Looking for feedback from fellow Investment property owners.
What are the Pro's and con's for having a Real Estate Agency manage properties?
Investment Property Owners - What Are The Pros/Cons with Using Real Estate Agent?
Lyousavedwhat on 21/01/2019 - 16:50
Comments
I've had my IP managed by a REA, and a company that specialises in property management. The REA was a dumbass and took him forever to do anything, also when the property needed fixing, he would clearly use his buddies and try and charge more. Also, the REA company would change staff every couple of months and it was extremely frustrating. Now I'm not saying that all REA are like this, but that was my experience
I read similar experience like yours very often.
I'm not saying that all REA are like this
they're either like that, or much worse. the worst staff at any real estate office work on rentals, the good ones work on selling
Considering the high fees they charge REA's are of dubious value. Sort of all care but no responsibility.
If you are going to use a REA then get it clearly spelt out what they will do to earn their fees. DO NOT give them the discretion to authorise repairs otherwise if you have a problem tenant you may well end up paying an electrician call-out fee just to change a light bulb. Similarly $150 to change a leaking tap washer.
If you live in reasonable proximity then manage the property yourself and save a couple of thousand in fees each yearIf you are ok to take calls from tenants at all times of day and night and do the legwork to call around to find a trade to fix things, manage the property yourself.
Also, make sure you are upto speed with relevant legislation and what your responsibilities are.
Otherwise get a REA to do that for you. You still need to be on top of them as at the end of the day, it is your property and you are solely responsible for it.
I have 6 properties and all are through a REA
PRO
Your agent will have the knowledge of the applicable laws for your area, they will understand the relevant compliance and record keeping requirements. They will document all money in and out of the property and maintain a ledger for tenants as required.
They will take calls after hours, and address all issues. Be aware as an owner you have very specific notification requirements for attending properties and cannot be done at your leisure. Any agreements you draft up are likely invalid unless you follow the law to the letter, an agent will know what can and cant go in agreements.
A good agent will be a better judge of character, and have the resources at their fingertips to vet the right tenant.
You do not have to chase up rent arrears and stay abstracted from the relationship with tenant.
A good agent will take the stress out of owning a property, trust them to do their job. (Yes there are some unscrupulous people out there and will hear horrid tales but do some research)CON
Costs money
Who you deal with will likely change frequently.DIY
You are in charge of collecting money and submitting bonds.
You have to keep detail records, keep every conversation and interaction and do your own ingoing/outgoing and routine inspections. Keep on top of legistlation etc.
You're on call, things always go wrong.Find the right agent, and be a good landlord, treat them with respect and they will bend over backwards for you. If you cant afford to have maintenance done at your property, rental properties are not for you, old homes & new homes don't go without issues. Remember its not the agents fault that XYZ went wrong at your 20yo property, nor is it the tenants.
Don't be emotionally involved, if you manage it yourself learn what fair wear and tear is and understand homes are made to be lived in, if you don't you will likely find yourself losing at tribunal. Also there is nothing wrong with wanting to do your own maintenance, agents are more than happy to give tenants the required notice for you to attend, just don't ignore it.
I have 3 rental properties through Agents and I have worked as a property manager and still wouldn't manage my own property, I pay someone to take the stress out of it. If you don't want too that's up to you.
We now have two IPs - have had four - and there is no way we would manage it ourselves. We have an excellent relationship with our property manager and she is very proactive in ensuring there is good communication between us and the tenants and vice versa. We communicate with the agent often, not just when there are issues of concern, and if the tenant has raised an issue, we are willing to go to fix it ourselves if it is a minor matter, or to give the go ahead for the agent to get it done. We have our own preferred tradies who we have used over the years in both our own PPOR as well as rentals and the agent is happy to arrange contact between the tradies and tenants if matters require.
We have a slightly reduced premium as we have been clients for a while and have had multiple properties, but even without this we are comfortable in paying. Agent fees are tax deductible, and taking just one of our tenants at the tribunal for some fairly serious damage and rent arrears was something we could not have done without our property manager to deal with the situation.
Depends on who is renting off you. We have lovely tenants in our IP and they are there for the long haul.
Keep the house clean. Pay rent on time. Actually they are renovating. Crazy stuff. Managing it ourselves. Saving a fortune and it's not much work at all.
I feel that agents can also screw you over with crappy tenants. They do have a massive list of desperates on their waiting list and they need to live somewhere?
We also have another tenant in a detached Granny flat. Quiet as a mouse, single, doesn't use much electricity at all. Works full time.
Perhaps we were too picky. And those who have trouble above. Wtf happened? How did this happen? Seems end of days type stuff without a REA.
Now you have the power to select who you want to live in your property. Not some real estate agent. Treat it as a selection panel group interview. Be picky.
We treat them with respect and kindness, the money rolls in.
Pros - I don't have to attend to every minor nuisance.
Cons - I have to attend to almost every minor nuisance.
Pro - you don't have to worry about compliance, day-to-day maintenance, bills.
Cons - you have to pay for it.