19 March 2015
DIY or use a professional to manage your investment?
Many landlords see property management as a simple job and so some landlords are tempted to do it themselves. While the property is sailing along smoothly it can appear this is the case however, the complexities of the task involved are often revealed when something goes wrong. Often the property is sailing along smoothly due to the preventative processes a professional property manager has in place.
It is a sad fact that a self-managed investment properties are statistically more likely to go off the rails than a professionally managed property.
If you are considering DIY here are a few questions to ask yourself & answer honestly:
- How comfortable are you that the tenant will have to have your phone number and may call you at any time 24 hours a day, 7 days a week, 365 days a year?
- Do you travel regularly? Who will keep any eye on things if you go on holidays or travel overseas?
- Do you have reliable tradespeople that can respond to emergencies? Do you work full time? So would you be available to supervise tradespeople during normal business hours, at short notice, when required? After hours call outs mean extra dollars.
- If you self-manage will your landlord insurance company cover your tenancy and if so what will your premium increase to? Do you know what is involved in making a claim?
- Do you have a way of finding out if tenants have a poor rental history or have previously been evicted? Poor tenants often target private landlords for this reason.
- How will you verify that tenants are who they say they are? Again poor tenants will use this to target private landlords.
- Do you know the warning signs for any illegal activity in a house i.e. drug lab or marijuana growing?
- Would you feel safe confronting a tenant about issues with the upkeep of the property?
- Are you up to date about all current tenancy legislation and changes made?
- Are you confident to stand up at the tenancies tribunal in front of a mediator and potentially the tenant/s and argue a case? Can you detach your personal feelings?
- How good are you at record-keeping? Do you know the regulations for keeping rent records. Also records of maintenance matters & general discussions with the tenant/s.
- Are you organised and assertive enough to chase up late rent immediately?
- Could you bring yourself to evict a family, or a person who has fallen on hard times?
- Realistically how much will you save by managing your property yourself when you add up the time involved? Remember management costs are a legitimate tax deduction.
- Once the potential stress is taken into account, particularly when things go wrong, isn’t your time and peace of mind worth more?