Property management is not just about renting out the premises and closing the business for the day. You have to calculate your steps into future prosperity of your property as well as taking into consideration the need for your tenants’ satisfaction. The checklist for perfection of these aspects covers several niches from pricing, maintenance as well as team work to mention a few.
Having a healthy relationship with your tenants is an important fundamental but it can be dangerous if it develops into a personal friendship. For example, problems may arise with the timing of rent payments when tenants believe there is room to take advantage of you on the basis of being your ‘friend’.
It is very important to understand where the market is and where it is heading. Knowledge on the current market rent can maximize your returns. However being too greedy can create a negative effect by alienating a good tenant who will decide to move on rather than pay extra. This will increase the risk of long term vacancy on your property as it appears to be overpriced.
Keeping the property looking new can be as easy as applying a fresh coat of paint or attending to tenants needs with small investments, like a dishwasher or an air conditioner. An owner who maintains their property with high priority will attract tenants to treat the property with the same respect.
You should know as an experienced investor, no one can do it all on their own. It is important to hire an experienced property manager who is familiar with your area. A good property manager will handle the entire liaison with your tenants and keep you updated.
DIY-management can be challenging when it comes to property management, letting a property management agency or company do the job for you can be worth the few dollars they charge for the service. These companies are in place to relieve you the stress of bearing the whole load of responsibility in management as well as the ups and downs that come with the exercise. You are a property owner but you are not a property manager.
One key reason is that the potential savings are negligible when compared to the management fees currently charged by real estate agencies in a highly competitive market – and even more so because by DIY-managing, you will forego any tax rebate on professional fees.
Never mind that a property manager is worth their fee many times over in juggling the many day-to-day tasks, which, incidentally, include advertising properties, vetting tenants, chasing rents and deposit bonds, coordinating repairs, doing property inspections and, when necessary, attending the tenancy tribunal. They’re ‘worth their weight in gold’ in facilitating an arms-length relationship between a tenant and landlord, says Linda Tuck, property investor, commentator and director of Cairns-based specialist residential property management group Property Ladder Realty.
For some, managing their own investment properties can be financially rewarding. Depending on your other commitments DIY investment property management can save you money and let you be more involved in your property. Not everyone has the time to be so hands on, so before you jump in consider your options and weigh up the benefits.
Depending on various factors such as cost and the need to maintain a personal closeness with your tenants, you may opt to go the DIY way as the owner of the property and manage it firsthand. These form of management is not easy either, it takes commitment and more responsibility to meet the expectations. There are just a handful of activities you may have to counter but the best part is that at the end of the day you get your due in whole.
One of the key reasons that a landlord may consider a DIY option is to save money. Keep in mind that these costs are tax deductible so you should be claiming these to reduce your taxable income.
When you look at the cost of employing a professional property manager, it is certainly good value. If you compare these costs to other professionals, such as accountants, the cost is very reasonable. These costs are often more than offset by the additional rent an experienced manager can get you, better deals on repairs and, of course, the cost of your expenses and time.
If you are considering being a DIY landlord, you need to ensure that you are always readily accessible and have the time to deal with situations when they arise. It can be costly and frustrating if you are working or are on holidays when a property needs to be leased, when the tenant doesn’t pay their rent or if urgent maintenance work is required. Be aware that some of these things are time consuming, particularly if you aren’t sure what you are doing.