One of the biggest considerations when it comes to the day-to-day requirements of your portfolio is whether to self-manage or outsource – what's the right choice for you?
Do you really need to appoint a property manager? Isn’t there an app for that? How hard is it to give tenants your account details to pay their rent and then pop by every few months to check on the place, right?
There certainly are rent tracking and inspection apps out there helping property managers become more efficient, apps that you too can also use to manage your property. But what about when rent is late, you notice the tenants stopped watering the lawn, or the tenants move out part way through their lease, leaving the property in a mess? When it comes to the dirty work of negotiating, policing, and holding tenants accountable, this is when having a property manager is worth its weight in gold.
Deciding between appointing a property manager or managing the property yourself almost always comes down to value. Here are just a few ways by which a property manager can be seen as valuable:
1) Provide peace of mind: The main job of a property manager is to ensure that the property is kept in the same condition as per the commencement of the tenancy and, if not, hold the tenants accountable for rectifying it in accordance with the Residential Tenancies Act (RTA). When things go wrong, you can sit back and know that a qualified and trained professional will take care of it.
2) Protect the value of your investment: Using a property manager can cost approximately 10 per cent of your total rental income each week, which is why some people may consider self-managing a property. The cost of loss of rent or repairing tenant damage can far outweigh the management fees. And don’t forget, all property management related fees are tax deductible.
3) Provide time savings: Managing a tenancy and the upkeep of a property is a lot of work. It requires a high level of commitment, time or the inclination to learn multiple professions. Property managers deal with contracts, collect rent, organise repairs and maintenance, conduct property condition reports, regular inspections, bond inspections, and provide income and expenditure reports for your accountant, just to name a few of the main tasks. It truly is a part-time job if you have or plan to have a few investment properties as part of your wealth portfolio. Using a property manager can make your life easier, and allow you to spend your time doing what you want to be doing.
4) Access to advertising/marketing: Several of the most popular real estate search engine sites are subscription only. A licensed agent will have subscriptions to advertise on these sites to reach a broader audience. Higher visibility will reduce your vacancy and income loss. The initial set-up of a tenancy can be time-consuming and costly if not done correctly. Gone are the days (in Perth at least) where you rent the property by holding one open home. It’s taking on average four weeks of sporadic viewings, at times that suit prospective tenants (not you), to finally secure a tenant.
5) Knowledge of the laws and regulations: Property management is one of the most heavily regulated industries out there, with procedures being governed by several acts. Knowing timeframes for issuing notices or if you must use a prescribed form based on the RTA are just some of the regulations that must be followed.
6) Provide industry expertise: Finally, a proficient property manager has a strong working knowledge of the rental market, resources at their fingertips and the experience to diffuse difficult situations before they become problems.
The decision to make is whether you want to be a property investor or a property manager.
It’s difficult to concentrate on growing your wealth when you’re running it. Having boots on the ground working for you comes back to value, whether it be protecting the value of your property or reducing your valuable time spent on the investment. A great deal of responsibility and skill goes into managing a rental property properly. In actual fact, when you consider the true value of the time you may spend yourself, the costs of professional management may be a small price to pay.
Lisa Larsen has over 10 years of business and property experience in both Canada and Australia. Lisa has crafted Benchmark Specialist Property Managers into Joondalup’s premium property management company. Benchmark services Perth’s northern corridor, offering landlords boutique and personalised services unmatched by traditional offerings. Lisa is a thought leader, and an advocate for business morals and integrity, actively engaging in the community she calls home.