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 cashflowcon’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 outdaniel
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 MeInvestment Focused Finance Strategist - servicing Australia-wide
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
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
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.ausave 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?
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This reply was modified 10 years, 7 months ago by
Jacqui Middleton.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
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 MeYour first port of call in finance :)
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'
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
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
thecrestthecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
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!
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 maintainersIt 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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This reply was modified 10 years, 7 months ago by
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