Private Rent vs Agent Managed

We privately rent. It has been working out fine – tenant pays straight into our bank account. We charge slightly below market rent (as we don't pay fees). She appreciates this and has used this money towards a gardener, fantastic for us as the property is very well kept and presentable.
The property is a 3hour drive away.
So far – so good for us.
Edited to say – she pays fortnightly by direct debit, which we agreed to as she gets paid fortnightly (better for us)
Cheers

Hi

The biggest issue I see with some property investors is becoming to emotionally attached to both the property and the tenants.  Spend your time earning income to fund your next property venture rather than get tied up with the ins and outs of dealing directly with the tenant.  Time is money – a good property manager makes the investment more passive.

Hope this helps in making your decisions.

When I first started investing in property, I privately managed my property. I found it very hard to increase the rent. I also found that the tenants seemed to ask for things a lot more since they had direct contact with me. They would ask for things like curtains instead of drapes in the bedroom, vinyl instead of carpet in the lounge…the list goes on. When the lease ran out, I got a property manager and they marketed the property $25 per week more than what I had it rented. Since that first property, I have put all further property purchases with a property manager. I would recommend getting a property manager as I think they pay for themselves. They usually know of good maintenance people and it saves you having to receive calls from a tenant at inconvenient times.

Hi J

Just the other day i posted an article on my blog about this exact question.  Ive posted it below if your interested

CHAPTER 8.  LEASING YOUR PROPERTY

When you are leasing out your property you will be faced with two main options. You can either employ a real estate agent and let them do all the work for you – or you can rent it out yourself. There is no right of wrong answer; it simply depends on your situation.

The Positives of using a Real Estate Agent when leasing out your property.

– You will be able to completely forget about your investment property and concentrate on new and more exciting things (like figuring out how you can buy your second investment property

– Real Estate agents know what to look for in tenants and ‘should’ be able to pick a high quality tenant.

– If something goes wrong they will be there to fix it. If you live a very busy life the last thing you want to have to do is fix a leaking tap after work.

– They will handle all the paper work and rental agreements.

The Negatives of using a Real Estate Agent when leasing out your property.

– The most obvious negative is the cost. Most real estate agents will charge you a management fee of 7.7% of all rent, plus a set up fee of 5.5% of the annual rent.

– Therefore if your tenants were to move on every 2^nd year you would pay 10.4% (on average) of your annual rent to your Real Estate agent.

– So if you were renting your house for 300 per week you would pay the real estate agent $1622 per year out of your annual rental income of $15,600.

The Positives of leasing out your property yourself.

– You will save money.

– You will be able to oversee all maintenance and problems which will probably mean that you will be able to save some money on repairs (especially if you are a bit of a handy man/woman).

– You can personally choose the tenant and find someone that you think will suit the property. Don’t underestimate the ‘good’ feeling that you will get when you make somebody very happy by giving them the opportunity to live in a great house.

The Negatives of leasing out your property yourself.

– The main negative is the ‘time’ factor. If you live a very busy lifestyle it can be annoying if you are constantly getting phone calls from your tenants.

– You will need to organize your own rental agreement and lodge a bond. This is much easier than it sounds and all the relevant information is readily available on the internet.

The Answer?

It really comes down to deciding what is more important, your money or your time?

If you do lease out your property yourself I think the best way to look at it is to think that you are employing yourself. If we use the above example you would basically being paid $1622 per year to be your own real estate agent. If that sounds like a pretty good deal then I would have no hesitation in recommending that you lease out your property yourself. Best of luck.

Are there any private managers on the forums subscribe to Tica or other similar reporting agency's?

I would appreciate any opinions both positive and negative.

Thanks Mick

Thanks Jac,

$22 is a lot cheaper than Tica anyway!

Veda own the site and they are one of the main credit reporting agencies so should be credible.

If the insurance is more expensive that says it all, its higher risk.

Pleasure

Hi,  We privately manage our investment properties that are 2 hours away from where we live.  We previously had them under management but found they were not actually managed at all.  We have found it much better to manage ourselves and everything is contractual and done by the law.   God luck

There are heaps of great opinions and advice in this post.  I think that a PM is easier IF they are professional and do what they are supposed to do.  I am very happy with my current PM but I have been on the receiving end of a poorly managed property.  It turned into a nightmare and eventually in court.  One good outcome was that we were very particular about the next one we chose.  We went to everyone available in the area and there was one that just stood out above the rest.  It pays to do you homework.