All Topics / Help Needed! / self managing a property

Viewing 11 posts - 1 through 11 (of 11 total)
  • Profile photo of daniel vicdaniel vic
    Participant
    @daniel-vic
    Join Date: 2013
    Post Count: 120

    hello all has anyone got some answers on self maneaging a ip ?

    i have one property the tennet has agreed to pay a extra $10 a week rent and has agreed to deal directly with me ive known them for a few years and they have been in the property for two years, the property is keept in fantastic condition all the time i couldnt be happyir with the way the look after it the rent is allways on time never a propblem in two years the lease with the agent is about to end and iam thinking of taking them on directly .

    pro’s i see in this
    1. save money on agent fee’s & letting fee’s
    2. get paid 26 times a year rather then 12
    3. the rent increase as well will all help my cashflow

    con’s i see in this?
    1. deal with all problems / when work has needed to be done i have arranged in the past as i know tradesmen in the area
    2. pay the rates , water bills as the agent paid and took from rent befoure but thats not a massive thing
    3. if the tennet falls behind what leg do i have to stand on if things go bad?

    and if i get a residential tenancy agreement drawn up between the both of us will that help me if some thing went wrong even no iam not a agent?
    with the bond do i have to lodge it with residential tenancies bond authority ? or keep it and pay to the tennet once they move out

    daniel

    Profile photo of Corey BattCorey Batt
    Participant
    @cjaysa
    Join Date: 2012
    Post Count: 1,010

    Try to estimate how many hours you would spend a year chasing up problems, understanding current tenancy laws etc vs. how much you will save.

    I personally don’t self manage any problems for this reason! :)

    Corey Batt | Precision Funding
    http://www.precisionfunding.com.au
    Email Me | Phone Me

    Investment Focused Finance Strategist - servicing Australia-wide

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    My wife self manages most of our properties.

    Not to save money – it’s just that we had so many hassles with PMs we decided to do it ourselves.

    As long as you treat it as a business and follow process – it’s not too difficult. You’ll need to be up with tenancy legislation in your state and be prepared to make tough decisions and have uncomfortable conversations from time to time.

    It’s not for everyone – but can work well for some.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
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    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of superAndrewsuperAndrew
    Participant
    @superandrew
    Join Date: 2014
    Post Count: 188

    Hi Daniel

    Agree with Jamie. It’s not worth it from a financial point of view.

    and if i get a residential tenancy agreement drawn up between the both of us will that help me if some thing went wrong even no iam not a agent?

    Yes definitely. It is not a requirement to be an agent. All the forms are available online.

    with the bond do i have to lodge it with residential tenancies bond authority ? or keep it and pay to the tennet once they move out

    Yes you have to lodge it (based on QLD laws) and can’t hold the money yourself.

    Andrew

    superAndrew | Property Analyser and Finder Tool
    https://property-analyser.com.au

    Profile photo of Jacqui MiddletonJacqui Middleton
    Participant
    @jacm
    Join Date: 2009
    Post Count: 2,539

    save money on agent fees & letting fees

    True, though check with your insurer if your premiums will go up if you are self-managing. I would be surprised if they don’t. Also be aware you’ll have to spend petrol money driving to the property to do routine inspections, or any time something needs to be reviewed before deciding to send tradies to the property.

    get paid 26 times a year rather than 12

    A lot of agencies do offer a fortnightly payment – have you asked about this?

    Jacqui Middleton | Middleton Buyers Advocates
    http://www.middletonbuyersadvocates.com.au
    Email Me | Phone Me

    VIC Buyers' Agents for investors, home buyers & SMSFs.

    Profile photo of JpcashflowJpcashflow
    Participant
    @jpcashflow
    Join Date: 2007
    Post Count: 575

    Daniel
    Let the pm work for you, it’s a tax deduction any way.
    And use your time to focus on what you really want.

    Jpcashflow | JP Financial Group
    http://www.jpfinancialgroup.com.au
    Email Me | Phone Me

    Your first port of call in finance :)

    Profile photo of ChrisA1ChrisA1
    Participant
    @chrisa1
    Join Date: 2011
    Post Count: 172

    Daniel
    Let the pm work for you, it’s a tax deduction any way.
    And use your time to focus on what you really want.

    Agree here. You would have to understand the tenancy laws very well and be able to act quickly. How close are you to the property? If you are close by where you can respond quickly, its worth it, but if you have to continue relying on out of town tradies then it may not be worth it unless you have good relationships with the tradies already. It could also get messy if you regard these tenants on friendly terms.

    It might be worth asking Jamie/his wife about what they had to know and go through before taking the plunge.

    ChrisA1

    Persistence is 'to keep on keeping on, no matter how hard the going may be'

    Profile photo of DwightDwight
    Participant
    @bigvman
    Join Date: 2002
    Post Count: 42

    I have seen both side of this situation.
    The question is: what are you going to do when there are problems like late rental, issues with repairs?
    Whilst it all sounds hunky dory in theory, it’s actually pretty hard to do when you live near to or are well known to the tenant.

    My Mum has been self managing her rental next door and I couldn’t think of anything worse. There’s so much emotional angst when the rent is late and “favours” like doing chores are offered in kind. How do you deal with these things?

    I wouldn’t do it myself and would alway advise people to really think hard.

    Best of luck,

    Dwight

    Dwight

    Cashflow Positive Investor

    Profile photo of thecrestthecrest
    Participant
    @thecrest
    Join Date: 2004
    Post Count: 992

    Sounds like your PM has been doing an ok job except for paying monthly instead of fortnightly.Just insist. Most landlords and most agent’s software pay fortnightly to get the interest benefit for the property owner.
    I’d be suspicious if the tenant wants to deal with you direct instead of the PM. Might see you as vulnerable which you are if you don’t know how the laws work, and they’re complicated.
    I agree with others that you’re better off with the PM.
    Cheers
    thecrest

    thecrest | Tony Neale - Statewide Motel Brokers
    http://www.statewidemotelbrokers.com.au
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    selling motels in NSW

    Profile photo of TheNewGuyTheNewGuy
    Participant
    @thenewguy
    Join Date: 2014
    Post Count: 151

    Short answer – If your current manager is good, I would keep them.

    Longer answer. It really depends on what your time is worth, and how much effort you will put into the property. Take into account the time, increased cost of insurance, the risk you’ll make a mistake and the increased cost of maintenance and it’s probably not worth it. With the increased cost of maintenance, I’ve found that the quotes from my RE have always been cheaper than I’ve been able to arrange. This is because contractors want this work, so they give a good price. I saved almost $500 on a new hot water cylinder through the RE and I tried my hardest to beat it!

    Profile photo of katieshafarkatieshafar
    Participant
    @katieshafar
    Join Date: 2005
    Post Count: 3

    I only SM my properties –
    that are a 5 minute drive away
    that are close by and have been poorly managed by PM’s (each one of these ha had 3 PM’s in the past – hopeless)
    that have long-term tenants, good payers, good property maintainers

    It is worth a go, follow the rules by the RTA, you will learn a lot, do EVERYTHING in writing with the tenant, eg if they ring to say xyz needs fixing, follow up that conversation with a summary email.

    I would also look for a new PM who may help you, and be there as a back stop if things go wrong – that is the time-consuming part.

    Regardless, find I am micro-managing anyway with or without PM’s.

    Remember, do the right thing by your tenants, they are gold…

    Happy to help anytime

    Katie 0408 102 552

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