Too many times we are asked to take over the management of a property only to discover that the rental on the property is way below market rent. Believe it or not, some properties we acquire have not had rental increases in over four years.
Now some owners could argue the fact that they have great tenants; tenants who look after the property as if it were their own and, what’s more, they never have a vacancy. Unfortunately, because of these reasons they feel obliged to keep the rent at the same rate.
For heaven’s sake, this is your investment property, your future! If your tenants are great, and you love them – reward them! Give them a week’s free rent at Christmas. Give them gold class tickets to movies; give them a new split system air conditioner or new carpet. Tenants (just like employees) love rewards for great work.
OK. So you never have a vacancy you say. Would you move if you knew you were onto a good thing and saving money?
If your tenant should be paying $320 per week and is only paying $270 per week – why would they move? Take for example, if your property is $50 below market rent. $50 x 52 weeks =$2600 per year x 4 years = $10,400 – just remember you haven’t saved these dollars, your tenant has.
And another thing, what happens when you come to sell? More dollars lost – particularly if an investor was looking to buy your property. You may be forced to sell thousands of dollars below the asking price because the rental income figures don’t stack up.
If your property manager is not watching the market closely and working to see that your investment is performing to its full potential, you could be losing thousands of dollars and not even know it. You could be hoodwinked into thinking everything is running smoothly. Don’t think for a minute just because your property manager is nice and appears on the surface to be doing a good job that you don’t have to worry. Nice is fine, but shouldn’t you be looking for a property manager who is great at their job and understands and knows the market? One who is looking to get you the best possible tenant with the best returns?
Look for the two essential elements in a property manager- skill and experience – nothing else matters.