PROPERTY MANAGEMENT PROCEDURES

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3 PROPERTY MANAGEMENT PROCEDURES TAYLOR S FIRST NATIONAL are recipients of a Best Practice Gold award Certification Taylor s First National Gold Award and Best Practice Procedures We can proudly boast as being recognized as one of the few Real Estate offices who have implemented a quality assurance system that is aligned to ISO 9000 international standards. Generally clients may not be fully aware that they are dealing with a Gold Awarded company. But they do recognize and praise the good service, effective communication, correctly organized marketing campaigns and careful attention to detail. This might not seem much in itself unless you have previously dealt with other real estate offices who cannot guarantee these service levels. But it is the confidence in knowing that you are dealing with a company with a dedicated customer focus and a system that is driven by continuous improvement. If you need a quality property manager to handle your investment property, you can be assured of receiving the highest possible standard from TAYLOR S FIRST NATIONAL. 1 2 MARKETING YOUR PROPERTY PRIOR TO RENTING YOUR HOME SELECTING A SUITABLE TENANT THE TENANCY AGREEMENT PROPERTY INSPECTIONS RENT CONTROL POLICY REPAIRS AND MAINTENANCE RENT COLLECTION AND PAYING THE OWNER INSURANCE - MANAGING THE RISK SELLING YOUR RENTAL PROPERTY BEST PRACTICE SERVICE GUARANTEE COMPANY POLICIES 1

4 WHAT WE NEED FOR YOUR PROPERTY IS A STRATEGY THAT WILL MAKE IT STAND OUT FROM THE CROWD MARKETING YOUR PROPERTY The Rental market is no different from any financial market in that it is driven by supply & demand. The experienced property investor understands that a cost effective but quality marketing program will more likely generate a higher level of tenant enquiry, provide a greater selection and higher quality of potential tenant, and assist in maximizing the rental income by minimizing the vacancy time. Our expertise in marketing investment properties enables us to make them stand out from the myriad of other rental properties that are available. News Review Messenger (Photographic Advert) Internet (Including the following websites) First Priority Tenant Database - /SMS Alerts Taylor s First National Weekly Property Guide Saturday Advertiser Advert 2 Colour Window Display in our High Profile Office

5 PRIOR TO RENTING YOUR HOME Prior to renting your property we suggest you consider attending to any minor maintenance issues that may need attention. HOW YOU PRESENT YOUR PROPERTY PLAYS A LARGE PART IN THE TYPE OF TENANT THAT IT WILL ATTRACT The better your property is presented the easier it will be to rent, and you are more likely to attract better quality tenants. As part of our pre leasing procedure our property management department inspect all properties and then discuss with landlords any areas of maintenance we feel may need attention prior to renting. Particularly with health and safety issues we believe it to be wise to rectify any of these potential hazards. PRE-LEASING MAINTENANCE CHECKLIST Are gardens neat & tidy Fix leaking taps & toilets Fix sticking doors Floors must be mopped & clean through out Have cupboards been cleaned Bathroom & kitchen thoroughly clean & free of mould Have carpets been professionally cleaned Remove & dump all rubbish Are their any lifting floor coverings that could be a tripping hazards Are the smoke alarms compliant Is a safety switch fitted Are there any other potential health & safety issues 3

6 WE ENSURE THAT A SUITABLE TENANT IS CHOSEN FOR YOUR PROPERTY SELECTING A SUITABLE TENANT Selecting a suitable tenant for your property is possibly the most important aspect of property management. Get it right and you will enjoy the long term benefits that owning investment properties can provide. However, selecting the wrong tenant can cause hardship, frustration and have you questioning the validity of owning investment properties. As such we require all potential tenants to complete a detailed application form, provide proof of identity along with details of their past and present employment history, current income to debt levels, and previous rental history with contact details for those landlords. If an applicant doesn t meet our stringent leasing criteria our recommendation is not to enter into a lease agreement with them. INDICATORS TO HELP SELECT THE RIGHT TENANT Check employment history Verify employment income level Look at debt level (can they afford to pay the rent) Check the bad tenant register for previous defaults Photocopy of drivers license to verify identity Contact previous landlords seeking honest reference Note how they are dressed (well groomed or untidy) Is their motor vehicle clean & well maintained Are they polite and well mannered Google search of applicant and past rental property 4

7 THE TENANCY AGREEMENT A written tenancy agreement between the landlord and the tenant is essential when leasing a property and specifies the rights and obligations of both parties. WE ENSURE TO FULLY EXPLAIN THE TENANCY AGREEMENT AND TERMS & CONDITIONS WITH YOUR TENANT It is a legally binding document but can be open to interpretation and it is therefore vitally important to have a good working knowledge of the Residential Tenancies Act. All our property management staff are familiar with the various sections of this act. They regularly prepare lease agreements on behalf of landlords and note all the relevant terms and conditions of that rental agreements. These terms and conditions along with our other expectations are then discussed in depth with the tenant at the point of signing the agreement. TERMS AND CONDITIONS CHECKLIST The rental amount & initial payment dates The lease term The bond amount Water usage payment arrangements Lawn & garden maintenance expectations Carpet cleaning requirements End of tenancy requirements Lost or misplaced keys Maintenance request procedure Rental payment methods Our ZERO tolerance to rent arrears policy Inspection frequency & access arrangements Prior approval is required for keeping of pets Consideration to noise levels for adjoining neighbors Home business activities are not permitted Our expectations on how the property is to be maintained 5

8 MAINTAINING THE STANDARD OF YOUR HOME PROPERTY INSPECTIONS To maintain a level of control over how a tenant keeps the condition of a rental property, it is essential that regular property inspections are conducted. Our property management department conducts three types of property inspections to help minimize any problems that may arise during the course of the lease. INITIAL PROPERTY CONDITION REPORT ROUTINE/PERIODIC INSPECTION FINAL (BOND RELEASE) INSPECTION INITIAL PROPERTY CONDITION REPORT Our property officers and inspectors complete this report prior to the commencement of the tenancy. It is a legal requirement and a condition of all tenancies that this report be conducted. It must be accurate, correctly detail the condition of the property at the commencement of the lease, and a copy must be issued to the tenant. Relevant property photos are also taken and attached to this report. ROUTINE/PERIODIC INSPECTION These inspections are designed to provide a means of checking that the tenant is maintaining the property to an acceptable standard, to report any maintenance or repairs that may be required, and to be able to provide landlords with regular information on the condition of their property. Our property officers and inspectors conduct these inspections every four months on all properties, and forward a written report supported by digital photos to the landlord. The tenant must be advised at lease seven days in advance of conducting these inspections. FINAL (BOND RELEASE) INSPECTION Our property officers and inspectors conduct this report once the tenant has vacated the property. The initial property condition report is taken to the property and the current condition of the property is compared to that on the original report. If the tenant has damaged the property, a landlord can charge the tenant a reasonable amount of compensation for that damage. Consideration needs to be given to fair wear and tear, along with the depreciated value of the damaged item when determining the amount of compensation being charged. 6

9 ZERO RENT ARREARS POLICY Our property management department takes their responsibility to ensure tenants pay their rent on time very seriously. WE TAKE THE PAYMENT OF YOUR TENANTS RENT VERY SERIOUSLY Our ZERO RENT ARREARS POLICY is discussed with all tenants at the time when they sign the lease, and as such we expect that policy to be adhered to. Legally a property manager or landlord cannot take steps to evict a tenant for non payment of rent until the rent is 15 days in arrears. This means on the 16 th day we may issue the tenant with a FORM 2 - NOTICE TO REMEDY BREACH OF AGREEMENT which allows them a further 7 days to remedy the rent arrears breach from receipt of the Form 2 notice. Should the tenant fail to pay the full rent owing by this deadline a FORM 7 APPLICATION TO TENANCIES TRIBUNAL is sent to the Residential Tenancies Tribunal applying for an order to have the tenant evicted from the property and balance of all rent money owing paid in full to the landlord. Prior to the issue of these notices our property management department will have attempted to contact the tenant on a number of occasions by sending reminder SMS messages along with the posting of a variety of letters in an attempt to try and ascertain why, and how they intend to remedy the breach. OUR ZERO TOLERANCE PROCEDURE DAILY - Print all rent arrears report DAY 5 - First reminder letter DAY 10 - Reminder call to tenant advising of their rental status - Post letter if unable to contact them DAY 16 - Prepare and serve FORM 2 Notice on tenant by post DAY 27 - Prepare Form 7 and apply to Residential Tenancies Tribunal seeking eviction and a full payment of rent order - Advise Landlord of status - Send letter to tenant Eviction Pending your immediate attention required DAY OF HEARING - Prepare and attend hearing RTT DECISION ADVISE - Advise landlord 7

10 WE CARE FOR YOUR TENANT AND FOR YOUR PROPERTY REPAIRS AND MAINTENANCE Possibly one of the most difficult aspect of property management is the handling of maintenance issues. Property managers can spend considerable time trying to co-ordinate the various types of maintenance and repairs that are required to rental properties during the course of a tenancy. They need a clearly defined and structured procedure in place to ensure tasks are attended to in a timely fashion, and to avoid the possibilities of a tenant taking legal action against a landlord for breach of agreement. Firstly they need to be able to determine the nature of maintenance problem. Is it an: Emergency problem General problem Health & Safety problem Next is to determine whether the responsibility to repair lies with: Landlord Tenant Strata or Community manager Insurance Company From there it s contacting the relevant party responsible for the repairs and seeking their approval to attend to the repair work. Then it is to determine, contact and book for the work to be conducted by a suitable tradesman. Does the job need a: Licensed tradesman (Electrician, plumber etc) Specialist tradesman General handyman Finally it s contacting the tenant to advise the day and time that the work will be carried out, or details of the tradesman who will contact them direct to book a suitable time. Here at Taylor s First National we have developed our systems and procedures over the last fifteen years. We now employ a designated maintenance officer who attends to all repair issues, and have developed our own maintenance division Combined Home Maintenance Services. This has enabled our Property Management Department the ability to quickly attend to maintenance issues. It also has provide us with more control over the important aspect of minimizing the potential risk to landlords in relation to property maintenance and health and safety issues. 8

11 COLLECTING RENT - PAYING THE OWNER All money received by us in relation to managed rental properties is paid directly into our trust account. This account has strict guidelines in how it is to be managed, and we have an obligation to ensure we distribute those funds in the appropriate way. CASH FLOW MANAGEMENT AND REPORTING Our policy is to reconcile our trust account on a daily basis to ensure it balances correctly, and all deposited funds are allocated to the correct landlord ledgers. HOW DO WE COLLECT THE TENANTS RENT When the tenant signs the lease they are given four rent payment options: They are provided with a Direct Bank Deposit Book and can pay their rent at any Bank SA branch They can make payment at our office by Money Order or Cheque They can have their own bank directly debit their account and make payment directly to our trust account They can transfer funds over the internet directly into our trust account As part of our Best Practice Accreditation & for security reasons we do not accept or hold cash at our office. WHEN DO OWNERS RECEIVE THEIR MONEY Funds in our trust account are paid to landlords at the end of each month by Electronic Funds Transfer directly into their nominated bank account. If these funds are being paid directly to a mortgage account it is a good idea to have that account paid several months in advance, in case the tenant is late with their payment, or the property becomes vacant. MONTHLY STATEMENTS Monthly rental summary statements are posted to landlords at the beginning of each month. These detail: Landlords name and postal address Date and time the statement was printed Details of all monthly income & expense Address of the property Tenants name Weekly rent amount Date to where the rent is paid up to Date the lease is due to expire ANNUAL STATEMENTS At the end of June each year, and to assist landlords with their end of financial year taxation reporting requirements, we provide all landlords with an itemized statement detailing total rent collected and expenses incurred through-out the year. This statement along with each monthly statement should be forwarded to your accountant. 9

12 RISK MANAGEMENT STRATEGY SHOULD ALWAYS BE CONSIDERED INSURANCE - MANAGING THE RISK With most investments there is always a level of risk the greater the return the greater the risk. Owning investment property is no different. More than ever, landlords are at the risk of financial loss attributable to the actions of tenants, even when the property is professionally managed. As such we strongly recommend all landlords take out both building and a landlord protection policy in order to manage this risk. As we do not hold a Australian Financial Services License we are not able to provide you with advice on insurance, however we are able to provide you with general brochure information about the service available to you. If you would like to receive a brochure about these types of insurance please contact our office. 10

13 SELLING YOUR RENTAL PROPERTY Unfortunately selling and renting your property at the same time is not always a happy marriage. The fact is we are all protective of our individual rights and quite often unsure of exactly what they are. MANAGING THE SALES PROCESS OF RENTED PROPERTIES Basically, you are entitled to have prospective purchasers view the premises at a reasonable time of the day and on a reasonable number of occasions upon supplying the tenant reasonable notice. The tenants also entitled to reasonable peace, comfort and privacy or the quite enjoyment of the premises. Of course the question arises just what is reasonable. TAYLOR S FIRST NATIONAL are experts when it comes to selling and renting your home. So, what could make more sense than have us look after both for you. The fine balance between the rights of both parties will be thoroughly observed and at the end of the day you ll have achieved the highest sale price possible in the shortest possible time whilst enjoying the benefits of a total property management package. 11

14 TAYLORS FIRST NATIONAL BEST PRACTICE GUARANTEE SERVICE GUARANTEE Everyone gives guarantees, but what do they really mean? In some cases very little. That s where TAYLOR S FIRST NATIONAL is different. Being a Best Practice accredited office means we can guarantee our service to a predetermined and written standard for every part of our real estate business. Only by establishing Best Practice standards can we guarantee to meet and exceed your expectations in the leasing and management of your investment property. Should a problem arise, it will be corrected quickly and to your satisfaction. Few real estate companies can genuinely guarantee this level of service. However you can be confident in knowing that you are dealing with a company that not only has a proven commitment to customer service, but a system that is driven by continuous improvement. 12

15 COMPANY POLICIES It is Policy of Taylor s First National Real Estate that: We treat people the way we would like to be treated ourselves We constantly strive to achieve expectations. We always act in the best interests of our clients We maintain our Quality Systems to First National Gold standard. We recruit, develop and endeavor to retain the best people. We expect everyone to strive for improvement. We incorporate quality into everything we do. We constantly review and update all of our systems. We meet all statutory, legal and industry requirements. We record and analyze all non conformance to drive improvement. The privacy of clients and customers is of paramount importance, information is only provided to those parties involved in or potentially involved in a transaction with our company. Our privacy statement and individual client and customer data is available to the individual upon request. Paul Taylor Managing Director 13

16 THE TAYLOR S FIRST NATIONAL TEAM MANAGING DIRECTOR OUR DEDICATED AND RELIABLE TEAM OF REAL ESTATE PROFESSIONALS Paul Taylor Principal SALES DEPARTMENT Jakub Ratajczak Sales Consultant Tim Schwarz Sales Consultant Gavin Armstrong Sales Consultant PROPERTY MANAGEMENT DEPARTMENT Tamika Roper Tammy Taylor Kylie Potter Amanda Jamieson Property Inspector Maintenance Coordinator Rental Administrator Property Inspector ADMINISTRATION Bec Sewell Receptionist/Marketing Coordinator 14 Renee Goulding Administration Dee Carr Financial Administrator