3 Things Normal Rental Agents Won’t do for Property Investors
When we started out as official newbie property investors we decided to save some money on our rentals and do the tenant and property management ourselves. “Huge mistake!” I hear you snicker there in front of your device… Yes, fine, we will agree it was a mistake, but the amount of knowledge we gained in the process is invaluable. We did switch over to a rental agent which helped for a while, however, it all started to go horribly wrong when we started requesting some additional services that are not standard rental agent management responsibilities. We needed some very specific services that were only needed for professional property investors and most rental agents won’t do this for you. We then did what we do best and created our own “Investors Only” rental company, Frost Peak, specifically catering for property investor needs.
What are the extras that you typically won’t get from a normal rental agent, but are crucial to have as a property investor? The following are the 3 things we immediately implemented for ourselves and for our property investors:
1. As an investor every cent counts
We immediately cancelled all utility (water and electricity) inclusive rental contracts, lowered rent and charged actuals for water and electricity usage. We implemented aftermarket tamper-proof prepaid electricity meters in all the units as well as daily water meter reading tracking. This sounds obvious, but the rental agents were much happier to do fully inclusive rentals as it is a lot less admin intensive, which is understandable from their point of view. This meant that landlords were overpaying on these utilities as tenants never reported water leaks in their units and would leave ovens running to warm up the apartment. Implementing these devices and daily readings immediately cut the utility bills by more than half in some cases.
2. We immediately implemented incentives for the good tenants to stay
Turnover of tenants leaving were too high across the board using normal rental agents. We had to find ways to incentivise the good-paying tenants to stay. Depending on the area and type of property we offer free basic WIFI and a welcome package when you move in. We lower rent over time for good payment and longer leases. This sounds counterintuitive, but it saves much more in lower vacancy rates and rental procurement fees in the long run.
3. We immediately implemented rental guarantees and/or Xpello contracts
As a property investor you need money every month and the risk of tenants not paying is huge if not managed correctly. When we take over a building for an investor, we implement a 2-3 month rental guarantee which means you will not be out of pocket if your tenant disappears overnight and you are searching for a replacement. We implement Xpello eviction management services which give you the peace of mind that should a tenant stop paying rent, the eviction process is taken care of. We like to call it eviction “insurance”.
We learned some hard lessons with tenants over time and know that it is always better to have a rental agent working for you, even if it is just to take an emergency maintenance call on your behalf on a Sunday night. We also know that you can never give away 100% of the work needed on your investment to an agent. Always remember that ultimately it is your responsibility to make sure your investment grows.
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