It seems to be accepted that when appointing a contractor to do work on an investment property that the cheapest quote is always the best. This accepted rule of thumb couldn’t be further from the truth.

We have found that the cheapest quote is not necessarily the best quote at all.

When appointing a contractor to do work on your investment property we take into consideration a host of factors determining contractor’s suitability to do the work.

Other than price the following must also be taken into consideration:

– Is the contractor licensed to complete work for that trade?

– Is the contractor insured? If the contractor is not insured you carry the risk.

– Can the contractor provide references for similar work that he has completed?

– On work such as refurbishments, have you been given a start and completion timetable?

– Is the contractor going to complete the work himself, sub contact the job or oversee other employees to complete the work?

– Have you confirmed the materials used and any warranty periods applicable?

The above may seem a little over the top, but all too often we have seen investors appoint a contractor on price alone and ignore the host of variables to be taken into consideration when appointing a contractor most suitably qualified to do the work.

We always suggest to investors to take the time and care in appointing a contractor as you would appointing a contractor in your own home.

Although we may present a quote to you for work that may seem a little high in comparison to some, the above must be taken into account in order to protect your interests, the dollars invested and your property.

Renting a property quickly to the right renter is essentially the most important task any agent can do for their client, however we find there are factors that can cause a property to remain vacant for longer than desired.

With these factors in mind, we can improve the chances of renting a property quicker and for the right market rent by being aware. Let’s take a look at some of these factors:

The market rent is too high: With easy internet search functions allowing prospective renters to become quickly aware of comparable properties for rent in the area, renters are more educated on market rents than ever before. For every week it is vacant it costs 2% of your annual rental income, therefore getting it priced right, and renting it quickly is everybody’s goal!

Presentation problems: First impressions are everything and poor garden presentation, ‘tired’ rental properties with poor paintwork, old carpets and out-dated décor can deter good renters who want to make a home out of the property and judge what they see first. If it looks unattractive and neglected they will drive right on by, unless it is the only property available in the area.

Oversupply: Sometimes there are more properties available than prospective renters. This could occur for seasonal reasons or as a result of a number of developments in the area flooding the market with vacant properties. Having a renter sign a lease that ends in a high demand time, and also being aware of developments occurring in the area can assist us to possibly avoid this vacancy issue.

Local facilities: Being close to facilities like shopping centres, transport, health care and education are factors prospective renters look for, so when you are considering your next investment property, forgo the temptation of ‘just chasing a bargain’ and think ‘location’ as a key determining factor. Properties purchased in the right area tend to have a very short vacancy period.

Happy Renter Provider, Happy Agent – that’s only part of the story.

Should renters only hear from us when they do the wrong thing? Late rent, inspections not up to scratch, gardens overgrown! Then there is the need to contact them for maintenance or appointments. At these times, working together with the renter is a beneficial outcome for all involved. It is when we go beyond the normal dealings and recognise the little things and reward our renters that we make a valuable renter ‘Happy.’ Incentives go a long way. We think it is therefore, worth the effort put in to retainging them!

Here are just a few simple ideas of how you may value a good renter…

• Certificate of Encouragement‘ for a renter who consistently pays on time
• Kids certificate for a tidy room at an inspection– parents do the cleanup but both will get a kick out of it
• Reduce their water bill for maintaining gardens to a high standard
• Small renovations such as updating the property with new carpets, fresh paint or a new appliance, e.g. dishwasher
• Small gift during the year or for an occasion such as Christmas, birthday or birth of a child

Even a simple thank you phone call from the Agent on behalf of the Renter Provider can be the little thing that shows the renter they are valued.

Reward and recognise good renters and increase your chance of retaining them!

In property management we see many property investors making the mistake of assuming that all real estate companies are the same and all offer the same service. They believe that the best way to differentiate between them is to get cheaper fees. However we have found a common pattern amongst agents; the cheaper they get the lower their service levels.

How is this so? Here is a simple step by step analysis of how cheap fees lead to poor service levels;

1. Cheap fees is the starting line – Unfortunately the perception is that agencies all do ‘the same thing’, we collect rent, get repairs done and find a renter. With this perception you might be attracted to a cheap agent, or one that substantially discounts their fee to impress you to win your business.

2. The property manager must manage more properties – because the agency has a much lower revenue base now because of their cheaper fees, the property manager is now well overloaded with too many properties to justify the same salary as the other ‘more expensive’ agency down the road.

3. Burnout and resignation – the overload of too large a property portfolio for one Property Manager can cause that property manager to become disillusioned, unable to cope and burnt out. They are unable to meet investor expectations of service levels and often end up resigning. This creates a high turnover of property managers within that Agency.

4. Good property managers now avoid this agency – once word of mouth spreads amongst property managers that to work at this agency you must manage so many more properties, the good property managers steer clear of this business. Therefore the only people the principal can employ are either inexperienced or poor performing property managers who can’t get a job in good agencies.

5. Poor service levels – due to this factor of now lower expertise levels, the result is poor service all around and disillusioned property investors who thought they had a ‘bargain’!

The end result is the property investor is now quite willing to go and find a quality agency, understanding that they need to pay a bit more to get better service and peace of mind.

Securing a strong yield in rental income is the strategy of many property investors.

Strengthening this further doesn’t always have to rely on market conditions improving. Here are some tips:

Replace Appliances – replacing the tired old oven or stove or adding a new dishwasher always adds to the appeal of a property.

Adding security – ensuring that doors and windows have good key locks, and even adding a security alarm provides peace of mind and sense of wellbeing and safety. Renters can also receive a discount on their renter contents insurance if the dwelling has better security. This just adds to its appeal.

Refreshing the Property – adding a new coat of paint to the walls and woodwork, replacing tired or damaged flooring or making other improvements can increase the appeal of the home and can also increase its demand and rental asking price. Don’t forget your tax depreciation benefits when renovating. Speak with your accountant on this one.

Add Storage Space – Renters love storage space, especially when they don’t need to bring it. Installing built-in robes and cupboards that use space in a smart way and adding shelves in bedrooms or in the garage will make the home more attractive. Is there space under a staircase that can become storage space? Be creative!

Bullet-Proof the Garden – let’s face it, renters in general don’t like gardening. Therefore, a low-to-no maintenance garden will be attractive. Can the small lawn area be replaced by synthetic turf? Can gravel, stones or other landscaping material that looks attractive replace lawns and gardens? Can the watering systems be automated? Renters really do value convenience.

Street Appeal – prospective renters do judge a book by its cover so it makes sense to make sure that the cover looks great. Do the letterbox or fences need new paint or even replacing? Does the garden need a facelift? This doesn’t have to cost a lot to look great!