Number 3 in a series of short articles for investors on What Good Property Managers Do by a Victorian educator/real estate agent.
What is Capital Growth? Capital growth is the increase in value from the date of purchase until the current time. Many factors contribute to capital growth. Supply and demand is a big factor in what determines the value of a property. If there are several properties with basically the same features for example size of land, number of bedrooms then other features come into play in deciding which property may be more valuable. These might include gardens, aspect and the general presentation of the property.
Some things a manager cannot change but there are certainly many ways in which a good property manager can maintain and even improve on the capital growth potential of an investment property.
A good property manager has an important part to play in ensuring that the property is well maintained. A good property manager will do more than just collect the rent and do routine inspections. He/she will discuss the overall upkeep of the property with the landlord so there is an agreed long-term maintenance plan agreed between them. This needs to cover outdoor areas as well as the building.
A good property manager will ensure that the landlord is aware of the value of a quantity surveyor's report so that all depreciation allowances are recorded for a maximum tax benefit. This also alerts the landlord to the life span of chattels so that a plan can be devised for the refurbishment and replacement of things like carpets and painting at the property.
A good property manages ensures that all maintenance is carried out by fully qualified and insured tradespeople so there is no risk of work not meeting Australian standards or having negative consequences for the landlord or tenants.
How Will They Make a Difference? A good property manager maintains good communication with landlords. Major maintenance should not come as a surprise to a landlord. If there has been good communication and trust between the landlord and manager then the landlord will have time to prepare for major expenditure.
A good manager does not avoid the hard conversations. It can be difficult explaining to a landlord that the law requires something to be done which the landlord may prefer to postpone. A good property manager knows how important it is to have the landlord act within the law and to keep his/her property in the best condition so that value is maintained.
A well-maintained property will increase in value more than a neglected property. It will also achieve higher rent and better tenants. Better tenants will take better care of your property. A good property manager knows that the higher the rental returns the higher the value of the property.
As an astute investor you know that it is important to work as a team with the professionals that care for your property. A good property manager will ensure your professional team is working together in your best interests.
Make sure you choose a good property manager.
Toni Planinsek, principal of Planinsek Property Group, is happy to answer any queries through social media - Facebook and LinkedIn. She has prepared some free offers to help you on your road to becoming a successful property investor. To access yours go to www.toniplaninsek.com.au