Hi, we are looking to rent out our 1st property,
but are unsure of the processes[worried].Here are some questions, any advice would be greatly appreciated[biggrin]
1. Do we rent it out ourselves or use a property manager?
2.If we used a pm, what is the average cost for their fees?3.( this one might sound stupid [confused2]), but what happens if the tenant hurts themselves @ the property – can they sue us -( I would think highly probable – depending on circumstances though) & will normal public liability insurance – ( the cover that you have in your general building insurance) be suffice or would we have to take out extra insurance to cover this sort of thing – this is a big concern for me because everybody seems to be suing anyone & everyone these days[crying].
4. If repairs needed to be done to the property & we were using a pm could we organise the tradesperson or handyman or even fix the repairs ourselves?
5. With landlords insurance – can you get cover for periods when the property is not tenanted?
And in general is landlord insurance very expensive?I know these questions might sound silly !!! ( I’m a newbie – of course) but I thought that with all the experience and knowledge of the members on this forum, this would be the best place to get some HONEST answers[exhappy].
In advance, i like to thank everyone for their advice – it means alot[thumbsupanim].
Cheers
GinamarreeHi Ginamarree,
welcome to the forumManage yourself or use a PM (property manager)?
This will depend on how comfortable you feel, and how much information you will want to gather. If you chose to manage yourself, you will save around 6.5-8% in management fees, but you will need to do your homework in case something goes wrong. I recommend going to the residential tenancies website for your state and having a read about responsibilities of landlords and tenants – lots of information about leases, notice periods, mediation etc etc etc.
Managing your self can be great if all things are going well. Would you be prepared to go and speak to the tenant about rent in arrears? Tell them to remove their pet dog which is not on the lease but is chewing up your carpet? evict them? Rentals managers can take the brunt of this for you. If you get a manager, still take the time to get to know your rights and those of your tenants. You should still check in with the PM on occasion to see how things are going. To a certain extent Real Estate can be set and forget, but you can’t ignore your investment – still needs your involvementAvg cost of PM fees – 6.5 – 8% of rent plus postage and petties, other sorts of costs such as advertising for new tenant, relet fee generally one week.
Take out house and contents insurance – this should have public liability cover in it. your responsibility is to provide a safe place to live for your tenant – so probably would not cover you if you were at fault knowingly leaving an unsafe problem unfixed – eg exposed electrical wiring.
4. Yes you can do your own repairs and maintenance, you can have your PM contact you whenever there is a problem, and instruct them whether to get it repaired or let you do it.
5. Your insurance covers you even when there is a reasonable gap between tenants (most do, check the fine print)
Cheers
CDCastleDreamer
Thanks, Castle Dreamer – gives me some direction !!![thumbsupanim]
Cheers
GinamarreeGinamarree, you can also try searching this site using the search function on the left side boarder. Try looking up some of the key terms from your post and see what other people have to say.
CheersCastleDreamer
My replies.
1. I use PM. Never done myself. I dont want to hear the sob stories. PM can handle that.
2. Depends on # of properties with agents. As I have 2 with the agent it 5%. If I only had 1 it would be 7%.
3. I have public liability insurance and landlords insurance.
4. Yes. if its small i get PM to do it. If major repair I source my own people.
5. I do not insure for lost rent. Never lost any rent in the 7 yrs investing. Its not too bad.
Ginmarree
Have a think about doing the PM yourself. If you live near it, and it is a new or near new property, it is not that hard.
I PM one of our properties here in Sydney. In two years, I have heard from the tenant 4 times. He has set up a Direct Debit for his rent that goes into our account every month like clockwork.
I used an agent to get hime in. They charge 1 week’s rent for a 6 month tenant and 2 weeks rent for a 12 month tenant.
As the unit is only 4 years old, there has not been anything go wrong with it.
It has saved me almost $3,500. Better in my pocket than an agent don’t you think.
‘Eat rich food, barbeque a yuppie’ [greedy]
agents are also tax deduction
remove self from the equation, better to let others handle it, it can get nastyhaving said that I do both.
But I have a tenant thats abit on the not easy side too, so the PM can deal with them. The pm doesnt like the tenant either, cant wait to see them go! now thats saying something.I like insurance.
Yes tenants can sue, thats why you have insurance.
They cover for tenant vacant periods.cheers
Hi,
Thanks everyone for the advice, it’s greatly appreciated[thumbsupanim]
Ginamarree
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