Property investors today are juggling numerous challenges, many of which they didn’t have to deal with a few months ago.
Not only are investors confronting the fallout from lower rental returns in certain areas because of the coronavirus pandemic, but they’re also required to upgrade their properties to meet new “minimum standards” for Victorian rental properties.
Bringing houses and units up to scratch to comply with the standards laid out in the Victorian Residential Tenancies Act reforms, released at the end of March, is a critical task for some property owners.
These recent legislative changes are now impacting how owners must manage property maintenance, rent payments, lease terms and other tenancy conditions.
The Covid-19 pandemic and lockdowns have also resulted in reduced asking rents in many of Melbourne’s suburbs, with industry data showing Melbourne are now one of the two cheapest capital cities in Australia for Renters, with asking rents on par with Adelaide.
What does this mean for today’s property investors?
Firstly, investors can no longer treat property management as a “set and forget” proposition, where they pay little or no attention to things like tenant servicing, maintenance, rent reviews and lease terms.
To stay on the inside track and achieve the best returns from a rental property, tapping into the skillset of an experienced property manager yields many benefits.
Reaching out to an experienced manager will allow you to navigate your way through the new legislation and competently manage each tenancy, while also coping with the market ups and downs that have flowed from COVID-19.
Nelson Alexander Head of Property Management Martin Sizer says the more complex letting environment faced by property owners is a key reason why owners are swinging back to large, full-service real estate agencies.
He says the total number of rental properties under management by the 16-office Nelson Alexander network grew from 16,492 in July 2020 to be 16,937 at the end of June 2021.
“Even though it’s been a tough market for the rental industry over the past 12 months our rental network has grown by almost 500 properties,” Mr Sizer says.
“We are securing new properties to manage because Rental Providers can’t get properties leased through competitor agents and they reach out to us because of the size and strength of our network.”
Another reason why investors are moving their investments to Nelson Alexander is because of the agency’s strong sales team. In the current market, there are many synergies between sales and the rental industry, and full-service agencies are in the box seat to cater to the multi-faceted needs of people who own real estate.
“Our sales teams and rental teams work well together,” Mr Sizer notes.
“People who own rental properties know that not only are they managed well by our trained property managers, but our sales team is there to help them should they wish to sell or take up an opportunity to buy further investment properties.
“We’ve learnt during this challenging period that the way to win new rental properties is to make sure you have a team that has a clear understanding of the Victorian Government’s new minimum standards for rental properties and manage the legislative requirements as efficiently as possible.”
Interestingly, dozens of property owners in recent months have opted to lease out units and houses through Nelson Alexander after considering offers from smaller agencies to manage their rentals at commission rates that are lower than industry norms.
These owners recognise that it’s better to have a property fully leased and generating solid returns than to have it empty.
Nelson Alexander employs more than 400 staff across the sales, property management, owners corporation and commercial property spheres.
Mr Sizer says the Nelson Alexander property management team is equipped to work effectively during lockdown conditions.
“The property management team have again successfully worked through Lockdowns 5.0 and 6.0, and have seamlessly maintained all required activity,” he says.
“During any further lockdown periods of disruption and uncertainty, the team will show resilience and professionalism. They will not let the imposed work restrictions impact on the service levels provided to both Renters and Rental Providers.”
If you would like more information on property management and selling strategies, please contact any Nelson Alexander office.