First Time Renting out, Be Own Landlord or Hire an Agent?

• 

  HighAndDry on 05/12/2018 - 12:13

  +11

  First time as a landlord? Get an agent. Get quotes from a few to see what the prevailing letting fees and managing fees are. Ask around family and friends who're landlords for recommendations.

  it seems there is a fee for everything.

  I mean, I'm no fan of agents but yes, if they do something, they'll charge for it.

  ---

  Edit: Things to keep an eye on, even if the agent says they'll take care of it:

  1. Condition reports (before tenant moves in, after tenant moves out - make sure these are all fully completed with photos where necessary).

  2. Bond - make sure these are received and lodged by the agent when a tenant moves in, make sure the agent takes steps to stop it from being released if there are any issues on tenant moving out.

  3. Periodic inspections - try to attend these so you know what condition the property is at each point in time.

  Disclaimer: Not an agent, no expertise in this field, etc.

  • 

    QW3RTY on 05/12/2018 - 12:42

    +3

    Very good advice.

    Also a key thing to consider, when a water fixture bursts in the middle of the night — those fees you pay to a managing agent will be the difference between you sleeping soundly and you needing to wake up, contact a plumber and arrange an immediate call out. Property related mishaps are a pain and dealing with some tenants can add to these headaches. Very few tenants will be set and forget, paying on time and will leave the property in perfect condition.

    Collecting rent, dealing with inspections, managing a suite of reliable contractors, re-letting upon vacancy and handling the bond process are all good reasons as well.

    I recommend getting a managing agent, but make sure you do your homework as per the above suggestion.

    Previously a commercial property manager.

• 

  GangGang on 05/12/2018 - 12:18

  +1

  Its not long term. Just get an agent to sort everything out.

• 

  Iamnotcheap on 05/12/2018 - 12:18

  +2

  Been on both sides / used an agent and did it on our own. Whilst doing it on your own is manageable, there is just the administration side of doing inspections erc that can eat up valuable time used elsewhere.

  We did have initial issues with our agent but we demanded seeing inspection reports and visited the house with the agent every 6 months. This seemed to rectify a number of trivial issues to ensure they were earning their weekly commission.

  You can also set some ground rules such that you can handle any trade repairs etc to avoid excessive charges after the fact, given they use their own (usually on a kick back basis), which means you have no immediate view if you getting bang for buck.

  Last piece of important advice whichever way you go - you have to emotionally disconnect from the house. Not everyone will maintain the upkeep of the house as if it was their own.

  • 

    eXo on 06/12/2018 - 11:24

    +1

    "Last piece of important advice whichever way you go - you have to emotionally disconnect from the house. Not everyone will maintain the upkeep of the house as if it was their own."

    this ^

• 

  Seraphin7 on 05/12/2018 - 12:45

  +1

  From Feb next year we will need to be renting our place out for a whole year.

  Does this suggest you're going interstate/overseas for a year and renting it out while you're gone? In this case, definitely use an agent. Yes, you will need to do some research into getting a good one, but the alternative is a total nightmare … something goes wrong with the property and it's all on you to resolve it.

  • 

    knobbs on 05/12/2018 - 12:47

    Not overseas just to North side of Brisbane for the year.

    • 

      Seraphin7 on 05/12/2018 - 13:44

      Comes down to how "hands on" do you want to be.

      If you pick up a tenant easily that looks after the place, doesn't give you hassle, you're happy to do your own inspections and nothing goes wrong with the property, you'll obviously be better off.

      If you end up with a troublesome tenant or something major goes wrong that is no one's fault, you'll be the one running around dealing with either the tenant or dealing with the repairs noting in this latter case you'll likely have the tenant riding you to get it sorted.

      As with many things in life it comes down to a risk assessment. Based on your link, you'll be paying the agent ~12% of your year's rental income. Is this worth it to you?

• 

  Trying2SaveABuck on 05/12/2018 - 13:04

  +4

  God help you

  Was a landlord for two properties over 5 years the worst experience of my life when the tenants are good then its fine but when they are bad/destructive/demanding/unreliable then it is hell and Property managers (PM) are rather useless and the law treats you like a criminal whilst your tenants cost you 100/1000s in damages.

  There is good tax benefits to having an investment property but in a falling market you need to ensure the tenants you get are good and i'd argue there are more bad tenants then good ones out there because good ones usually stay put where as shit tenants are consistently shifting location.

  If you are going to get a PM then dont expect much out of them other then collecting rent and charging you for a big load of nothing.

  • 

    [Deactivated] on 05/12/2018 - 14:20

    Never leasing a residential property again. I'm literally leaving a place empty rather than deal with BS.

    Very high demand area too and have had people leave offers to lease.

• 

  [Deactivated] on 05/12/2018 - 13:17

  Hire an agent. A lot of landlords sign up for a PM for 12 months and if the Tenant is still there and all good they go private.

• 

  dazweeja on 05/12/2018 - 13:20

  I did it on my own because I wanted to choose the tenants myself rather than leaving it to an agent. It was pretty straightforward - I did one inspection after 6 months, condition reports/leases/bond forms all available online. I wrote in the lease "no nails in the wall and carpets must be steam-cleaned at end-of-lease" but other than that nothing special. I also stipulated that rent would be paid weekly by scheduled bank transfer.

  It all went pretty smoothly. I guess agents might be more useful when you have bad tenants. It is a good idea to have the numbers of plumbers/electricians/handymen when you start because when you need these, it's usually an emergency.

  I sold that property but if I did it again, I'd still do it on my own.

  • 

    xylarr on 06/12/2018 - 10:46

    +1

    Except, at least in NSW, stipulating steam cleaning is specifically disallowed in rental contracts.

    Good luck. Tenants can be crap. Friend of mine had to completely replace all the carpets because of pet damage. There was not a room that did not have torn up carpet (I'm guessing a cat). Plus, because the carpet was three years old, and carpet can be depreciated over 10 years, he could only claim 70% of the original cost from the bond.

    Some people are pigs.

    • 

      dazweeja on 06/12/2018 - 11:08

      Yeah, I think the tenant thing is a bit of a lottery. But I'm just not sure why you'd want someone else to choose for you. I doubt the agent cares about the property as much as the owner and personally I like to look people in the eye and see what sort of person they are. I also had a word to them telling them that I spent a lot of money on the property, it meant a lot to me, and I expected them to treat it as well as if it was their own. And they did.

• 

  garetz on 05/12/2018 - 13:36

  +1

  A good property manager is like a good IT manager, when they are doing their job it looks like you don't need them and they arent earning their keep, until shit hits the fan then you regret not having one.

• 

  onevstheworld on 05/12/2018 - 14:28

  Are you willing to be rung at 2am when a pipe bursts? Or tenants lock themselves out?
  Give up 2-3 weekends to vet and interview tenants each time you have a vacancy?
  Do you know your legal obligations as a landlord?
  Do you know your legal recourse when a tenant is behind on rent? Or damages the property?
  Do you have the balls to say no if your tenant makes an unreasonable request?

  If you say yes to all the above (if your answer is "I'll ask Ozbargain" that counts as a no), you might consider self-managing.

  When considering a PM, you should speak to them in person and make sure you get the correct vibes. If the PM is part of a real estate agency, I'd be doubly cautious with due diligence… property management is the poor cousin of sales, so you don't want a PM who is only there as a stepping stone towards a sales career. Also wouldn't want an agency that has a single person looking after 100s of properties.

• 

  mini2 on 05/12/2018 - 14:37

  If you want your landlord insurance to be valid, more than likely it needs to be managed by an agent anyway.

• 

  knobbs on 05/12/2018 - 15:07

  Thanks for all the tips guys, looks like the correct answer is to get an agent.

  Any recommendations for South West Brisbane?

  • 

    tanksinatra on 05/12/2018 - 15:50

    +1

    I'd recommend finding an independent agent. The franchises charge too much and their staff manage large caseloads.
    Get a few quotes and compare fees. Be aware you need to add GST to all the fees including the management fees.

    I recommend realty8 (www.realty8.com.au) for the Brisbane SW area. Did a great job letting out a place for us.

• 

  Lunarboogie on 05/12/2018 - 19:01

  +1

  I've never gone through a PM and I've leased an IP for 11 years. The most important factor is to scrutinize your choice of tenant and everything else will flow smoothly. And if the place is relatively new or good nick you won't get many calls at 2am. In almost 12 years I've been called up once after hours and a few calls to find an after hours plumber solved the matter.

  Back yourself. I trust myself far more than some barely 20s kid whose looking at his next job more than your property. Good luck.

  • 

    dazweeja on 06/12/2018 - 11:12

    I agree with everything you said.

• 

  Gandalf the Thrifty on 06/12/2018 - 22:07

  Usually agent give you all the applicant files, its like reviewing job applications and you pick the one you want. So not sure why people are saying only get pick your renter if do it yourself.

  Any way make sure you get landlord insurance as if end up with dud tenant at least can claim lost rent etc.
  Agent fees, insurance, loan interest and other costs are all tax deductable anyway against the property, so wouldn't worry too much if only for year.