From economic downturns to interest rate upturns, in the world of Real Estate we’ve seen our fair share of battles – none more puzzling than the fight of investors who choose to manage their own properties, and the myriad of issues that come along with them. Most of us struggle to keep on track with our own professional and home lives, let alone keep up to date with tax statements, evictions, maintenance and the ins and outs of the Residential Tenancies Act.
If you’ve invested in property, have a think about the following when deciding whether to go it alone, or to bring in a knight in shining armour:
‘Big ticket’ investments are about long-term wealth creation, so you’ll need to think long-term when weighing up the costs involved in managing your property like the business it is.
While self-managers save on management fees today, it’s tomorrow’s costs that’ll have them running for the hills: from advertising the property to the costs involved in seeking tenants, drawing up legally-binding agreements and addressing maintenance requests, all of these duties are infinitely more cost-effective when done on a commercial scale by a well-connected industry professional.
When you consider a quality property manager charges just 7.7% of your rental return, including GST, sometimes you’ve got to spend a little to save a lot. A property manager’s fees are always in line with the nature and scope of services they provide – they’re also often tax deductible, as Infolio’s Lauren Staley discovers (Cost of a Property Manager).
Time’s on your side:
If walls could talk, they’d tell tales of 3am lockouts, urgent repairs, overgrown gardens and unpaid rent. Managing your own investment property is a job in itself, particularly if it’s getting on a bit or when difficult tenants are on the scene. While such scenarios are rare, the damage they can cause to your property – and your schedule – warrants a professional’s services from the get-go.
From creating a lease, lodging the bond, facilitating routine inspections and a trip or two to VCAT, self-managers quickly learn that they are effectively on-call for their tenants should any of the above emergencies arise. To throw a spanner in the works, many repair and maintenance issues need tending to now, or at least within the designated timeline on the leasing agreement – waiting until you’ve clocked off from the 9 to 5 – or hit a full 9 holes – is rarely an option.
Professional property managers are there to sweat the small stuff for you, day or night, so time will always be on your side.
Up close and personal:
Blood, sweat and tears – it doesn’t get more personal than the security of your family, and the hard work you’ve put in to ensure it. It’s only natural to feel an emotional connection to your property, and to want it treated with respect – a prime motivator for self-managers to take on the task themselves. There is however a fine legality-riddled line to tread when managing your relationship with the strangers who call your property home.
While self-managers may get the opportunity to forge a relationship directly with their tenants, they put themselves and their properties at risk when going into battle with those who don’t live up to their shining applications.
With their knowledge of the Residential Tenancies Act and their access to a register of tenancy database (NTD), a professional third party presents a barrier that not only defuses owner-tenant relations, but offers an official incentive for tenants to keep your property in top nick and their payments right on time.
Remain emotionally detached from the battle of the day, and allow a property manager to deal with the issues that would otherwise have you reaching for the tissues!
Putting it out there:
Rent money doesn’t grow on trees – nor do top-notch tenants! While self-managers can call the shots on how their property is advertised, finding the best of the bunch isn’t as simple as posting an ad online. The key to getting it right the first time – and maximising returns on your investment – is in a strategic marketing plan based on up-to-date market research.
Beyond their fiscal finesse, the better suited a tenant is to their home and its location, the more likely it is they’ll care for the property as if it were their own – reducing the costs associated with wear and tear. A committed tenant is also likely to stay on beyond the initial lease period and remain open to rental increases over the long-term – reducing the costs of tenant turnovers.
Not only do property managers have ready access to a pre-screened pool of renters that are on the lookout for a property just like yours, they are equipped with specialist online tools, resources and industry knowledge that puts your property on the virtual map to those ripe for the picking.
Professional Management vs Self-Management? It’s no contest! We engage professionals to cook our meals, groom our pets, do our taxes and clean our homes, but when it comes to managing our biggest investments and the veritable strangers who reside within their walls, there are some out there who still prefer to take on the battle themselves – often at a greater cost than they could ever hope to recoup. If you’re an investor, drop Infolio a line for all the information you’ll need to take the property management plunge.
Senior Property Manager