If you're a wise real estate investor, you've probably contemplated taking the reins of property management yourself.
On the surface, hiring a property manager might seem like the path of least resistance when safeguarding your investment property. However, the reality isn't always that simple. Entrusting your valuable asset to an inexperienced or unprofessional property manager can be as nerve-wracking as dealing with challenging tenants. In an industry characterised by frequent turnover, you might find yourself switching property managers as often as tenants.
So, the pivotal question arises: Do you want to oversee your tenants directly, or would you prefer to manage the manager? Well, let’s discuss DIY rental management Australia. So, let’s get started!
Table of Contents
Pros of Managing Your Own Rental Property
There are several compelling reasons to consider managing your own investment property. Here's a closer look at the advantages:
One of the most significant benefits is the sense of control you gain over the entire rental process. From tenant screening to day-to-day interactions, you'll be in charge, allowing you to shape the experience to your liking.
Managing your own rental property can lead to substantial cost savings. Many of the decisions a property manager has to make during a tenancy often require landlord approval anyway. By handling these aspects personally, you can avoid the extra fees associated with property management.
Avoiding Potential Issues
Sometimes, entrusting your property manager with significant decisions might seem convenient. However, it can lead to surprises down the road. For example, you might discover that a repair they approved cost twice as much as what you could have arranged independently. Taking the reins ensures you have a direct say in such matters and can prevent unexpected financial setbacks.
Cons of Managing Your Own Rental Property
While managing your own property offers several advantages, there are also some notable drawbacks to consider:
Handling tenant interactions, maintenance requests, and property-related tasks personally can be time-consuming. This can be especially challenging if you already have a busy schedule or if you manage multiple properties. The demands of property management can become an additional source of stress.
Whether you have a property manager or not, issues such as late rent payments, property damage, and eviction proceedings can still arise. Managing these problems independently requires understanding legal procedures and can be emotionally taxing.
To effectively manage your property, you need to be well-versed in tenancy laws in Australia and regulations in your state. Even if you have a property manager, having this knowledge is essential. Mishandling legal matters can lead to costly mistakes and potential disputes.
Potential for Neglect
Property managers sometimes may not effectively communicate with landlords and tenants or address issues promptly. This lack of oversight can contribute to problems and escalate tenant-landlord conflicts.
Stress and Overwhelm
Property management can become overwhelming, especially when done alongside a full-time job. Balancing your career with property management responsibilities can increase stress and reduce work-life balance.
Costs of Property Management in Australia
If you're searching for property management help, it's crucial to understand the associated fees. These fees can differ based on your location, the services you require, and the level of service you desire. Here's a brief overview of what you can anticipate paying for property management.
This fee is the cost associated with the day-to-day management of your property. It includes tasks like rent collection, tenant communication, handling maintenance requests, property inspections, and liaising with the corporate body (if applicable). Management fees are usually charged as a percentage of the weekly rental income, and the rate typically falls from 5% to 12%. The exact percentage may vary from one property management company to another.
Letting fees are charged when a property manager finds a new tenant for your property. These fees cover expenses related to rental property marketing, processing rental applications, conducting tenant screenings, and negotiating lease terms. The cost of letting fees can also vary based on location and the property manager's level of service.
Property rental management companies may charge additional fees for various services or situations. These can include lease renewal fees, tribunal representation fees (if legal issues with tenants arise), statement fees (for providing financial statements), and more. The specific types of other fees and their amounts can vary significantly between property management companies.
Before hiring a property manager, reviewing their fee structure and terms is important. At the same time, property management fees may seem like an extra cost. Still, a good property manager can save you time, take a lot of stress off your shoulders, and increase your investment returns.
Choosing Between Property Management Options: What's Right for You?
Determining what's right for your situation regarding property management involves weighing the pros and cons, considering your preferences, and assessing your level of involvement. Here's a breakdown of factors to help you make an informed decision:
Choosing a Rental Property Manager
- A property manager might be the best choice if you prefer a hands-off approach and don't want to make day-to-day decisions about your investment property.
- Property managers can handle tenant interactions, maintenance requests, and other responsibilities, saving time and effort.
- Ensure you select an experienced property manager, preferably one recommended, to ensure reliable service.
Managing Your Property Yourself
- Self-management could be the way to go if you want direct involvement in your investment property, enjoy interacting with tenants, and seek to save money on repairs and maintenance.
- Being well-versed in your state's tenancy rules, procedures, and laws is essential if you manage your property independently.
- Self-management lets you keenly see the property's condition, enabling you to address issues before they escalate and become costly.
Consider a Hybrid Approach
- If you're uncertain whether to choose self-management or hire a property manager, you can start with a property manager and gradually familiarise yourself with property management procedures.
- This approach allows you to transition to self-management if you feel more confident or switch back to professional management.
- Flexibility is key, as you can always part ways with a property manager or seek their services again based on your changing needs and preferences.
Choose an Effortless Rental Management with Houst
Houst is a rental management company that simplifies handling short-term rentals and long-term lets. They've got your back, whether you're aiming to boost your income with short-term stays or looking for a stress-free way to manage long-term leases. With Houst, you're not just getting a management service; you're gaining a trusted partner who ensures your property is well taken care of.