"PROTECT YOUR LETTING POOL, THE BENEFITS OF ON SITE MANAGEMENT" by Mike Phipps

Suncorp Metway - www.suncorpmetway.com.au

The value of your management rights business is largely determined by the net profit.  As the majority of your income is derived from letting commissions your letting pool is your single most significant asset. As such your bank manager will take a particular interest in letting pool numbers and composition.  In fact, some banks will ask you to let them know if your letting pool falls below a certain number or percentage of units in the building.

So, how to protect this valuable asset ?  The challenges are twofold.  First, get the unit into the letting pool and secondly, keep it there!  The benefits of on site letting pool management should be leveraged at every opportunity to encourage the non believers to join the club. A few of the more obvious advantages are :

• The on site manager has made a significant investment in the building and has a vested interest in it’s presentation and performance.
• Being a resident manager the letting agent is best placed to review tenants, ensure that the by laws are observed and generally keep an eye on the unit owner’s investment.
• The onsite manager is able to offer general maintenance and upkeep services from a position of being virtually on call and with the economies of scale associated with the management of a large number of lots in the scheme.
• For holiday style buildings simple matters like room cleans and key pick ups become complicated nightmares when an off site realtor is managing the unit.
• No one will have a better “feel” for the building and the rental levels and occupancy rates that are achievable than the resident manager.

Once the unit is in the pool it’s a simple matter of keeping both owner and tenant happy. A bit like world peace really !  Obviously a reasonable return goes a long way to keeping the owner on side. I’ve seen the effective use of newsletters and owner’s get togethers also help to build goodwill and a reliable letting pool.  For the tenant or holiday maker, friendly service and a clean, consistent and reliable product is key.

Obviously the variable that’s pretty much out of the resident manager’s control is the owner occupier.  Experience suggests that particularly in holiday style complexes the owner occupier will not stay long.  My advice is to stay on good terms and wait for the owner to learn that residing full time in the predominantly holiday based resort is no fun !  Once the penny drops your relationship with the owner should win the unit back into the pool.

Finally, take an interest in unit sales in your building. Investor held units are the ones that will end up in the letting pool.  If you don’t have a full real estate licence or an alliance with a general realtor you should consider these strategies as part of your letting pool management plan.

Whilst the information contained in this article is believed to be accurate and reliable, Suncorp-Metway Limited ABN 66 010 831 722 and its subsidiaries and related companies are not responsible for, or liable in respect of, any loss or damage suffered as a result of the information contained in this article.