Some people opt to manage their own properties as a cost-saving measure, but do the numbers really stack up?
Blogger: Helen Collier-Kogtevs, Real Wealth Australia
When you invest in property, you’re basically creating your own small business. You have an asset, being the property, which produces an income and you have outgoings such as mortgage interest payments that you need to cover.
Part of running a business is finding the right experts to work with you and I truly believe that your property manager is one of the most important people on your team.
Some people opt to manage their own investments as a money-saving strategy, but I think that’s a short-sighted view.
When you look at what your property manager will do for you in exchange for a modest, tax-deductible percentage of the rental income, it makes me wonder why…
A great property manager will work with to make sure your investment is well maintained and tenanted by people who treat the home as if it’s their own.
In amongst dozens of other services, they’ll provide local knowledge and experience of what renters want; advise you on lease conditions and rental figures; advertise your property and coordinate inspections with new tenants.
They’ll also evaluate the applications and conduct reference checks, deal with the legalities of leases and the rights of tenants and send you monthly rental payments.
And this is all on a good day! They’re also on hand to respond to tenant requests, repairs and emergencies. They’ll meet with contractors to deal with after-hours repairs. They may even represent you in any negotiations with the tenant or dispute resolution bodies if things turn pear-shaped with your tenant.
In my mind, property managers are worth their weight in gold! Having a qualified property manager on your team is almost like having a personal assistant to cope with all of your responsibilities to do with managing that particularly property.
Having said that, all property managers are not created equal, so make sure you interview at least three property managers before you decide on the right one. They can make all the difference between a stress-free experience and a nightmare tenant!
Until next time, happy investing.