housing market, long-term rentals have, for years, been a reliable source of income, and investors have been able to create substantial passive income from a property becoming more valuable over time.
Purchasing an investment property is only the first step as an investor. The next step is actually managing that property. Many landlords opt to hire a property manager to handle the property and tenants.
Some landlords decide to manage a property themselves. In this case, be prepared to invest significant time into managing the entire experience professionally. Let's take a look at the best property management tips for investors.
1. Know your property well
When buying a new property the first thing you do is examine its features and systems. These include air conditioning units, and plumbing and electrical systems. Each system will have a specific lifespan and service interval. By familiarising yourself with these details, you can avoid unpleasant situations while the property is rented.
Property maintenance management tools like Bricks + Agent enable landlords, homeowners, and professional property management companies track home systems and handle maintenance and repairs tasks more efficiently. Using cloud-based maintenance software allows owners to manage issues from anywhere in the world.
2. Reinvest in your property
If you are planning to transform your home into a vacation rental, consider reinvesting in it with revenue that you earn from the property. Having frequent guests can make a property look ‘used’ and features will show signs of wear-and-tear earlier. Painting walls or replacing carpets for example, can ensure a property is in great condition throughout the year and guests will be happy to return.
Ask your guests if there was anything they would like to find there in the future. This way you will learn what your property is lacking and what upgrades will make your guests or tenants happy.
3. Formulate a financial plan
As a property manager, it’s important to be able to estimate how much your revenue your property will generate. Usually, this depends on four main factors:
- Where the property is located
- The level of comfort and luxury of the property
- The size of the property
- The amenities and the features
Professional companies use data to be able to predict future revenues. Without having access to data, you can do research online to develop an idea of what the market looks like for properties similar to yours. Advertised rates are not always accurate and may not help you predict your future revenues.
4. Work with a qualified and trustworthy real estate agent
A real estate agent’s knowledge of the market is very useful. If you are working with an experienced real estate agent, they may be able to offer you valuable tips depending on their expertise. So make sure you work with an agent who is knowledgeable and skilled in the property market, especially if you are in the early stages of investing in real estate properties.
5. Interview several property managers before hiring one
If you have decided to hire a professional property manager, especially if you own vacation rentals, it is a good idea to interview several companies or independent contractors. Check if they have a good reputation and whether they have a local presence or not. Search them on Google and see if they rank high in the search results. Ask them how they approach these key aspects of managing properties:
- Maximising the revenues generated from the property
- Caring for your property and ensuring that you will have a good experience when you visit
- Being transparent, honest, and communicative
6. Provide instructions that are easy to understand
When people are on vacation, they probably won't want to spend time figuring out instructions for appliances in the property. Provide uncomplicated instructions for the A/C system, TV, Cable, etc. A professional property management company will create detailed instructions for the guests, so you don’t have to do it yourself. If, however, you need to do it on your own, make sure that you are thorough and meticulous and that you don’t leave out any important details.
7. Plan your personal use strategically
For vacation rentals, the peak periods are normally either Winter or Summer seasons. These periods are also known as high season and can bring you double or triple revenue compared to other periods. If you want to stay on the property, make sure you are strategic about it. Avoid staying for long periods during high season, if you don’t want your revenues to be reduced. In general, it is a good idea to stay in the vacation home off season.
8. Provide all the necessary tools and utensils
One of the most important reasons why people rent vacation homes and travel in groups is because they like to be able to cook their meals and eat them together. Some of the best vacation memories are created around the dinner table. If you want your guests to have a great time, make sure you provide all the essential kitchen tools and utensils.
9. Think about your property like a hospitality business
If you are running your property as a business, it is important to treat it like a hospitality business. Think of the attention and the care that the finest hotels invest in their rooms and facilities. You want to borrow some of their techniques and apply them to your property. If you want to have a reliable source of passive income, you must have the mindset of a business owner.
10. Set fair prices
The biggest mistake that too many landlords and property owners make is to set exaggerated prices. If you want to have many guests, you must be realistic about the value of your property. Before setting the price, research the market and see what other landlords are charging for similar properties.
It might be difficult to find the sweet spot in terms of rates, but that’s what you need to focus on if you want your occupancy rates to remain high. Your prices can make or break your business and can determine whether you succeed or not.
11. Formulate a solid marketing plan
Just listing your property on vacation rental websites doesn’t count as a solid marketing plan. It is a good start, but it’s not sufficient. There are numerous other channels where property managers market vacation homes and the competition is fierce. Your end goals should be to maximise your revenue and to have a good rate of occupancy. To achieve these goals, research listing optimisation and potentially seek advice from a marketing specialist.
12. Take property maintenance seriously
Formulate a plan for preventive maintenance and stick to it. This is a cornerstone to correctly managing your property. You don’t want your guests to have to deal with a broken air conditioner, a broken hot water system, or a burst pipe. These issues are preventable if the property gets proper and regular maintenance.
With Bricks + Agent cloud-based property management app, simply post all the issues that need to be solved around a property to find and connect with local tradies in no time to get jobs done.