‘Do it yourself’ management is an option, but you need to ask yourself whether you’re really up to the job or whether you need to enlist the services of a property manager.
It’s essential to go in with your eyes wide open if you’re taking the DIY route; there are benefits, but the unprepared or ill-informed property manager will find they are entering a minefield.
Not having to pay a property manager lets you maximise the cash flow from your investment. A manager’s fees can swallow up between 7 and 10 per cent of your weekly rental income.
If you’re charging $500 per week, that can be up to $50 weekly, or $2,600 per year. Not surprisingly, managing the property yourself can be very appealing if you’re operating on a tight budget.
Good property managers, however, earn their crust and if you’re looking to save on their fees, you’ll need to be ready to work for it.
Securing the right tenants is the secret to successful DIY management. Rent has to be paid on time every time if you are to successfully balance your mortgage repayments with your rental income.
Get lumbered with late payers and you’ll quickly find your own repayments coming under pressure as your lender won’t wait while you chase up your tenants.
Due diligence is essential during the selection process: look for a good credit rating, positive referrals from previous landlords, good reasons for moving and the desire to stay long-term.
Once you have selected a good tenant, you need to do your best to keep them.
Ensuring your place is kept in pristine condition will help, and can really save you money in the long term. You’ll be less likely to experience high tenant turnover and loss of rental income and will probably need to spend less on major repairs and maintenance.
Knowing the area well will also help you market to and attract the right tenants: get familiar with the neighbourhood facilities, schools, cafes and transport as this will determine the type of tenant who will want to rent your property.