Building wealth through property
So, you’ve heard of property managers that unblock toilets, carry out inspections, collect the rent and (hopefully) generally make the process of renting out a property easier. But have you heard of property managers that help you build wealth?
Property management as a discipline is changing, and it’s changing quickly. The good news for property investors is that the role is becoming in many ways less operational (although the delivery of key services is still fundamental) and is instead heading in a more strategic direction. That is, you can actually expect your property manager to work with you on developing a strategy that will see you achieve your property goals.
Here at the Collective, we are all about this shift. We’ve spent enough time surveying, practicing and learning from the industry gold standard, and we’re ultimately here to better it.
Here are three things that you should be demanding from your property manager in 2020 (and beyond).
That partnership vibe
If you don’t feel like you can pick up the phone and call your property manager to discuss recent market trends in your area then, we hate to be the ones to tell you, but they’re doing it wrong.
We only have to look across the ditch to our Kiwi neighbours for an example of how the value proposition of property management services can be about relationships, expert decision making and tailored strategy that’s rooted in the fostering of partnerships between property managers and clients; rather than a more traditional exchange of dollars for goods/services.
A more diverse approach has been allowed to flourish in the New Zealand context by virtue of the percentages of investors who engage the services of a property management agency, versus those that manage their property privately. At present, roughly 65% of investors in New Zealand choose to self-manage their property; while the opposite is true in Australia, where 65% of landlords use property managers and 35% manage privately.
This smaller client base and so more competitive industry means that agencies have to better articulate on a value proposition and answer the question, ‘why go with a property management agency when you can just do it yourself?’ This reality means that relationships between client and property manager becomes the value. And from that partnership comes a sharing of goals, ideas and knowledge that underpin the ability to build wealth through property.
Reacting to client and tenant demands as a property manager just doesn’t cut the mustard anymore. It’s incumbent upon the industry to develop property managers who proactively build relationships and provide expertise around wealth creation.
What does proactivity look like in this space? Well, it’s mostly in maximising rental returns which a property manager can assist with their knowledge of the local market. But it’s also in proactive property maintenance; looking after appliances and assets, recommending renovations if appropriate and encouraging regular refreshing of spaces.
Proactivity is also the regular and periodic undertaking of a rental appraisal so that you not only understand what your property’s potential yield is at the start, but that you’re kept up to date throughout the journey with your property manager.
If your property manager isn’t engaged in these conversations with you, as well as advising you on ways to maximise potential tax offsets, negative gearing and other opportunities, it’s time to find one who is.
Measurable return on investment
Which brings us nicely to our final point. Your property manager should be demonstrating to you, regularly, how your investment in their services is helping you achieve your property goals.
As some of the more manual functions of property management become increasingly automated with advancement in technology, the focus of the role is on measurable ROI, building great relationships and serving our clients through our expertise.
If you’d like to have a chat about how we can help build your wealth through property, get in touch.