realestatebusiness logo

Breaking news and updates daily. Subscribe to our Newsletter!

Home of the REB Top 100 Agents
Breaking news and updates daily. Subscribe to our newsletter

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

rpm logo latest

Increasing earning capacity during property transition

By Deborah Mitchell
09 September 2015 | 1 minute read
Deborah Mitchell

There are certain questions that should have been posed to the client prior to the vacate process, perhaps at the previous scheduled routine inspection, concerning the condition of the property.

Maintenance issues are best sorted when the property is empty during the transition from one tenant to another.

So it's time to spruce up the investment property to achieve the proper weekly rental for this property. Or do we just rush a tenant in? Who’s responsible for having this conversation with the client? Is it the principal, or does it depend on who does the routine inspections for the office? Ideally, the property manager should be having this conversation with your clients. Included with the inspection reports should be photos that support all relevant information from the routine inspection.

As the current tenant is nearing the end of their tenancy and decides not to renew the lease, take control and have the conversation with your client. The short-term monetary pain will be rewarded over time. This activity should increase the rental yield for the property. 

I see to many unmanaged properties on the market. The client will often believe that the property had new carpet just two years ago or painted between this tenant and the previous. Check the records: they may prove that the client had forgotten it was more than five years ago or, in fact, that the client is correct.

What if this property is a new management and you don’t have the records to go over? Perhaps ask the client to look through his/her records so that you can place the dates within your system to assist with the monitoring of the property. The more information you seek from a client, the more you appear interested in maintaining the property at its optimal earning capacity. Now, what client would object to that?

Each passing year of no general upgrade to the property detracts from the earning capacity of that investment. Would a stock broker be allowed to wander through each day and not make suggestions on improvements to their clients' stock portfolios? Investment properties are most clients' retirement portfolio options, so take responsibility and show your clients how not making general improvements to their investment will erode earning capacity.

Suggested improvements should include: re-painting the house internally or externally; re-carpeting; bathroom renovations; kitchen appliances; roof repairs. This list should be drawn from current routine inspection reports. At times it may mean talking to the principal if the maintenance is exceeding the earning capacity or perhaps selling this property and purchasing one or two investment properties that require little or no maintenance. This conversation is not for the property
manager unless you have had the training to make such a call. 

The office retains management, however, if this is dealt with professionally, then the office will also be engaged in the sale of the original property and the purchase of the next investment property. Is this always possible? No. Your client may not be happy about having the conversation, but experience will tell you if you should be having this conversation with your client or if you should peruse another line of conversation.

Increasing earning capacity during property transition
deborah Mitchell2
lawyersweekly logo


Deborah Mitchell

Deborah Mitchell

Deborah ensures compliance of management systems through conducting weekly and monthly audits, staff training and coaches, mentors and trains asset management

teams. She ensures her clients gain growth within their market place.

Previously, Deborah has helped guide asset management teams to achieve high levels of professional and personal satisfaction. Now she assists principals to gain a higher return on their investment, as well as assisting with strategies on retention of staff and managements alike, by enhancing productivity and efficiencies within the workplace.

Listen to other installment of the Real Estate Business Podcast
May 09, 2022

REB Top 50 Women in Real Estate 2022

REB is thrilled to present the Top 50 Women in Real Estate 2022 ranking, which sets t ... LEARN MORE

May 04, 2022

REB Top 100 Agents 2022

Now in its second decade, the REB Top 100 Agents 2022 rankings are the most revered s ... LEARN MORE

May 02, 2022

REB Top 50 Agents NSW 2022

Even a pandemic has not put the brakes on the unstoppable property market in NSW, whi ... LEARN MORE

April 27, 2022

REB Top 50 Agents VIC 2022

The COVID-19 crisis has not deterred the property market in Victoria, which has been ... LEARN MORE

April 25, 2022

REB Top 50 Agents QLD 2022

As the property market continues to roar in Brisbane and Queensland, the REB Top 50 A ... LEARN MORE

Coming up

rankings rankings
Do you have an industry update?

top suburbs

12 month growth
Bawley Point
Walla Walla
Byron Bay
Kiama Heights
South Hobart
Lennox Head
Subscribe to Newsletter

Ensure you never miss an issue of the Real Estate Business Bulletin.
Enter your email to receive the latest real estate advice and tools to help you sell.