If you are considering buying an investment property, determining if you will manage it yourself, or hire a property manager to look after it for you will be one of your key decisions.
You can certainly save money by taking a do-it-yourself approach.
Most property managers charge fees averaging around 7% of the rental income you receive. So for a $450 per week rental gain, approximately $31.50 of that per week will go to the property manager.
Often as a landlord, it’s wise to ask if your time co-ordinating property inspections, dealing with tenants, and co-ordinating property repairs is worth that much. The majority of landlords say it is worth paying a manager.
The legal obligations of a landlord must also be taken into consideration, so before you take that DIY approach to your investment property management, make sure you are well advised both financially, and legally.
Using a property manager does not mean you cannot personally inspect the property.
In fact, it is advisable to inspect the property personally at least twice a year, regardless of if you are using a property manager, or taking the DIY approach. This will ensure you identify any potential tenancy or maintenance problems before they become a major issue. Often you will know your property better than your property manager, even if it is an investment.
Make your property features stand out:
If you are thinking of managing your own property, getting tenants in, and keeping them there, will be a huge part of this role. This means all the marketing will come down to you.
If you can look at your property with an objective eye, and see the features that make it different to all the rest on the market, you can often use these features in your marketing to maximise the return on your investment.
Make your property stand out by clearly advertising features such as secure parking, abundant storage, closeness to public transport, large living areas, access to parks and local attractions. Emphasising these features in your marketing is key to maximising your returns.
What does a good property manager do:
Firstly, a good property manager should take the effort out of owning an investment property for you. It’s as simple as that.
Some investors who find they are still doing a lot of the work that is meant to be managed by the property manager, often decide the DIY option will work for them.
However, there is plenty of excellent property managers out there, and Mortgage Choice suggests they should be taking on the following roles, whether it be you, or someone else:
Rental amount guidance: determining how much can you charge for your property in your specific area and market.
New Tenant sourcing: advertising the property, photography, conducting inspections, interviewing tenants, checking references, submitting appropriate paperwork, collecting bonds.
Rent: collecting rent payments and depositing the cash into a bank of your choice. Ensuring any late payments are followed up on.
Leases: Managing the legal obligations and drawing up the lease, including depositing the bond money with the appropriate authority.
Inspections: preparing detailed inspection reports at the start of each tenancy, during the tenancy and at the end of each tenancy.
Responding to tenants: organising emergency repairs, responding to contact by the tenants in relation to any of their needs on an ongoing basis.
Statements: providing regular landlord statements that itemise any rent that has been received and any other outgoings.
Tribunal hearings: if necessary, organising and attending tenant tribunal hearings.
If you are considering buying an investment property, Kylie Taylor, your mobile home loan consultant from Mortgage Choice in Brisbane is ready to help you get started.
Call or email Kylie today, or if you are wanting more on property managers, check out this handy list of Questions to ask potential managers:
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This article is for general information purposes only. It has been prepared without considering your objectives, financial situation or needs. You should, before acting on the advice, consider its appropriateness to your circumstances.