Turning Property Management Disasters Into Appealing Investments

Ever found yourself in a property management pickle? Get ready to gather vital insights from my recent experience that will prevent you from falling into similar traps while enhancing your property's potential. As the owner of Exclusively Managed, I've seen it all, and this episode unravels how our team turned a disaster project into an appealing investment property.

Brace yourself for a fascinating account of how we conquered a challenging situation, where another agency’s negligence led to substandard work, causing a potential health risk for tenants. From dealing with mold issues to poor tiling, join me as I walk you through our process of coordinating with contractors to fix the mess urgently. Let's explore the art of renovating properties, striking a balance between timeless and minimal aesthetics that don’t drain your wallet. Experience an exciting world of property management and renovations that'll ignite your interest and enrich your knowledge.

https://www.exclusivelymanaged.com.au/enhanced/

If you have any questions or scenarios you would like us to discuss on an upcoming episode, please email samantha.eason@exclusivelymanaged.com.au or visit https://www.exclusivelymanaged.com.au/

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Transcript

Speaker 1: 0:33

Hi, it's Samantha here again with Talking Property Management, and I know I've been a little vacant from the air, so to speak, but we've been just having a very busy couple of months and I want to talk to you today about what I've experienced over the last couple of months. But firstly, exclusively managed, which is the agency that I own and operate in Brisbane, has opened its enhanced side of the business, and we've been doing this for the last few years, where we work with our clients on enhancing their investment property and, with the enhancements, we look at it from. What is everything that the property owner is required to do to either get it up to minimum, like minimum housing standards, safe housing and all of that, as well as what is required to get the most out of this property, whether it's from a capital growth point of view or a yield point of view. We do look at their cash flow and see what is the best thing that we can do. Sometimes we will just do a cosmetic reno, but lately we've been working on a few full renovations, where one in particular has had the external completed, the internal bathrooms, kitchen flooring, painting, electrical, you name it just absolutely everything, and others that we've been working on are just having small cosmetic upgrades, where that may be just the electrical, maybe blinds updated and the carpets, maybe a little bit of painting. It really depends on the client's requirements and what we need to do to either get it to the stage that it needs to be in to meet with all of the other properties online, or we get it ahead of the market.

Speaker 1: 2:31

Now, on the enhanced side of the business, we do work with a very close knit of trades. We've been working with them for years and that is our relationship with our trades. We are able to get very competitive pricing, but also they know the importance of, I guess, a strict timeline and needing to get these properties ready and actioned straight away, because, at the end of the day, we will have a tenant needing to be moving in by maybe the end of the month or we need to get it on plan to advertise by a certain time. Now, one in particular that I want to talk to you about and this still blows my mind. I cannot believe that this happened, but an agency that we took this property over used an unlicensed trade. It was a franchise agency and that property manager organised waterproofing and tiling of a shower space by an unlicensed trade. Now, unfortunately, when I came to inspect that property at the start of the year, the work was not to standard at all. The tiles weren't even to the space. It was not a good outcome. The mould was still coming through to the property, so we had to engage contractors to urgently look after that so that it wouldn't pose a health and safety risk for the current tenants. Now this tenant could not afford to move. They love the house, they want to live there forever. They physically cannot afford to go anywhere else. So we had to work with them on ensuring that we could meet together and then work out a plan. So I want to talk to you about what we've done with this renovation.

Speaker 1: 4:19

So this was a bathroom renovation that we unfortunately had to complete. It was more economical to do a full bathroom renovation due to the state or the age of the property, I would say and we got our trades into quote in September. We worked with the tenants. They preferred that the work was done in November. So on the 6th of November we had trades come in to confirm if there was a spestos in the space. There wasn't, so work was able to proceed.

Speaker 1: 4:52

We then, on the 6th of November. We then had, I guess, the demolition start. So everything was tidied up. All the materials were checked that we organized for the client. We use aqua bathrooms for all materials in bathrooms where possible. The reason is we get a much better product than if we were to go to Bunnings and at the end of the day we need to keep our renovations and enhancements in a minimal state. It has to be timeless. You can't fit to a certain era or style because it may not be in in a couple of years' time defeats the purpose.

Speaker 1: 5:35

And then what we've done from there is a couple of days later the Tyler came in. They had to set the tile bed. That does take a day or two, depending on the weather, to dry. From there we're able to waterproof, then tile. So these tenants last week had full use of their bathroom and we started on the 6th of November. All that's left to do now is the shower screen and that's been scheduled in for Friday for installation. The painting's all been done, the new bath is in and this client was able to achieve $150 more in their weekly rent to meet it to market.

Speaker 1: 6:17

The tenants have obviously been looked after during this time because they have been inconvenienced. But they worked with us on what they wanted to do because I did explain to them that the nature of the renovation, it is best that they vacate, but we couldn't put them in a position that they could. They physically didn't want to. So they're more than happy to use, I guess, other external bathroom measures to make this work. The one thing that they did request was that they could use the toilet through the space and obviously we had to retile and put it in a new toilet. So we've done that, but in a way that they can still use the toilet from the moment that the old toilet gets ripped out, quickly tiled and we were able to put the new one in.

Speaker 1: 7:02

And I'm going to be completely honest, we would not have had to do this if the original property manager completed or had a licensed waterproofer and Tyler complete the repairs associated and required this time last year the work. Last year it took two months for the work to even begin. As I mentioned earlier, the tiles were just in the shambles on the wall. The walls weren't, the space wasn't waterproofed properly. They had to replace some sheeting which was not done correctly, and this is why we've focused so much over the last couple of months on our enhanced side of our business.

Speaker 1: 7:49

So we work with our clients. They get to pick and choose what is required or what fits with the catch flow, or get in a place where they can use the toilet. So we're going to be able to get the catch flow of getting a property ready and what they need to do if we can work in a renovation or an enhancement, depending on the timing of the year and with our trades. But also it gets us to a point where we can go. This is what we can achieve for your property. But if you don't want to do this now, we can do it later, and it's really important that you do have someone doing an enhancement. It's all about the people that you know.

Speaker 1: 8:30

So with our bathrooms, for example, the clients can choose if they want extra, and this is the same with our kitchen renovations. The clients can choose if they want something different than our standard, but we include a standard wall and floor tile. If they want to go above that scope, it is at their cost, but that is something that we've been able to achieve with our relationship with our trades, whereas Normally the trades would require that they pick and choose their own tile, but we've been doing this. We need it to be minimal. We know what products work and so we're able to use them. The same with aqua bathrooms, who I mentioned before. They are absolutely fabulous. We've not had one issue with in like product or manufacturing. The products that come and the items that come for our bathroom and kitchen renovations are just beautiful and they look really modern, neat and in really good condition. We're able to pick and choose.

Speaker 1: 9:36

Absolutely everything is required and it's a really important aspect when it comes to renovating someone's property is that you are able to look at it from a whole picture. Work with that space and go. What we could do is this and it will better enhance that room. One of the things that I have noticed when working with other agencies or generally how property managers are trained, is that you don't look at it from a big picture aspect. It's like let's just get what's broken fixed and nine times out of 10 you may have a 50 year old property that needs a full bathroom renovation and most property managers wait until the client's ready. They don't mention it and put their foot forward to say this is what we can do to help you achieve more. They just wait until the property owner goes oh maybe I should renovate the bathroom, and then they have to source their own trades, the tenants. The property is vacant in that time and there's generally no project manager on board, and it's probably one of the biggest issues we have in the industry.

Speaker 1: 10:45

So I think stepping into that side of things and having an experienced team, like exclusively managed, who deal with this on a day-to-day basis, we're able to completely take control of the whole renovation and the project and go, this is what we're going to do. This is when it starts from this. We've got this going on. You'll receive heaps of updates. Come on site if you want to do anything, you can. Let's work on achieving the best result. We absolutely can and you know sending a handyman in to constantly I don't know tighten or fix something in a bathroom that is falling apart, and then the owners can't get rent that where everyone else is in their suburb because their property hasn't been updated to reflect the market value.

Speaker 1: 11:37

That's the issue. That's a massive issue and you lose trust with your clients that way. From me being able to go to a client who's who's got a 50 year old property and go. Hey, your previous agency tried to do a bathroom like a shower repair. They used an unlicensed trade. We already know that the work is really, really bad. I don't want to do things twice, but in this unfortunate situation we're going to have to. We're ripping out your whole bathroom. We're starting from scratch.

Speaker 1: 12:09

This is what I would like to pick, but if you would like something else, let me know. Let me know what color scheme you like. I think this will work better for you long term and I'll organize all the materials, I'll organize the trades and I'll organize the project. I think, doing it that way, you're able to actually get your client to make some money. That renovation will be paid off within a year of the rental income, or two to three, depending on where they were previously and what they can get now.

Speaker 1: 12:42

But if you're working with an agency that's able to actually take control of an owner's investment and go, let's strategize, let's put you where you need to be. I understand that this is difficult. Let me take all the stress. Let's look at alternative methods. We may not need to get a cabinet maker in. We could probably go through caboodle and bunnings. We can do that. It's all down to who you know and what methods they use, but nine times out of 10, your property manager normally won't want to borrow of it.

Speaker 1: 13:16

And the enhanced side of exclusively managed is probably my most exciting part or like bit that I've created with the company. It's amazing. It feels fantastic being able to go to a client and say this is what I think, and they be blown away with the results and go. I was not expecting that. I wasn't expecting it. I didn't think it would look like this. That's a really amazing feeling for someone and they get to make money out of it as well.

Speaker 1: 13:49

The other thing is we are in a position where so many people don't understand the design aspects. I've walked into so many properties that have a subway tile, brick looking splashback. It's been done, move on. You need something timeless, you need something minimal and you need to be able to make a space a home, and that is why I'm so excited to be able to come back after a bit of time off the podcast air and speak to you about our changes. We're in a new office location, we have a design studio that we're able to bring clients into now and we can go through every single bit of their renovation, bit by bit. I'm excited for that. And even if they're interstate, we can do it via Zoom. We can be there every single step of the way. Tell me another property manager that does that. Tell me where you get free project management and interior design from your real estate agent, where everyone else would just refer you to a project manager or an interior designer and you have to pay thousands of dollars. We're all about and exclusively managed.

Speaker 1: 15:09

I am so much about like ensuring that our clients investments are profitable, that they're sustainable and that they work. That's it. That's all I care about. So to be able to actually do this with our clients and work with them, I couldn't be more excited, and I'm very excited to start 2024, after next month, with this in mind as well. And if you are in that situation where you need help with your investment or you don't know where to start, or you've got a small budget and you just wanna do maybe the most that is required, we're here, we can help and I can't wait to hear from you. So thank you very much for listening to this episode today. Thank you for your patience while we've been off air, busy setting up and finalizing a few renovations. I am very excited for everything that's coming up and I can't wait to tell you all about it next. Thank you,