Self-managing landlords must be aware of their responsibilities and the potential risks, with almost half without adequate insurances, according to The Australian Landlords Panel 2012.
With 77 per cent of investors either currently using professional management with an agent or having used them in the past, both options need to be weighed up with open eyes, said Terri Scheer’s insurance manager, Carolyn Majda.
"Do-it-yourself property management can appeal to some investors, who may see it as an easy way to save money," Ms Majda said.
However, she warned, there is a time commitment that, for some, can outweigh the cost savings.
“Self-managing landlords will need to find the time to screen tenants, conduct regular property inspections, ensure rent is being paid on time and be ‘on call’ to attend to maintenance issues,” she said.
Self-managing landlords, and those who opt for a property manager, must still consider a specialised form of landlord insurance.
"Landlord insurance is designed to help protect investors from many of the risks associated with owning a rental property," Ms Majda said.
"These include malicious damage by tenants, accidental damage, legal liability and loss of rental income if a tenant absconds or leaves a property unable to be re-let while damage is repaired.
"It can also provide peace of mind if the unforeseen should occur, as well as ease a landlord’s concerns about receiving regular rental payments.”
Currently, 81 per cent of landlords who use a property manager were found to have landlord insurance cover, the Australian Landlords Panel 2012 revealed. Just 54 per cent of self-managed landlords had the same insurance.
“Uninsured landlords really need to think about how they would manage financially if they were faced with thousands of dollars worth of damage to their rental property, or were unable to re-let their property while repairs were being made,” she said.
Investors must expect to be hands-on if they want to find success with self-managing.
“Property managers are able to conduct regular property inspections to identify maintenance issues, ensure the tenant is looking after the property and, if required, liaise with appropriate tradespeople as soon as possible to address any problems," Ms Majda said.