Buying first property, because this is my first.. I was thinking of managing it myself.
Has any of my ozbargainerz managed their own property before? What are some of the pros and cons.
Also, I want this property ready to be rented out ASAP.
What is the best way to get a lot of traction?(i terms of marketing).
Self Managed Property - Best Way to Get Traction
yappiah on 25/03/2017 - 09:53
Comments
Great point. Thanks
Real estates have the benefits if being able to screen multiple tenants etc. would be a. Nightmare of a job to do yourself.
Private rentals tend to attract the types of people that don't get approved for rentals through regular real estates.This isn't always true
I have had private rentals when I was 19, Rented an apartment worth 1.2 million in Newcastle
$700 per week in rent
Owner was always happy with inspections / my ability to pay rent on time
Never had any issues
Not hard to screen people and call referencesI live in a complex where at least 25% of the tenants are drug dealers / meth heads and this was through a real estate agent
Can't really say, private rentals attract the types that don't get approved when its the complete opposite in most cases and going direct to the landlord 99% of the time means its a relaxed simple rental agreement, not having an agency do sweet FA for months about problems / issues
Agree with above posters. So glad I paid my $70ish per month for a real estate agent to manage my property. It saved so much hassle especially with the several building issues that arose
The problems arise when you get locked in with a terrible agent, who doesnt care about their job, and just does the minimal requirements. There are pros and cons for both. If you are a stickler for procedure and have plenty of time to do things yourself and learn through experience, it might be worth doing it yourself. Especially if you want to build a portfolio of property, the earlier you learn to manage it yourself, the more you save on your next properties as well.
I find its not worth your time until you make enough to live off the earnings on the properties. So start off slow, get a good property manager, and once you start making enough to stop working, make the property managing your full time job.
The problems arise when you get locked in with a terrible agent, who doesnt care about >their job, and just does the minimal requirements.
Why get locked in? If you are not happy with the agent, change them ASAP. When signing the management contract, make sure you cut out any clause that gives the agent exclusivity for a period of time. It is in most standard contracts, but I have not come across an agent yet who complained when I cut it out.
I know most agents do just the minimal and it is hard to find really good agents. But, this is where a small amount of your time does need to be spent. Attend the six monthly inspections and see for yourself how the house is being maintained. Talk to the tenants during those inspections to see if they have any outstanding issues that the agent has not taken care of. Every year, chase the agent to increase the rent - otherwise, they are unlikely to tell you. Over the years, I've had only one agent who proactively told me that I should increase the rent at renewal time. But, I've had other agents who been good at keeping my place maintained at a low cost. One agent even went to one of the houses in response to a tenant complaint and took a wrench out and fixed a minor issue herself instead of calling in a tradie. There are good ones out there, but are extremely rare. Most are average and in most cases, average is good enough as long as you take a little bit of initiative in keeping on top of them.
I think managing yourself is ok if you know the tenants or have a source for them where you can do some sort of screening (e.g. connections to the local Uni or something). Knowing the tenants a bit makes the admin hassles less as you can have a bit of give and take.
If you are expecting to advertise to find tenants, I would be inclined to use a managing agent, both to find the them and to manage the lease by the book.I manage myself and have done through real estate agents; here is my experience:
Pros:
Cheaper
You can maintain your property a lot better (tenant complains, you get issue rectified, none of this taking for ever)
Control over tradesmen you call when a fault arises
Can be quicker to find a tenantCons:
Annoying having to deal with everyone from Tenants/tradesmen etc
Tenants usually think that they can get one over on you, so they try
No matter what cleaning requirements etc you get signed, it's always more difficult to enforce
Sometimes repairs can be quite a bit more expensive
No end of year statement etc
Finding the right tenants can sometimes be difficult
You have to be a little bit more flexible.
Don't manage it yourself. Get a real estate agent to do it. The minimal %age they charge is well worth it.
The pros of self management
- You don't have to pay real estate agents
The cons
- Landlord insurance will be more expensive.
- You have to listen to tenant complaints and whinging
- You have to chase tradies to get stuff fixed
- You have spend a lot of time co-ordinating with tenants and tradies on when they can have access to the house to see things
- You have to deal with VCAT or your state equivalent when tenants don't pay rent on time
- You need to be up-to-date on the tenancy laws to protect yourself and your property and prevent tenants from taking advantage of you.
- You have to find tenants yourself and undertake all the vetting yourself.
For me, the 6-7% an agent charges and the time and stress that I save, it is well worth it.