If you have an investment property, or are looking to purchase one you will more than likely be considering engaging the services of a property manager and wondering whether it is worth the fee, which varies from state to state but in Brisbane currently averages at 7-9% (plus GST) of rental income received, or whether you can self-manage your investment property and keep this money in your pocket.
In this article, we highlight some key risks of self-managing your investment property, and how a property manager can help to reduce these risks:
Not able to find tenants .. fast
When self-managing your property, you are limited to where you can advertise your property. Not only are Property Mangers able to advertise on real estate portals such as realestate.com.au, domain.com.au and their own websites (such as realty8.com.au), they also have access to a pool of prospective tenants through their own in-house databases of current and prospective tenants, some of whom would be looking for a rental property such as yours.
Find the wrong tenants
Property managers employ multiple levels of screening potential tenants on application. This includes checking national databases such as TICA for defaults, prior applications, checking rental references directly with previous property managers, checking tenancy ledgers, confirming employment and income and contacting all professional and personal references. Thoroughly vetting potential tenants will minimise the risks of having a bad tenant.
Not understanding the legalities
It is critical that before renting out your investment property, you are familiar with the legalities and regulations that comes with managing a property and tenants. This includes things such as swimming pool and spa compliance, smoke alarm compliance, cords, water charges etc. Tenants have rights too and it is important to know what these are to ensure you’re treating them fairly, otherwise you could end up in an unwanted situation.
Not properly protecting your valuable asset
Prior to renting your property out, a thorough inspection, with photographs should be taken of all areas of the house, including fixtures and fittings. This can take a significant amount of time, and not one area is to be missed. Routine inspections also need to be carried out at three monthly intervals, which will involve paperwork and postage such as sending notices of entry to your tenant. You also have to conduct the routine inspection; what if there is a significant problem, or damage to your property, would you know what to do? A property manager is familiar with the processes and will ensure everything is done to properly protect your asset.
Generally Landlords Insurance is more costly if the property is not managed by a licenced Property Manager. In addition, if the requisite strict procedures are not followed ie Breach Notices etc, claims can be refused by Insurers.
Not having the time to manage your property
Self-managing your investment property can take up a significant amount of your time. Preparing the paperwork and legalities may be what you think is the hard work but the reality is that every aspect of property management is time consuming. Some time-consuming tasks include; allocating time to show potential tenants around the property, making time each day/week to check rental payments, making time to take photographs for the bond and regularly inspect the property, addressing maintenance issues quickly, educating yourself on what forms to send and when they should be sent out.
Lack of time is one of the main considerations when self-managing your investment property, which will add to all the dangers above.
All things considered, engaging a professional who is experienced in managing properties is worth the fee, in comparison to how much time it will cost you to self-manage your investment property. Is it work the risk?
Owning an investment property should be stress free. Realty8 are a team of experienced, quality property managers who will take care of your property as if it were their own, ensuring a stress free and successful investment experience. Contact them today to discuss your property management needs.