Property management process 75 steps or tasks with approximately 16 different processes What is Property Management?
A system designed to maximise your financial return and minimise exposure to risks +
Maximise Your Investment Return Through Proactive Property Management
Two key strategies to maximize rental income through property management
1. Regular rent reviews and rent increases
Basic rules defined by the RTA 1.For periodic tenancies the landlord must give the tenant at least 60 days’ written notice to increase the rent, in addition to a period allowed to correctly serve the notice. 2.There is no limit to how much a landlord may increase the rent, as long as the rent is not increased excessively above market rate. 3.For periodic tenancies, the rent cannot be increased within 180 days of the beginning of the tenancy, nor within 180 days of the last rent increase 4.Rent can only be increased for fixed-term tenancies where provision for this is written into the tenancy agreement.
What is the best practice, how often should you review your rent? And how much to increase it by?
Review doesn’t equal increase In our agency we review every 3 to 4 months or 3 months prior to the fixed term expiry date.
Key considerations 1.You must review regularly 2.Be confident that the new rent you are asking for is the rent in the current market condition 3. Be reasonable 4. Regular increases but at small increments
2. Fixed term tenancy renewals
Benefits of fixed term tenancies -Minimise vacancy rate -Immunity against seasonal rental fluctuation -Provide certainty to both parties
Rules about fixed terms They automatically become periodic tenancies on expiry of the fixed term unless either party gives the other party written notice of their intention not to continue with the tenancy. This notice can be given by either party between 21 and 90 days before the date the tenancy expires. 90 Days21 Days Expiry
1. Always have your fixed term expire in the peak season
2. Manage fixed term break effectively Can’t advertise at a higher rent without releasing the tenant from current fixed term.
3. Align fixed term renewal date with your rent increase - Less confusion for the tenant with fewer and tidier transitions for tenants - Easier to obtain co-operation from tenants - Position of power for rent increases
Scenario 1Scenario 2Scenario 3Scenario 4 Betty is happy with all terms Betty is happy with a rent increase but not a fixed term. Betty happy with another fixed term but no rent increase. Betty is not happy with rent increase and fixed term. - Tenant Betty is currently renting 12 Lincoln Ave for $700 per week - Her 12 month fixed term tenancy is due to expire on the 20th of January 2013 - 90 days before the expiry date, Landlord Steve offers Betty another 12 month fixed term tenancy starting on the 21st of January 2013 at $725 per week. 90 Days 21 Days Expiry -Confirm in writing -Terminate -Negotiate -Accept
How do you renew a fixed term tenancy? 90 Days Notified by system that tenancy is expiring. Confirm with the landlord about their plans and intentions. Contact tenant to find out what they want to do. Negotiate between landlord and tenant if necessary. 70 Days Last day to be able to send out rent increase notice for Fixed Term Tenancy Ending, in conjunction with fixed term tenancy renewal. 30 Days Ensure all paperwork is returned by the tenant and all information is updated in the system. If not returned, call the tenant and inform them of the 21 day limitation. Inform owner that we have not received paperwork. Inform tenant of our intention to re-let and not extend the tenancy. Last day for tenant to be able to confirm extension in writing. Prepare property to be advertised. Inform owner of no response from tenant. Follow Vacating Procedure. 21 Days Property to be advertised. Normal advertising procedure 0 DaysTenant Vacates -1 DayUnless communication is documented properly, the tenancy will roll over to a periodic tenancy
Proactive Property Management -Current knowledge of legislation -Property management best practices -Clear communication -Negotiation skills with an ideal outcome in mind