Investment Property - Apartment Rental

CheapSticks on 31/01/2018 - 10:49
Last edited 31/01/2018 - 12:11

hi

Our property is currently being managed by an agent for over a year now. In 4 out of 5 times when maintenance was required, the quotes were way too high i.e 2x or mark-up of $300-400. When i called the same trade to quote me on same thing, the price was materially discounted to agent quote. In the end, we used the trade that i found as it was way cheaper. So paying agent 6% for collecting rent only.

Our unit is on lower north shore in Sydney - wondering if anyone has any agency recommendations?

Is anyone self-managing rental? I can save $2.5k pa. What are the challenges - one thing i can think of is reference checking for new tenants? Is landlord insuranve avlble for self-rental assuming it is bit expensive?

thanks all !

Financial

Comments

  • kolorijo on 31/01/2018 - 11:08

    Maybe you can recommend your own tradie or handyman to the REA as your preferred person in case of maintenance?

    • CheapSticks on 31/01/2018 - 12:17

      That’s what my wife also suggested. I don’t have like preferred tradesmen - need to call around and find people based on reviews/recommendation n then organise. I can certainly do it but feel frustrated to pay that fee to an agent when it’s her job.

      Case in point the aircon broke - said her technician saying replace it n gave me quotes of 3k for 3.5kw. I knew for a fact that it was small aircon like 2.5kw. Questioned her but she held her view that my technician looked at it. Sent mine it was 2.4kw n costed me 1.6k. So annoying n unpleasant conversation.

      • kolorijo on 31/01/2018 - 12:56
        +1

        Based on your example, i would be looking for another REA. Unfortunately good REA like good auto shop, hard to find and when you found them, hold on dearly to them. Good luck in finding a new one. I would not suggest managing it yourself, too much hassle if you got a problematic tenant.

      • [Deactivated] on 01/02/2018 - 09:11

        Join a local Facebook group for recommended tradies. I have had some great leads from them.

  • geek001 on 31/01/2018 - 11:15
    +1

    Yes, you can self manage. It also depends on what sort of renters you get. I have heard stories of renters who knows their way around property law sue their landlord because they fell down because of maintenance issues were not rectified. I guess it is all sweet and good until you have to go to court for various reasons, like tenants not paying rent or they contest their bond, etc.

    I don't know what the procedure is for your agent, but my agent is supposed to get 3 quotes for any work required.

  • Trying2SaveABuck on 31/01/2018 - 11:26

    As someone who hates property managers and thinks they are useless. It is still better to have one when you have bad tenants then to not.

    Tenants in (victoria at least) have way to much rights the law protects them if they break damage or dont pay rent all you can do i take them to VCAT it can take months to kick someone out at least if you have a decent property manager they can put pressure on tenants.

    if you ask me the law is f***n shit for residential landlords

    • plmko on 31/01/2018 - 11:46
      -2

      And just to rub it in, soon you can no longer discriminate against renters for having a pet.

      • Trying2SaveABuck on 31/01/2018 - 11:57
        -1

        yeah Labor government!

        it is a absolute joke it honestly encourage landlord to take the law into there own hands (in some cases) because the financial loss of bad tenants can be hard to recover from. It is honestly better to throw the tenants out change the locks and be fined by VCAT then do the right thing i honestly know people that have done it because the fine would be been cheaper then the process and damage/loss of rent.

        Renting out a property is a 'business' and should be treated like one the laws treat it like it is the renters homes and the landlords are all rich people getting rich - in reality majority of landlords are middle income workers just trying to get ahead

    • jpl on 31/01/2018 - 15:27
      +2

      if you ask me the law is f***n shit for residential landlords

      Not all. At least some are f***n shit for tenants too.

  • CLoSeR on 31/01/2018 - 12:14
    -1

    Perhaps look for another agent, for me it is totally worth the cost for them to manage. Especially when you have the sewer back up on Christmas eve, they handle the problem so you can relax and spend time the way you want.

    Any repairs we've needed are always either market rate or lower. It's probably because they have negotiated rates with tradesmen who are rewarded with lots of work.

    • CheapSticks on 31/01/2018 - 12:47

      Exactly mate - I totally agree that they shud get the best trade rates due to volume. Am afraid though my expr is otherwise. I don’t get it !

    • CheapSticks on 31/01/2018 - 13:44
      +1

      May I know the name of your agency?

  • [Deactivated] on 31/01/2018 - 12:45

    Dealing with some people's property managers as part of a body corporate I've found multiple of them to be completely dishonest and forwarding outrageous quotes and trying to strong-arm the body corporate into massively overpaying 'their mates'. It's not their money they don't care. I've even come across one who referred their partner's painting business without disclosing it.. :\

    • Trying2SaveABuck on 31/01/2018 - 15:32

      Although im sure dodgy shit happens when body corp is involved one thing i found better was insurance claims. When i've claimed things as a individual for properties i've been treated like a lying criminal by the insurer (because they are greedy dogs) but with properties with a decent body corp manager ive never had an issue literally pay my excess and things are fixed in 3-14 days.

      Especially if the claim involves a few other people shit gets done because insurance can strong arm you.

  • CheapSticks on 31/01/2018 - 12:48

    Is there anywhere I can get recommendation on agent in an area??

    • SmiTTy on 31/01/2018 - 22:52

      "property chat" forum (formerly somersoft) is a good place for all things property (google it)
      I'd suggest checking out that forum, doing a search for PM recommendations in the area you're in and read some reviews or recommendations of others who've had experience.

      (there may not be any in your area … but its a good place to start)

      IMHO .. stick with a PM. $2.5k pa is not a large sum considering how much rent you're talking about, and for them to deal with the potential issues that could arise with a bad tenant (which yes, could cost more if that eventuates). Furthermore its tax deductible and hopefully any net capital gains you eventually make will make the $2.5k pa look like peanuts….(hopefully)

      • CheapSticks on 31/01/2018 - 22:57

        thanks - great suggestion about propertychat

  • JimB on 31/01/2018 - 15:07
    +2

    I use an agent to collect rent and inspect the property. I don't really need them, but I can't be stuffed dealing with the paperwork.

    I have always done any repairs or maintence myself when required, it would cost me a fortune if I had to get a tradie out for basic work.

    I also find tenants would always advise the agents that something needs attention when it isn't really a problem, i.e. if the tenants owned the property themselves, they would live with it let alone pay a tradie themselves.

    Another rip off is the annual smoke detector check for $99. Fuk me.. for $10 I can buy a new smoke detector, plus it's the tenant's responsibility to change the battery and check if the smoke detector is functioning.

    • snook on 17/02/2018 - 23:54

      I had mine hard wired in.

  • [Deactivated] on 01/02/2018 - 09:17

    This comment may not help you, but commercial property is a much better investment.
    Tenants are far less hassle, returns are higher and if you manage to secure blue chip leasers the value of your property will increase.
    I just scored lucky because the NBN has been installed fibre to the building on my unit, thanks to my local council.

  • macca9123 on 01/02/2018 - 09:54

    If you are happy doing most of the work yourself then you can always just use a REA to find and screen new tenants as required. That way you only pay the REA for their work in finding a tenant and there are no on-going fees.

  • Pumpkin_rrr on 01/02/2018 - 10:38

    Sorry a bit busy so just speed-read.
    I see that you are looking for new PM. Since it is an apartment, you might have an Onsite Manager? I would recommend to use them for a myriad of reasons. There is no perfect PM, but just find out their strength and weakness, and use it to your advantage.

  • SlickMick on 01/02/2018 - 10:55

    We've been having grief with the agent for a rental property - always threatening to sack them but too lazy to look into it.
    We're about to move and rent out our home. Initially presumed would need to use an agent. Then speaking to an electrician he said he used agent to just find tenant and lodge bond, but collects rent and organises maintenance himself. Costs 1 weeks rent.
    That sounded dodgy to me. (I don't trust agents.) If they were looking for tenants for 10 properties they were managing plus mine that they get no "trailing commission" from - who would go to the bottom of the list?

    There are online companies that charge $25 to do a tenant check.

    So only remaining question is can you find a prospective tenant yourself?

    My wife posted on facebook and got hundreds of hits. We showed about a dozen through, cut the ones we didn't like, and asked for rental ledgers and references from those we did.

    All the forms required are available online (for Queensland at least).
    So I was working on writing up 2 tenant agreements when I got distracted by my daily ozbargain email :)

    This is just a personal opinion, but I reckon real estate agents are destined to go the way of the dodo. They simply don't add sufficient value to warrant their cost.
    But then again, I guess some people would rather pay somebody than have to talk to prospective tenants, take calls re maintenance requirements, do inspections, draw up paperwork. But I wouldn't expect to find such a person here :)

    • CheapSticks on 01/02/2018 - 13:44

      Interesting - I will google but pls go share the entities that do tenant check - might be worth talking to them.

      Also, from insurance perspective are you finding higher price or getting insurance given self managing?

  • SlickMick on 02/02/2018 - 10:18

    https://www.rent.com.au/rentcheck
    https://www.tenancydatabase.com.au/
    http://www.rentcheckcorp.com/
    http://www.tenancycheck.com.au/home

    I have used any, so can't comment on service provided. eg. I would hope you don't pay if they can't find the person you're searching for.

    I haven't noticed any difference with insurance, but I've never compared quotes both says for same property/ insurer.
    I can't see why it would make any difference - in what way does having an agent reduce risk? I guess it's possible that I person might not screen prospective tenants whereas hopefully an agency always would??

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