Self management of IP

G’day Munno,

There are plenty of tools out there to help with tracking rents, expenses, etc with regards to property, but the question is is it worth managing your own IP. In my opinion no, I suppose the whole “To get a property manager, or not to get a property manager” is a bit like insurance, you don’t need it unless something goes wrong.

If you decide to manage your own property you’re going to have to find your own tenants, prepare your own tenancy agreements, collect bonds, collect rent, chase late rent, take phone calls from disgruntled tenants, arrange your own repairs, go to VCAT (if needed) etc etc. For mine, the 5-6% I’m paying my property manager is worth it, especially if you’re planning on holding more than one IP, I’ve just factored this into all my feasibility studies.

Up to you to decide whether its worthwhile or not, but I’d stick with the professionals, just like I wouldn’t draw architectural plans myself, I pay professionals to do the tasks that they do best and are qualified for.

D.

Interesting to hear Wylie, as I said, I think its like insurance, you don’t need it until something goes wrong [biggrin]

Could be wrong, I’m still pretty new to the game, each to their own.

D.

RTA is Residential Tenancies Association. I don’t know how to put a link but a Google search will bring it up. I don’t know where you are but I assume each state would have a similar site. They explain what you need to do at the start of a tenancy, what forms must be given to tenants etc. You download the forms, fill them in on the screen and print them out. It would pay to sit down and have good look at the appropriate site for your state, to feel comfortable with the requirements.

As far as being like insurance, not needing it until something goes wrong – we certainly have had things go wrong, but I read quite often on this forum about things going wrong with managed properties as well. We have had some issues, and they can be stressful, but I feel very much in control and I know what is going on with my tenants.

If you have tenants already lined up, why not save yourself lots of money. If you feel down the track that it is too much work, hand it over then.

For us, we advertise, put a tenant in and generally leave them alone. We don’t do inspections, with the exception of the rare occasions that things go pear-shaped. However, we do live nearby and can do the occasional drive past check. Our houses are in good condition, so we only have to deal with the occasional plumbing issue or similar.

I would never want to pay 8% or so for a manager to do as little as we need to, but I fully respect those who do. I grew up with my parents having IPs so it is second nature and I understand that others feel differently.

Wylie

Hi

http://www.fairtrading.nsw.gov.au

Select the real estate & renting link on LHS and go from there. It tells you about the rights and responsibilities of the landlord and tenant, what is required to self manage etc.

Regards

Wake

I have read in other answers on this forum that you can buy a kit for about $10 or so from newsagents (or maybe it was post offices) in some states. I have always wondered why people don’t download them for free, but maybe RTA Queensland is just generous. Could this buying from a newsagent be the answer for NSW forms?

Wylie

G’day Paul,

10% seems pretty high for property management fees, we negotiated down to 6% as we were building a house at the back and the property manager wants to get it once its completed, but her normal rates were around 7%. Its a very competitive industry, so negotiate, advise them you are a property investor in the area and are looking for a property manager to manage your portfolio as you build it and I’m sure they will give you very competitive rates for your business.

Dave.