Are you self-managing your own Investment Property?
An investor should consider the following when deciding whether or not to manage their own property:
DO YOU HAVE THE TIME?
- Scheduling and attending the home opens, reference checks, drawing up the lease and completing bond lodgement forms as well as attending the lease sign up and doing the property condition report.
- Conducting regular inspections and the final bond inspection.
- Tracking rent payments, lease renewals and rent increases.
DO YOU KNOW THE LAW?
- Many owners will be unaware of the new legislative changes to the Residential Tenancies Act. The courts expect a property owner to know.
- New tenant MUST receive copies of a Property Condition Report within 10 days
- What happens to the final bond report?
- What are the BOND requirements?
- Vacating and evicting tenants
- Breaching the Act can result in fines ranging from $1000.00 to $10,000.00.
ARE YOU REALLY SAVING MONEY?
Another misconception about self-managing your property is that it will save you money. This is almost NEVER the case.
- Private landlords are more likely to have a bad tenant as they don’t have access to the databases that property managers do to check on an applicant’s rental history.
- A badly damaged property can result in long periods of repair with the associated costs if a poor tenant has been let loose. The time and cost of attending court to seek recompense must also be considered
- Private owners have limited resources to advertise their property with many private landlords only exposing their property to 10% of the market.
- Delays in leasing a property cost money if the property is not advertised in as many avenues as possible. REMEMBER, the cost of property management is a tax deduction.
- Capital appreciation is the bottom line for property investors. Rental return is low when compared to capital appreciation over the longer term. Make sure your property is well maintained and not damaged to achieve the best capital return.
KEEP AN ARMS LENGTH RELATIONSHIP WITH YOUR TENANT
- Many private landlords get into trouble by not keeping their tenant at arm’s length.
- A few tenants will see a close relationship with the landlord as an avenue to allow them to fall behind with their rent.
- Some landlords believe they can “drop in” on the tenant and not allow the tenant their legislated right to “quiet enjoyment”. This can lead to court and the loss of the tenant and subsequent rent.
- Some tenants can be very demanding if they see they are dealing with the owner and may want unnecessary costly repairs and capital items to be installed.
OTHER ISSUES TO BE CONSIDERED
- Private landlords are generally unable to check a prospective tenant’s past rental history on a database
- Tenants litigating and lodging complaints with the Department of Consumer Affairs have become increasingly common.
- A good property manager will have access to good professional legal advice.
- Legislative requirements now require the use of numerous prescribed forms – professional property managers have access to such forms.
WHAT GOW PROPERTY DOES BETTER!
- Consistently lower vacancy rates than other agents because they show properties after hours and on weekends as well as caring for your investment.
- A zero tolerance approach to rent arrears
- Use of top technology to provide fast and accurate service
- Property Managers who are focused on the investor’s requirements
- Property Managers who critically assess your property and advise on ongoing maintenance
- Property Managers who regularly inspect your property