DIY vs via Agent Property Management

Hi All,
I am planning to put my first investment property (Location: Melbourne Outer suburbs, 3/2/2 unit) on lease from early next year. I am conducting a feasibility analysis on whether to go DIY property management or via a Rental Agent.
I need advice on pros and cons of DIY property management. DIY ranges from putting advertisement on realestate to collecting rent and general property maintenance.

Thanks in advance for the guidance and advice.
Kind Regards,

 

Plenty of thread you can do you analysis from already on the forum.

For the sake of $20-30 a week if you think the money is worth more than your time then DIY otherwise pay someone to make sure the rent is coming in, doing inspections, issuing correct notices, attending VCAT, conducting entrance reports, claiming bonds, organising and meeting trades for repairs/maintenance.

For me I would rather not have the $20-30 a week and enjoy my life and if there is any issues that is the PMs problem to deal with I will just tell them what to do.

DIY is great if no issues and the tenant pays the rent on time all the time, inspections are great and no maintenance/repairs required.

 

Pretty good article about it in Australian Property Investor Magazine here Property Management Delegation Key To Your Investment Success - Australian Property Investor

 

Genuine question: in your study, where and how do you plan to advertise for the rental? Appreciate if you can share.

 

I use an agent to manage. It takes the emotion out of the asset class.

Managing a property is a lot of work for not much reward. I would prefer to work in my business and earn more.

 

I never, ever want to deal with the drama of tenants for a single property nor learn the ins and outs of the laws regarding it. Now imagine dealing with that for X amount of properties while your at the cinema, the beach, dinner with the family, surfing PC...Hell no.

Get a PM. Frankly speaking, many of them do a crap job but nonetheless, the buffer between you and the tenants is invaluable.

 

How prepared are you to learn the nitty gritty of the Tenancy Act in your state? If you DIY you need to know this backwards and forwards so that when you have a tenant issue that you issue every single notice to tenant in the correct way.

If you don’t do it properly and you need to evict your tenant the court will throw it out as you haven’t done it properly and you will then need to issue all notices at the correct times again. Your landlord insurance will not cover the time it was done incorrectly as you have a Duty of Care to them to minimise the claim by serving notice immediately.

Around 60% of the time it goes well but as soon as something goes wrong it’s best to have a PM.

 

Professional tenants also prey on DIY landlords. I dont mean professional in a good way. These are people who look good on paper, might have made up references and move in then stop paying rent after a few weeks. It will take around 3 months to get them out and you will be wearing all costs during that time.

 

I'm sure you meant done incorrectly

 

This ^^^

 

autocorrect corrected incorrectly!! Literally and figuratively.

 

This is true but they do that to professional property managers too. Mate of mine's property manager just got taken for the biggest ride by one of these types. PM lodged paperwork to take the tenant to court but the tenant would pay just enough to stay out court the day before the hearing. PM moved to evict but the hearings got cancelled because paperwork was filed incorrectly... twice! PM finally got the tenant out but he had done a lot of damage in the meantime and not all of it was covered by insurance.

 

Having been driven mad by tenants complaining to me about electrical work they wanted done I would hire a PM just to give someone else the pleasure of listening to complaints. These days I would fob them all off to the PM but I was too young and nice then!

 

It's feasible....I don't think it's advisable though.

It's a relatively small, tax deductible outlay which allows you to set/forget your investment. You don't want to be waken up at 1 am when there's a severe water leak in the house....I've been in that situation....not fun :-(

Cheers

Jamie

 

If it is Melbourne outer suburbs I suggest you get a PM as these are lower socio-economic areas so you are more likely to come across tenant related issues such as default on rent than say an inner suburb place leased to young DINK professionals.
That said young professionals could be very high maintenance, i.e. have lot of maintenance requests etc.
So I would get a PM regardless. If you don't want to drive a car without insurance you shouldn't lease a place without a PM.

 

I moved from a property manager to DIY a while back, and I don't think I will go back any time soon. Only issue if I go overseas, etc.

PMs only care about getting someone in the property, not the quality of the tenant. This saves you a lot of hassle down the track. I have a number of properties, and all I have to do is ensure rent is received and inspections performed.

As mentioned, you have tenants preying on DIY landlords, my suggestion is don't advertise on Gumtree. pay a third party to list on realestate.com.au. For rentals the fees is really small.

If something does go wrong with a PM, they failed to lodge the paperwork, etc, there is no recourse. Easier to take a tenant to court then it is a PM.

(I'm in WA, lots of helpful government information for landlords and tenants)

 

I have managed properties myself with little or no issues and now use PMs. I prefer PMs non the less.

 

Those who have had problems with PM's generally haven't picked a good Property Manager- which is what it sounds like in the couple of cases mentioned so far in this thread.

Instead of trying to learn the entire tenancy act, in's and outs of best practice, implied law, etc etc, spend your time selecting the best Property Manager you can find.

Some people self-manage for years without a problem, others meet with disaster from day one. Some self-managing Landlords can justify the time and resources required to effectively self-manage (usually if they have an extensive portfolio) and others (most) chance it. It's all about risk management.

 

I have had a particular ip unit for 15 years. I have always rented and managed this unit myself.
I feel i can vet my potential tenants better myself. Never had a major problem in all those years.
So easy. The money is in my bank account without fail every two weeks. Have save tens of thousands of dollars in fees over the years.Yes i do live in the next suburb
I use FSORBO to advertise. $99 gets numerous photos on Realestate.com.au . And then vet my people better and control maintenance costs better