Investors are increasingly opting to self-manage their investment properties in order to reduce costs. By doing away with your property manager, you could save anywhere from $15 a week on a $300 weekly rental on a 5 per cent management fee to $36 a week for a 12 per cent management fee. This could save you between $780 to $1,872 a year.
But are these savings worth it? It really depends on your ability to handle the workload, responsibility and legal liability risk that comes with self-managing your property. Below we’ll look at some of the tasks you’ll have to handle.
Finding High Quality Tenants
Finding the right tenants is essential for a successful investment property and one of the most difficult areas for self-managing investors. This is because unlike professional property managers, they do not have access to the National Tenancy Database, which allows you to check information such as:
● Tenancy history
● ID verification
● Visa verification (if from overseas)
● Public record checks on court orders and bankruptcies
Without these tools, it is more difficult to find a reliable tenant who will rent the property for a long time, pay on time and create no problems.
Managing Tenants
Managing tenants can be difficult for investors that have a personal investment at stake, especially when conflicts arise. You must be able to objectively and professionally manage the entire tenancy from dealing with complaints to subtracting money from the bond for any damages and evicting tenants for misconduct.
Overseeing the maintenance of the property is another time consuming aspect of managing a property. Regular maintenance and repairs is essential for keeping tenants happy as well as retaining the resale value of the property. Property managers often have established partnerships with electricians, plumbers and other contractors, allowing them to reduce the cost of preventative maintenance and emergency repairs.
Managing Rent
Do you know how to set the right level of rent to attract tenants while keeping with market conditions? To do so, you need a fairly good understanding of the local market and what factors influence the property’s value, such as proximity to amenities. Setting the rent too low reduces your income while setting it too high will deter prospective tenants.
You also need to know how to apply small rental income increments. Under the Residential Tenancies Act 1987, property owners can adjust rent based on local growth, inflation or improvements made to the property. However, this process is governed by strict rules and regulations that you need a good understanding of to stay compliant.
Financial and Legal Considerations
Ultimately, the potential savings are negligible when you consider the sheer amount of day to day tasks you’ll have to complete self-managing your property, from advertising to vetting tenants, chasing rent and doing property inspections.
You need to have a thorough understanding of the state and national laws that govern your rights and obligations as a landlord managing their own property. This includes maintaining accurate records and budgeting for the ongoing management of the property.
Need a Property Manager in Geelong?
Take the stress out of managing your own investment by putting your trust in the local experts. The experienced team of property managers at Hayeswinckle use their understanding and years of experience in the Geelong property market to achieve the best results for their clients.
Get in touch today to ensure your property is expertly managed and enjoy the peace of mind.