Many aspiring landlords believe that owning a rental property is an easy way to build their nest egg; simply purchase a property, collect the rent and sit back and watch your asset increase in value whilst your tenants take care of it.
If you’re lucky this scenario may come true, but if you’re counting on retiring on the resale of your investment property once you retire it would be wise not to leave things to chance. While managing your own investment property can be highly rewarding, it can also prove to be challenging, time-consuming and in some cases, very stressful particularly if you find yourself with problematic tenants.
So just what is involved with managing your own investment property and should you hire a professional property manager?
Landlords now have access to property websites, apps and social media enabling them to easily advertise their own rental property. While taking this route can save money, there is also an entire process behind securing a tenant. Open for inspections will need to be conducted, applicant background checks need to be done, lease agreements need to be drawn up and payments, including bond, must be organised. When you secure the services of a property manager they will take care of every part of the rental process including tenant screening and completing all the necessary paperwork.
When self-managing your own investment property you run the risk of setting the rent at a rate you want rather than what the market average is. This could result in your property remaining empty for large periods of time. A property manager will assess your property and advise what the correct weekly rent should be for the features, suburb and location as well as when the rent should be raised.
Owning a self-managed investment property means you are likely to be contacted by tenants at any time of the day or night. While they may contact you with legitimate issues such as critical items that need repair i.e. broken heating or hot water, they may also contact you with inconsequential requests such as changing a light bulb. If you choose to self-manage your property you could spend a lot of your time liaising back and forth with tenants or sourcing and project-managing contractors.
Saving money on management fees is an enticing prospect for a landlord, along with being able to keep a close eye on the property and the tenants to ensure your investment is being maintained to a high standard. However, there can be a downside to being accessible – you may find it intrudes on your personal life or you develop a friendship with your tenant resulting in the ‘business’ arrangement becoming ‘hazy’.
An experienced property manager will not have an emotional attachment to the property or the tenants and will be able to remain independent and professional. They should ensure urgent repair requests are dealt with in a timely manner, non-urgent repairs or maintenance are managed throughout the tenancy and any costs are handled appropriately. They will also be the go-between you and the tenant should anything out of the ordinary arise.
Unless you have plenty of experience at managing tenants it’s advisable to hire an expert property manager. They will take the guesswork, stress and time associated with managing one of your biggest assets out of the equation. Costing approximately 7-10% of your total rental income each week, their service can be worth far more than their fee and is tax deductible.
Need an expert property manager? Contact your nearest Noel Jones office today.