Hi all, I am new to the forum and investment property. I’m currently looking for advice and information on how to properly rent out my first investment property.
Background: I’ve purchased a brand new apartment unit in CBD Melbourne area, been living for almost a year and had now decided to rent it out and purchase another property elsewhere for own living. The property price was $550k and I’m currently paying mortgage on 3 years interests only at 4.80%.
Been doing some research and the average rent out price for my current/similar apartment unit would be approx. $560-$600 P/W.Here’s a few of my questions:
1. Should I go with agent to rent out my property?2. What are pros & cons of agents rather than self management?
3. What are reasonable commission rate for agent? (I’ve read on this forum that it ranges from 5%-10%)
4. What sort of insurance are required to protect my rental property?
Finally, one last question: I’ve been researching some area to purchase a new property. What are your thoughts on Ivanhoe & Hawthorn area; in terms of living and future value, would it be worth purchasing/investing in these area?
Thank you for reading, any advice appreciated!
1. Should I go with agent to rent out my property?
Up to you but quite honestly, they don’t get paid much considering how much hassle they shield you from. It probably isn’t worth your time to self-manage.
2. What are pros & cons of agents rather than self management?
A few big cons of self managing are having to keep across residential letting laws, having to deal with troublesome or non-paying tenants, and realising your insurance company wants to charge you more for your insurance because they deem your property to be at a higher risk of damage or rental default when you attempt to self-manage.
3. What are reasonable commission rate for agent? (I’ve read on this forum that it ranges from 5%-10%)
As you say it ranges depending on area. The average is circa 6.5%
4. What sort of insurance are required to protect my rental property?
Building insurance including public liability (which may be covered by the owners corporation if such a thing applies to your property… and in your case it will apply because it’s an apartment), plus landlord insurance to cover things like malicious damage, rental default, and rehousing the tenant if your property becomes unliveable due to an event such as flood.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Perhaps it is worthwhile getting quotes for insurance and property management so you can make an informed decision. I enjoy self managing but I have a decent amount of spare time. If you have a tenant that pays rent and a property that doesn’t require much maintenance you should hopefully not hear from your tenants very often! However, I think the majority prefer the hands off approach to property management.
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