There are times when property management seems more akin to negotiating a UN peace deal between warring countries.
If ever there was a business requiring tact, diplomacy and advanced negotiating skills property management is it. The meat in the sandwich between the landlord who enlists the services of the property manager, and the tenant whose rent ultimately pays for that service, good property managers are going to be more in demand than ever in the years ahead.
As home ownership rates decline, as they are, tenancy rates must increase, unless young Australians are planning to camp out with mum and dad for longer than they already do.
Under-pinning the rental sector, each State has its own Residential Tenancy Act, which provides the legislative framework which binds tenants, landlords and property managers. Victoria is in the final stages of its Tenancy Act review, Queensland last year brought its database legislation into line with other States and in NSW tenancy reforms were tabled to Parliament mid last year, underwhelming advocates on both sides of the property divide.
You have to feel for those legislators who must strike the balance between the rights and responsibilities of both tenants and landlords given the entrenched positions of both sides. And accepting that it is impossible to please everybody in all circumstances, it falls to property managers to comply with the law in a way that can only ever aim to meet most people’s interests most of the time.
The issue that generates greatest discord relates to security of tenure, the landlord’s right to terminate a lease without grounds provided they give 90 days’ notice. From a property owner’s perspective, and the position argued by the Real Estate Institute of NSW, removal of this right would “take away rights of ownership of the property”.
From a tenants’ perspective, the no grounds termination clause makes them vulnerable to eviction if they insist on repairs and maintenance that a landlord or property manager is unwilling to carry out, or challenge out of cycle rent increases. These fears were outlined in a Choice Report into tenancy, published in February.
Both positions are valid but when opposing interests collide it is up to the property manager to avoid conflict as a best case scenario and if that fails, manage the tensions that follow.
There’s a rule of thumb that should apply to the balancing act that property managers perform on a daily basis – put yourself in the other’s shoes and act accordingly. Here are a few guidelines that come down to common sense and common courtesy.
• Know your tenants’ and landlords’ intentions: A better understanding of your landlord’s short and long term investment strategies and goals should make it easier to select a tenant whose lifestyle is better aligned. An investor who’s intending to trade properties frequently, capitalising on a rising market, is a better fit for a tenant who values mobility and flexibility. Your long-hold landlord may value a family with a history of stable, long-term renting.
• Review rent regularly and be reasonable: It might seem generous to leave rent unchanged for several years but it’s destabilising for a tenant to be hit with a big rental increase they hadn’t budgeted for. When setting increases be aware that just because you can doesn’t mean you should raise the rent outside of agreed increases. You need to balance the relative merits of pushing up the rent and potentially losing a dream tenant.
• Show respect from the beginning: Property managers who arrive late or not at all to showings are sending a clear message of disrespect, something that no tenant should be subjected to. Not only does it start the relationship on the wrong foot but it is hardly in the landlords’ interest either. And remember that those applicants who missed out deserve consideration too – send them a text or an email but don’t leave them hanging.
• Consider the value of fixed term vs periodic leases: There are pros and cons to a fixed term lease but where you have a perfect match between tenant and landlord encourage both to renew their lease terms rather than allowing it to slide. Tenants value the certainty of knowing their home is their home for a defined future.
• Remember that good tenants are a valuable asset: If your tenant does have to move because the landlord has decided to sell or wants to put the property to some other use behave like you really care. Don’t just rely on an email or text, pick up the phone and be prepared to assist in their search for a replacement home that will allow them to make a seamless relocation.