hi all
just wondering if anyone has had much experience with managing your own rentail property?
i know the services that property managers provide can be very important, but to avoid paying property management fees would help financially.
can anyone share some ideas and give some pointers in regard to manaing your own rental?
regards
Lyndon
Hi there.
Personally, for the 5-9% (tax deductible) fee you’ll be paying an agent, I’d avoid all the headache of self management every time.
Having said that, if you’ve got the time and willingness to learn and you think that is worth the 5-9% (pre tax) savings then go for your life. There are plenty of people who self manage with no (or few) worries at all.
Search the archives for previous threads on the topic. There’s loads of useful stuff around, healthy debate as well. Here’s a couple threads I found using the query ‘self managing’:
https://www.propertyinvesting.com/forum/topic/25682.html?SearchTerms=managing,self
https://www.propertyinvesting.com/forum/topic/26172.html?SearchTerms=managing,self
Cheers,
Art‘Great spirits have always encountered violent opposition from mediocre minds.’ – Albert Einstein
I have self-managed IPs for over 25 years. When I was 15 my parents bought their first IP and managed it so I kind of grew up watching it.
When I bought my first iP at around 19 I didn’t even consider having it managed. In all that time I have had a handful of tenants who had me worried. Only one of those damaged the house and luckily the landlord insurance paid up. Otherwise I would have had to repair and repaint the room myself, no biggie.
I am in Brisbane and the RTA website is really helpful. You can download, fill in and print off the forms required. They are super helpful with phone queries as well. You do need to keep to the propert times as far as giving notices etc.
I have managed our IPs while having a full time job and having three children.
I have to say though, that living very close, we don’t do mid-lease inspections and never have. With our feral tenants last year, we did spend a bit of time chasing rent etc, and spent probably the most time ever at the house, annoying them until they went, within the law of course.
We treat our tenants like real people with rights. My mother still manages their IPs and she is 70. We have always been very hands on and have done a lot of renovations over the years, but even if you get tradies to do any work, you can still manage the house yourself.
To me, it is a matter of checking whether the money has gone into the bank, and writing our a receipt. If and when a problem arises, the RTA is the first port of call.
It is a doddle but I realise it is not for all. When I think that every week I would lose $30 per property in fees I shudder. I need that $30 in my pocket.
Wylie
I have been a Property Manager for over 30 years with various Real Estate Agencies, now I am semi retired and self manage my own five properties plus my son’s four.
Keep accurate records, I opened a seperate Bank Account for each ppty and the tenants either bank their rent by going into a branch or with internet banking. I issue a receipt ever time, and keep an Excel spreadsheet on each ppty, detailing rnet, paid dates, inspection dates, lease commencement and end dates, and any other info I might need later. Also if you need to go to Court (hopefully not) then the Court see that you know what you are doing if you have accurate records. So many landlords do not.
Feel free to contact me if you run into any trouble,
Axis (JP)
I also manage 3 of my properties. I was in real estate sales for a couple of years and picked up on the basics and kind of thought the same way as you do. $30 is far better in my pocket than in somebody elses. You have far greater control on what gets repaired and what doesn’t. Some rental managers will just do whatever the tenant wants in terms of repairs and send the landlord the bill, which I personally would not cop. As mentioned earlier, keep meticulaous records and you will be fine. Don’ be afraid to make that phone call to your tenant about late rent. After all, it is your money. I enjoy tracking who has paid what and knowing what kind of repairs might be coming up. Good luck with it.
Hi all
thanks for the great replies thus far.
My main worry is that my current PPOR is a new home, only just completed 1 month ago, and things could get damaged quite easily.
Am i within my legal rights to take a bond if i am managing a property myself?
I just want to know that i have the same protection and backup with contracts in place etc if i am to manage the property myself.
Cheers!
LyndonYou have the same protection of a bond. It must be lodged with the RTA (in Queensland anyway) within ten days of receiving it.
You need to do all the things that agents do, like an entry condition report, hand over a booklet about “renting in Queensland” etc. It is all available on the RTA website. I don’t know about other states, but they must have this available somewhere, I just don’t know where.
I have found that the better our houses are, the better quality tenant we get, so don’t worry too much about the fact that it is new.
Having said that, some people just don’t care, so take out insurance. But don’t get hung up on general wear and tear. It happens to every house.
Wylie
I have a friend that manages about 6 or so of her own properties. She is a person with bad time management, works full time, and has children. I recently spoke to her about one of her properties (she needed a hand printing a letter, her printer is STILL not working – come on a printer costs less than $100) She was writing to the tenants to get them to agree to a new lease and a rent increase. She had not changed the rent since 2003 and that lease ran out in 2004.
So she is already so far behind in rental increases, that if she had given the money to a property manager she would now be ahead after costs, and I hate to imagine the possible state of the property with no inpsections. She just should not be self managing.
So if you can see yourself keeping the paperwork that these guys have suggested, and you are able to commit to keeping track of lease expiries, and can negotiate rental increases, then I don’t see why anyone can’t do it themselves. You just need to decide what sort of personality you are, organised, or bad with your time and paperwork management.
There are some bad stories about Property Managers out there, no doubt about that, so best of luck with your decision.
kjs
Also make sure you get get some sort of access to check references? Don’t just ring the number given on the reference, it may be their friend answering [eh]
kjs
As a property manager, one of the first things we do when taking on a property from a private landlord is PUT THE RENT UP!!!!
On average, private landlords under rent properties because:
1. they don’t have the means or knowledge to conduct a comparative market analysis of rentals in the area.2. have not put the rent up for years!!!
One of the most common phrases we hear landlors say is “yes I know the rent is low, but they look after my property”
I have never really understood what that means, you can have tenants paying market rents that look after the property too, it is not a mutually exclusive thing!!!!
A good property manager should be an asset that ads value to your property, by keeping rent within market conditons and minimising vacancies, they should not be a financial burden!
Investment Property Management
http://www.adprop.com.auI would try to do it yourself. You can always get a PM later.
When I lived in the ACT I managed 5 properties in Brisbane. I even managed them when I lived in Kunnunurra. If you can learn from a website (like the RTA (Not the RTA in NSW) for Qld) give it a go. We used to fly up from ACT and conduct open houses for rent. You get to meet prospective tenants and can use your ‘gut feeling’ to guide you. We did credit checks on people and devised our own Application form based on a combination of forms from various RE Agents and the RTA itself. All rent and payments had to be made by Internet Banking or direct deposit. Receipts always issued etc. Learn the applicable law, speak to some RE agents and Property Managers and give it a go. Besides being financially rewarding, it can be a personal development and educational experience. One other thing when a changeover was imminent, we got a PM to obtain a tenant (cos we couldn’t physically manage to do it) and then we took over. Don’t think they will do this these days, but not 100% sure. If distance is not a problem, you are well served to attempt it yourself. I then graduated to become a fully Licenced Real Estate Agent in Qld cos I was so interested in buying and selling, holding and renting etc. It was a great experience with very little trouble over a number of years. I felt that the personal touch, although on a very businesslike basis was a winner.
By the way, get a Property Management Sytem for record keeping purposes. Makes life real easy, which is our aim when doing business. A few dollars spent here will return rewards over and over again.
BrianHi guys,
I just thought of something. Can you pay yourself a 10% property management fee and/or charge yourself and hourly fee to look after a property? So therefore you could still claim 10% PM fees? If you think about it, by doing all this work you are losing money/time that could be spent doing something else. Therefore could include it as earning a wage could u not?
Please clarify this? Does it change if its in a trust as opposed to your own name? Could you legally pay a family member to look after my properties instead?
Cheers,
PaulDefinately give it a go yr self.I have found it can depend on the type of tenant you have in yr house too as to whether it works.The older retired folk can be great tenents to self manage.
I have one prop (13hrs drive away from me) i bought who has a lady who has lived in the house for 10 yrs so far and every time i talk to her she says,”yr not going to sell my house are you? I want to die here!”
she pays the rent every fortnight without fail,never complains ,she is awesome!“Don’t let yr character be impacted by yr surroundings, instead make yr character impact yr surroundings”
– Rachel Scott(17 yr old killed in columbine shooting 1999)http://rachelschallenge.com/Luke Taylor | Hope Property Investing
http://hopepropertyinvesting.com
Email MeProperty Support,Strategist and Buyers Agent
In answer to dare to dream’s question about paying a family member to manage properties – yes you can.
Our IPs are in hubby’s name for tax purposes and he pays me the fees he would pay a manager. It is not a dodge though, because I actually do manage things for him.
Our accountant does both our taxes.
Wylie
There is considerably more to Property management than just collecting rent – ask any property manager! Good property management plays an important role in ensuring your property receives maximum returns and remains in tip-top condition.
An efficient property manager is well worth the relatively small fees charged.As you can see from the posts here many property investors choose to manage their own investment properties. While you may save on fees, it can be frustrating dealing with and selecting suitable tenants and the paperwork can prove to be an administrative and legal minefield.
Nevertheless, may investors do successfully and happily manage their own properties and they are happy to carry the burden of doing so and put in the extra time required in return for saving on the rental fees and having greater peace of mind regarding knowing what’s going on regarding the property in general.
If you’re going to be a DIY landlord you must be aware of your legal requirements and I’d suggest that personal contact is kept to a minimum so that sensitive issues such as raising rent are discussed without incident.
You’ll find several DIY landlord pro-forma letters, templates & checklists on our site at http://www.propertydivas.com.au
Here also is a list of useful links:
The TICA Group http://www.tica.com.au
– NSW Tenants Union http://www.tenants.org.au
– NSW Office of Fair Trading http://www.fairtrading.nsw.gov.au
– ACT Tenants Union http://www.tenantact.org.au
– ACT Magistrates Court Tenancies Tribunal http://www.courts.act.gov.au/magistrates
– NT Dept of Justice http://www.nt.gov.au/justice
– QLD Tenants Union http://www.tuq.org.au
– QLD Residential Tenancies Authority http://www.rta.qld.gov.au
– SA Office of Consumer & Business Affairs http://www.ocba.sa.gov.au/tenancies
– TAS Tenants Union http://www.tutas.org.au
– TAS Dept of Justice http://www.consumer.tas.gov.au
– VIC Consumer Affairs http://www.consumer.vic.gov.au
– WA Tenants Advice Service http://www.taswa.org
– WA Consumer & Employment Protection http://www.docep.wa.gov.auAmandaBS
http://www.propertydivas.com.au
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