G'day all..
Just wondering if anybody knows how to best go about aquiring the ins and out of managing your own property. We live within ten minutes of all 3 of our IP's and they are well maintained solid properties. The only trouble we have had with them has been things like cleaning gutters, faulty powerpoints, loose hinges, washers on taps replacing…. It just seems crazy that we are forking out 8% for our PM to do this when we can do it ourselves. The last IP we advertised the property ourselves and found the tenants….. just got us more interested in the whole thing. I suppose the things we would need to get our hands on are contracts and maybe some legal tenancy acts etc… any help would be appreciated… cheers
tuggerwaughIf you are a handyman, have the tools and more importantly; the time – then I'd consider it. Especially if you live close by.
Personally, we don't manage any of ours (even our own PPoR which is now an IP and only 1 mile away) as all our others are a fair distance away, but I also don't want the hassle.
I'd rather pay the 6 or 8% etc – it's tax deductible, so it's good value I reckon.
But, if cashflow is an issue (isn't it always??) then sure; go ahead. But get a copy of the Tenancy Act and learn it back the front.
We went through the same thought process a few of years ago, i.e. self manage our I.P.'s. I've got to say that, for us, it was much harder than it looked and we soon went back to a Property Manager.
If it looks just "too easy" now, that's probably because you've got a good property manager
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
We manage our own IP (only one) it is 3 hours away. In victoria you can get a landlord pack from consumer affairs (no cost) which has bond lodgement and contracts etc. Our tenant pays directly into our nominated account. We have made some concessions in that she pays rent fortnightly (works out better for us), she pays slightly below market rent. In turn she has the gardens professionally maintained. We have lodged a set of keys with the local locksmith – so far, so good
Hi tuggerwaugh
I manage my own properties and it is fairly easy to set up. you will need to get a 'Residential Tenancy Agreement' and a Condition report but it is very easy to find them on the internet for under $50 (PM if you need any help finding a good site). Organizing the bond couldn't be simpler, it literally takes a few minutes on the internet and one letter.
Managing your own properties isn't for everyone but considering your situation it sounds like it would be a great idea. depending on how often your tenants change you will save yourself a considerable amount of money – If on average they move every 2 years then you will pay roughly 10.45% per year of your annual rent (7.7 management fee + 5.5 letting fee divided over two years). That can be very handy if your properties are still negatively geared.
Best of luck
Let me know if you have any questions!
Cheers
Banjo Smyth
I think what you pay for in management fees is not running things while eveything is going well, its dealing with the issues when things go pear shaped. In that case personally I would rather have an intermediary to issues notices , attend tribunals etc. and deal with the occasional attention seeker. That suits me as I dont have much spare time and would rather have it for myself and my family rather than the IP's.
If you are happy to deal with all aspects of the tenancies then there is money the table for you to redirect..
I suppose looking at our properties ($380, $370 and $250 per week) we have always had professional tenants and never any dramas with them. The properties are in excellent condition and pretty fool proof. Although it might be time consuming and create more headaches for me, I find the idea quite interesting and feel it would add another string to my bow of property investing if I was to have a go at managing the properties. What I may do is take one out of the hands of the Property Manager and have a go doing one first… once I get my head around that maybe i'll take on the second, and down the track take on the third… this seems like a more logical approach…what do you think?
tuggerI suppose looking at our properties ($380, $370 and $250 per week) we have always had professional tenants and never any dramas with them. The properties are in excellent condition and pretty fool proof. Although it might be time consuming and create more headaches for me, I find the idea quite interesting and feel it would add another string to my bow of property investing if I was to have a go at managing the properties. What I may do is take one out of the hands of the Property Manager and have a go doing one first… once I get my head around that maybe i'll take on the second, and down the track take on the third… this seems like a more logical approach…what do you think?
tuggerI suppose looking at our properties ($380, $370 and $250 per week) we have always had professional tenants and never any dramas with them. The properties are in excellent condition and pretty fool proof. Although it might be time consuming and create more headaches for me, I find the idea quite interesting and feel it would add another string to my bow of property investing if I was to have a go at managing the properties. What I may do is take one out of the hands of the Property Manager and have a go doing one first… once I get my head around that maybe i'll take on the second, and down the track take on the third… this seems like a more logical approach…what do you think?
tuggerI suppose looking at our properties ($380, $370 and $250 per week) we have always had professional tenants and never any dramas with them. The properties are in excellent condition and pretty fool proof. Although it might be time consuming and create more headaches for me, I find the idea quite interesting and feel it would add another string to my bow of property investing if I was to have a go at managing the properties. What I may do is take one out of the hands of the Property Manager and have a go doing one first… once I get my head around that maybe i'll take on the second, and down the track take on the third… this seems like a more logical approach…what do you think?
tuggerIf it is in Queensland you can download all the forms from the Residential Tenancy Authority , http://www.rta.qld.gov.au/ They have the entry condition report that you can download for free which I'm sure you could then use in any state. If you are looking for forms these could be used as a base. I managed my own property in Queensland using all thier downloadable forms for 18 months but had good tenants and a good relationship with them. As I live in canberra, once they moved out i moved to a property investor as it is too hard to assess new tenants from so far away.
The best way to manage your properties is purely by the numbers. Ie a system that allows you to quickly look at your portfolio and decide whether it is affordable or not to have an agent take care of the nitty gritty for you.
I have an excel based "property analysis sheet" that I have found to be an excellent "system" to manage my properties.
You are welcome to use it if you wish.Drop me a mail if you wish me to send it to you
We personally prefer to engage good property managers to look after our real estate investments who are willing to do more than just collect the rents because, we’d rather not be woken up in the middle of the night to fix things like broken taps.
We found by leveraging other peoples time and skills we were then freed up to concentrate on our next project.
One thing that made a huge impact on us achieving our goals faster was adopting the ‘Pareto Principle’ (more commonly known as the 80/20 rule). This helped us to stay focused on the “20 percent of things that mattered” and saved us from wasting an enormous amount of time and energy on things that just weren’t necessary.
Adrian and Amber
http://www.RealEstateDevelopmentClub.comin mid 2009 I will be taking 12 months half pay leave from my job, so I thought it might be a good opportunity while I am doing some renovating to also dabble in property management.. even if I take on 1 property first and learn the ropes, before taking on the second and third at a later date…. this way I have the time to give to my tenants…. what do you think?
tuggerwaugh wrote:in mid 2009 I will be taking 12 months half pay leave from my job, so I thought it might be a good opportunity while I am doing some renovating to also dabble in property management.. even if I take on 1 property first and learn the ropes, before taking on the second and third at a later date…. this way I have the time to give to my tenants…. what do you think?We always find that its important to look at the big picture and start with the end in mind. We would set realistic goals and then prepare an action plan taking into account the 80/20 rule. You need to ask yourself "Will managing my properties get me closer to my ultimate goal any quicker or would I be better off to outsource this part and concentrate on building my portfolio?"
When we decided to build a property portfolio we started with the end in mind and decided to run our property portfolio as a real business. This meant we needed to have a clear vision, set ourselves realistic goals, prepare a proper plan and be able to make better use of our time.
You need to think of your goals as drawing a map: if you know where you are and know where you want to go, even if you do get lost, you will find your ultimate destination, namely your destiny.
You need to set goals that are big enough to drive you, to excite you and move you forward to where you do want to be, and you need to set goals regardless of previous 'failures'.
Once you've set your goals then you will need a plan of action. When it comes to building a property portfolio a typical plan shouldn't take you long to put together. Some parts may be a breeze however others may be a little difficult. If you're just starting out, the effort you make developing a concrete plan will more than pay for itself in the long term as your property portfolio grows.
Whatever you decide plan accordingly. “A goal without a plan is just a wish”.
Adrian and Amber
http://www.RealEstateDevelopmentClub.com
Good onya Adrian and Amber…
We have 3 IPs already and have the next 3-4 years mapped out as we are currently living in the NT and putting some serious money into our mortgages. We are planning to start a family soon and are very excited about the future. I suppose I just love investing and think about it all day everyday, and the more I can get my hands into it the better…plus I really enjoy seeing my own properties and talking to people…. will think even harder about our plan and see how we go. Thanks again
tuggertuggerwaugh wrote:Good onya Adrian and Amber…We have 3 IPs already and have the next 3-4 years mapped out as we are currently living in the NT and putting some serious money into our mortgages. We are planning to start a family soon and are very excited about the future. I suppose I just love investing and think about it all day everyday, and the more I can get my hands into it the better…plus I really enjoy seeing my own properties and talking to people…. will think even harder about our plan and see how we go. Thanks again
tuggerWe regularly update our plan as our circumstances change. The mere fact that you are so passionate about property investing will also help you reach your goals quicker. If you're passionate about what you're doing then you won't mind putting in the time and effort building a property portfolio requires.
Wishing you much success!
Adrian and Amber
http://www.RealEstateDevelopmentClub.comMany real estate books advise you to have a 'real estate agent' manage your property.
Been there – done that…(
I self-manage all my properties and have been for more than 10 years – including houses, apartments and commercial properties.
Here's my 5 P's for PM:
1. PROPERTY – Keep it clean and well maintained. Check its "street appeal". Know its features and what type of tenant is it likely to attract.
2. PAPERWORK – have copies of Lease documents, Bond form, Application & Reference Check form, direct debit form etc. Make sure you have Landlords insurance. Set up a Property Management Filing system (your accountant will love that!).
3. PROMOTION – Think about how to advertise it through low cost, high visibility ways eg, "For rent" signs are cheap and get the phone ringing! Advertise it through word of mouth to your friends, work colleagues, local shop noticeboards. Advertise it in the local newspaper or internet. Remember to 'sell the sizzle, not the steak'.
4. PEOPLE – Select the 'right' tenant, not necessarily the first tenant.
Also, have a team of maintenance contractors (eg/ plumber, electrician, gardener, handyman) that you can call on easily and quickly when something needs repair.5. PROFIT – PM is a business. Its YOUR business! Make sure you set the right rental price and collect the rent on time, every time. Set up a system for rent payments. Direct debit (usually weekly or fortnightly) – that way if there's a problem with payment you'll know quickly. Weekly frequency is also great for cashflow.
There are plenty of books and internet resources available.
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