Defining best practice in property management

As our industry evolves with significant shifts in technology, culture and demographics, simply doing the job of a PM isn't enough anymore.

With so many agencies relying on their rent rolls to make a significant contribution to profits, it has never been more important for property managers to be at the top of their game.

Best practice property management embraces many tasks – it’s not just about collecting rent, coordinating repairs and finding tenants. It's a dynamic, multi-faceted discipline. 

Industry research suggests it can generate nearly 50% of agency revenue. Put simply, property management sits at the core of an agency’s profitability and asset value. 

As our industry evolves with significant shifts in technology, culture and demographics, simply doing the job of a PM isn't enough. 

Implementing best practices is crucial – it's how you ensure compliance, elevate communication, empower data-driven decisions and, crucially, safeguard the mental wellbeing of everyone involved.

Here’s a strategic framework for excellence for the core areas of property management.

Exceptional Communication

Communication is paramount. A lack of transparent, timely dialogue is a primary reason why landlords or investors switch agencies. 

• Be upfront and professional: From day one, set clear expectations for landlords and tenants. Educate them on common conflict areas, such as wear and tear, rent arrears processes and repair procedures.

• Timely responses: Make responsiveness a hallmark of your service. Reply quickly to questions, requests and complaints. Sometimes, this means following up a phone call with an email summary to ensure clarity.

• Active listening: When conflict arises, actively listen to understand concerns fully. Show genuine empathy. This builds trust and is a powerful de-escalation tool.

• Document everything: Maintain robust, detailed records of every interaction, discussion and action. This protects you legally and justifies your actions should issues escalate. All agreements should be formalised in writing and signed by all parties involved.

• Cut the jargon: Communicate clearly, concisely and in plain language.

Streamline tenant search

Attracting and retaining the right tenants is fundamental to a thriving rent roll. 

• Thorough screening: This is your first line of defence against future problems. Implement comprehensive screening processes, including identity verification and conducting checks against relevant databases for past bankruptcies or court records.

• Go beyond the lease: Educate tenants on your expectations, rent arrears policies and inspection procedures.

• Enhance the rental experience: Satisfied tenants are loyal. Promptly addressing maintenance concerns, for instance, prevents minor issues from escalating.

Proactive maintenance 

Managing property maintenance and repairs isn't just a task; it's a strategic pillar. Unaddressed issues are a common reason for tenants to leave.

• Make a plan: Ensure requests are addressed efficiently with a plan that includes completion timeframes for tenants and landlords.

• Routine inspections: Go beyond compliance. Regular property inspections are crucial for identifying maintenance concerns, safety hazards and needed repairs before they become costly emergencies.  

• Health and safety: You have a legal obligation to maintain premises to a standard that protects the health and safety of inhabitants. This includes ensuring essential safety measures, such as smoke and fire detectors, are functional.

• Cultivate networks: With your team, build and maintain a network of reputable, insured and qualified tradespeople.

Financial and compliance

The financial stewardship of rental properties demands meticulous attention and strict adherence to regulations.

• Rent collection: Establish clear, legal processes for rent collection. If a tenant falls behind, rigorously follow legal notice-giving and enforcement procedures.

• Trust accounting: Due to stringent compliance requirements, a robust system for managing trust accounts is essential. Leverage software that can automate receipt sending, allow for automatic uploading of bank files and streamline the processing of receipts.

• Legal rent increases: Follow all legal requirements for implementing rent increases, including providing mandated notice periods and ensuring the increase is justifiable.

• Bond management: Handle security deposits strictly in accordance with legal requirements, including filing them with the appropriate agency. Detailed documentation of the property's condition at move-in and move-out is crucial for preventing bond disputes.

• Comprehensive financial reporting: Provide transparent, timely and easy-to-understand financial reporting and end-of-financial-year summaries to landlords.

Legal and regulatory frameworks

Your best practice here is unwavering diligence and continuous learning.

• Master the Residential Tenancies Act: This is your core legal bible.

• Privacy and data protection: Strict compliance with the Privacy Act (1988) is mandatory.

• Anti-Discrimination laws: Ensure equal treatment for all prospective renters. Avoid any discrimination based on protected grounds, such as gender, age, ethnicity or disability, as stipulated by acts like the Anti-Discrimination Act and Disability Discrimination Act.

• Strata and community title laws: You must understand and adhere to specific strata laws and the bylaws set by Owners Corporations.

• Key Disclosures: Be aware of legal obligations regarding "material fact" disclosures, such as asbestos for properties built before 1980.

• Domestic violence provisions: Understand and apply the laws introduced to protect victims of domestic violence.

Conflict Resolution

In a role dealing with significant investments and liveable spaces, challenges are inevitable. Your ability to resolve disputes – and ideally, to prevent them – is a cornerstone of best practice.

• Be problem-focused: Stay neutral. 

• Mediation: Your role is often that of a mediator. Bring parties together, encourage respectful dialogue and guide them to mutually beneficial solutions.

• “Recognise, Respond, Resolve” framework: Master this structured approach. Recognise: Identify early signs of conflict through both verbal and non-verbal cues. Respond: Address the situation thoughtfully with active listening and genuine empathy. Resolve: Collaboratively work towards a solution, setting clear expectations, and ensuring follow-up.

• Support and Tribunals: When disputes can't be resolved in-house, be prepared to navigate tribunal proceedings by providing comprehensive proof of your statements and actions.