Self-Managed Properties vs Agent-Managed Properties
If you are considering self-managing know first and foremost it is a big task. You will have to follow tenants up for rent, organise maintenance, follow up the trades, find new tenants, write up leasing and other formal documentation, attend for inspections…. Should I go on?
Owning an investment property is a huge task, though it should be very rewarding. It should not be a hassle, and money should be steady. For a percentage of the rent, is all these responsibilities something you can add to your to-do list?
Whether your answer is yes or no, we believe in setting up our investors for success. We have gone through and highlighted a list of Top 5 mistakes we see self-managers make, and a further Top 5 list of considerations to make when weighing the option of why you may choose an agency instead.
Top 5 Mistakes Made When Self-Managing Your Property:
- Screening tenants: Landlords may not have the correct resources to do thorough checks of an applicant. The National Tenancy Database will show tenants who have defaulted, show bankruptcy and court action. Applicants can also try to deceive you by using house mates contact details as opposed to their current agency. CoreLogic will provide Agency details and identifying if the home is also owned by the family, if advised by an applicant.
- Not keeping up to date with legislation: This has been particularly important through the recent COVID-19 period, where there were updates almost daily. Did you know the required notice for rent inspections, what form and notice is required for rent increases and the requirements with the bond? Its important to know the rules as you can be fined for breaching the residential tenancy act.
- Competitive Market Analysis: Are you achieving the highest rent for your investment home? It’s not just about Googling another 2 bedroom, 2 bathroom home and asking for the same rent. Ensuring you have a competitive and up to date market analysis on your property, as each month can be different in renting a property and what amount in rent can be expected
- PCR’s and Inspections: A full and detailed Property Condition Report is the most important document, as it is used for the final bond. Ensuring photos and specific locations of damages are noted, so if you ever need to go to court this will be used as evidence. Are you aware you must inspect the premises every 3 months? If at the end of a tenancy an insurance claim is required, those reports will be requested.
- Emotions: Difficult conversations are commonplace when managing properties, if a tenant advises they cannot pay the rent or just they don’t want to what would you say? Or they have damaged the property and are refusing to take responsibility what would you do?
Top 5 Reasons why you may choose an agency:
- We handle the day to day: A lot of landlords do not realise how much we communicate with your tenants. There are a lot of questions that pop up that is usually quite general. We respond in a timely manner, keeping the relationship strong and secure with the tenant. We also do all the other stuff no one else wants to do including insurance claims, attending court and standardising routine inspections.
- We handle all your finances: We can pay your invoices on your behalf. And you will receive a monthly statement detailing your exact costs that month and shows how much money goes straight into your account. This makes it very easy when going to your accountant at tax time, as you are provided with all the invoices of monthly payments.
- Access to trades: We have a preferred contract agreement signed by our contractors ensuring the best price and service is provided. This allows us to get the best works completed for you, and if there are ever any emergencies, our trades will be accommodating. We also make the time to source various quotes when you are needing bigger works complete.
- We provide on-demand advice for those sticky situations: Including negotiating the best price, taking the emotion away from those discussions when they arise with your tenant. This is one of the biggest highlights!
- Agents are professionals in what they do: If you do not know the fundamentals of managing a property such as terminating an agreement, notice required for entering the property etc. then you shouldn’t start to self-manage. Or if the issue is that you are currently with an agency and you are not happy with the quality of service you are receiving, know that all agencies are not the same. Do your research, read the agencies Google Reviews, see the quality of properties available on their website. All these attention-to-detail moves are hugely beneficial to you and your asset.
If you are in two-minds about whether to have an agency take care of it instead, I encourage you to give me a call. I will be more than happy to talk you through the above and give you a complimentary appraisal on your property. Know also that you can still be a very hands-on investor even if you are with an agency! It is our job to keep you completely updated, and you can come back with as much information as you like.