Investor in focus: Guy Williams, part three

Investor in focus: Guy Williams, part three

As we learnt during our first two conversations, Guy is not interested in managing the day to day operations of each property within his portfolio.  His day job and passion is operating a successful corporate training company, The Training Guys.  He does however treat his property portfolio as a business and as such chooses to employ a team of professionals to help manage the routine running of his investments.  Guy would rather spend effort in his property business acting as a CEO might, focussing on high level considerations, such as strategy and growth.  He chooses to spend his time researching and purchasing perfectly located properties to add to his ever-expanding portfolio.  One part of the team working for Guy in this process is a slew of proactive property managers, who play a pivotal role in giving Guy back his time to work on the bigger picture.

Guy believes that the working relationship with his property mangers should be extremely effective.  The reason being, he suggests is “because fundamentally there is a synergy between his interests and theirs.” Property managers, “have a vested interest in placing a really great tenant in a property.”   It makes sense that a good agent will work hard, “to find a tenant who will pay the maximum rent, pay it on time - a tenant who will not damage the property or generally be of any trouble.”  It is also in a property manager’s best interest to find a tenant as soon as possible as their fee is dependant on this in the same way that Guy’s rental income is.  Alluding to this shared interest, Guy argues that, “this is why it works.”

From the outset, Guy makes it clear to his property manager that he has a buy and hold strategy.  Once again, It is therefore in the agent's best interest to “vet the potential tenants well, as if they do not they will inherit the hassle over the long term.” Guy gives the example of a property he has held in Chatswood in which he has had the same tenant for 20 years. People often ask him, “Why don’t you manage the property yourself?” and Guy always answers that he did not know that this would be the case from the outset.  With this unknown in mind, ultimately Guy believes the, “6,7 8% cost or property management, if the agent is doing their job well, is money well spent, within the business.”

Get the selection process right and you're mostly there 

Finding the right agent is obviously the next step.  When purchasing a new property, Guy gives the selling agent the first possible refusal on managing the property.  Through the process of dealing with them through the buying phase, he can assess their behaviour in terms of customer service, over a period that often extends up to 6 weeks including settlement.  For Guy, “words are cheap.  Every agent is going to tell you how wonderful they are, and what good customer service they provide”.  Guy would rather make his decisions based on their actions arguing that,  “the way the agent behaves and conducts their business during the selling process is a great insight into how they will behave and act if they were to manage the property.” 

During the settlement period Guy will also carry out some additional research in regard to other property managers in the locality. He will then go back to the original agent armed with this information to “negotiate the best rate possible - whereby it becomes a numbers game.”

At this stage of the process, Guy will also negotiate in regards to the severance period - generally set at 90 days; he will try to cut this down to approximately 30 days. While he often finds that a property manager will try to push back at this request, at this stage of the conversation the agent is keen to get his business so will usually oblige.  He believes that  “if the manager is as great as they say they are, then the severance period should not be of concern to them.” Furthermore  “if they’re not performing, [he] doesn’t want to have to wait 90 days to move on.”

Evaluation is critical

While a property manager might promise the earth when you are a prospect, it is important to have an evaluation process in place to make sure that moving forward, they live up to your expectations.  For Guy, proactivity is key.  Firstly Guy looks at how proactive the agent is in setting the rental level. For example, if a property is not renting, then it only goes to reason that the rent needs to be adjusted. If one of his properties “sits vacant for a couple of weeks and the agent does nothing and waits for [him] to get in contact, [he] doesn’t see it as a very good sign.”

Guy also requires his property managers to be “his eyes on the ground,” as in most cases he has not and will not visit the property himself.   Therefore they need to be astute and proactive in picking up on necessary repairs when they conduct their inspections.

Progress reports are also very important to Guy, which he believes help ensure maintenance issues are kept on top of.   Guy believes providing a well maintained property will usually lead to happy and settled tenants which is an extremely valuable asset - “if the tenant feels like it’s their home – then it’s likely they will stay”.  A tenant that takes pride in the property will progressively add value to the property.  Perhaps they will keep the garden tidy or even undertake minor repairs themselves.  

He gives a great example of the strategy in motion – he had a tenant in his property in Wodonga who asked for the house to be re-painted and the carpets replaced throughout. He was happy to oblige however he negotiated a higher rental fee due to the fact that the home had changed significantly. Fair being fair, the tenant agreed to the increase and Guy attended to upgrades, which ultimately increased the value of property - an excellent overall outcome.

Let a Property Manager work autonomously and maximize efficency

Once Guy is confident that his property manager understands his objectives, he is happy to let them act autonomously under the umbrella of some set parameters.  While there are the obvious legal requirements, which must be attended to immediately, for example a gas leak, urgent plumbing or electrical issues, Guy is happy for, and in fact expects his property managers to arrange for minor repairs to be carried out as needed.  Anything under or around $500 should be implemented without his consultation. Where a job blows out to around $1000+, he will ask his manager to obtain a few quotes and then choose the best option. Guy believes this system works extremely well given his agents have access to local tradesmen and will generally have existing on the ground relationships.  With these parameters in place, maintenance can be carried out efficiently and Guy does not have to spend time thinking about the small stuff.   Small invoices can also be paid by his property managers directly out of the property’s rental income. 

Looking after the day to day running of such a large portfolio is made possible for Guy with the help of a team of carefully selected property managers who understand Guy’s philosophy: if a tenant feels like the property is their home they are more likely to stick around. Guy considers his tenants as long-term prospects.   By giving them a reason to be house-proud, they are more likely to be so.   By ensuring his property managers are on board with this goal from the outset he can count on them to help him realize this objective.

Stay tuned for part four of our investor in focus series, where Guy talks about how he secures finance for his prolific property portfolio.

Subscribe to our newsletter

Weekly updates Weekly headlines, delivered to your inbox

Join the conversation!

Suggested Stories:

Investor in focus: Guy Williams, part one

Investor in focus: Guy Williams, part one

Investor in focus: Guy Williams, part two

Investor in focus: Guy Williams, part two

Holiday rental vs long term lease

Holiday rental vs long term lease

Webcast Recording | Guy Williams in Focus

Webcast Recording | Guy Williams in Focus

Investor in focus: Guy Williams, part four

Investor in focus: Guy Williams, part four

Tenancies part 1- finding a great tenant

Tenancies part 1- finding a great tenant