Help with 1st self managed property

So we bought our 1st IP not too long ago and we have been renting it out on Airbnb .
It seems The hassle is not worth the small extra return for us.
So we are looking to rent it out normally.
I am hoping to self manage the property as rents are pretty low and PMs are pretty expensive here (south of Perth)
Dose anyone have any tips? Links to websites etc.
I'm looking for the legal documents I can use and the best way to go about advertising for tennents. What's our legal rights for things etc etc.
I know the arguments for using a pm but we only have one property and would like to at least try by ourselfs first. It's only 10 mins from out PPOR aswell.

 

Landlords tools and checklist

Good luck.

 

You can download rental agreements from the internet. One downside is that people that are on the official lists (as in poor payers etc) will apply for those not rented through an agent. I write on the add- subject to TIKA searches. Might discourage some? Make sure you follow the rules and know proper procedures to avoid fines. Eg lodge the bond ($10,000 fine).

My daughter rented her house to a "lovely" working couple (one a nurse). They paid eventually but she had to nag each month and they always had different excuses.
I rented 2 myself but they were rented through an agent when I bought them. I rented another with no problem, close to my PPOR.

You could get an agent to advertise and get a tenant but you take over the rent from there. They usually charge 2 weeks rent.

 

I always use a professional PM to find tenants then take over from there.

You will need to treat this like a business: check the rent is coming in on time and chase up late rent immediately, regular inspections with written reports, undertaking repairs etc. You also need to know the process for issuing breach notices and keep proper records in case you have to go to the Magistrate's Court. Everything in writing.

There is a lot of what you need to know here: Landlord / lessor

and here: Renting out your Property a Lessor’s Guide

 

In high demand that might work out, however in the current WA market agents are gunna look after their long term income and fill vacancies for their LL's first.

 

TICA

If the property is in WA. Dept Commerce site and REIWA site will probably have 99% of what you need. It's all fairly straight forward filling out paperwork and collecting the rent each week - where people often slip is when they get oddball questions, or the relationship turns sour.. most don't have the know-how, and / or the mental resiliency, to work through those situations.

 

I'm surprised you only received incremental benefit in airbnbing out your property- what sort of occupancy did you have? If in a good area I would suggest pressing on with that rather than self-managing a traditional rental. (happy to take a look at your listing if you like!)

 

I just did a lease only through a pro PM in December last year. He was happy for the business.

 

I have about 65-70% occupancy. Only 3 days empty this month .
It's the bills that kill it. I'm sure people come in out the AC on 18deg open all the windows turn on all the taps and go out for the day haha. Stroll to beach or dip in the pool - Houses for Rent in Rockingham, Western Australia, Australia

 

@D.T. is right about this. A lot of our professional property managers don't even have the know-how, and / or the mental resiliency, to work through those situations where things go wrong.

You have to be willing to take your tenants to court if things go wrong. I have done this twice, once in WA and once in VIC. Both times I got awarded part of the bond.

 

I'll ask some PMs and see why their reaction is to finding a tenant for me. Could work out that way.
Thanks for all the help people.

 

Happy to take someone to court if they don't pay etc.

 

A booked week is like $900/week. What would you get as a normal rental? Maybe $350 a week? A little more?

I can't see how you aren't making a decent profit - my airbnb has very similar prices and vacancy rates and I would make around 1.8 to 2 times what I would get as a normal rental.

 

Looks lovely.

However, we could not stay there. Hubby is over 6 ft tall so a standard double bed not long enough. Would suggest at least one queen size bed.
Marg

 

Hi weejimmy, we advertise ourselves on websites using portals like ForSaleByOwner. There are other similar portals around .. Cubbi, ForSaleForLease, etc... It's a straight forward process

The downside when you sign tenants up yourself is that you can't do a check on the tenancy database.

 

In my opinion, it's always better to use a property manager vs managing your own. Managing your own property is too much trouble for what it's worth. I've been there done that for my properties and in the end. It's just not worth the little bit of extra money when you consider all the time you spend looking for tenants, doing inspections, contacting tradesmen for repairs among many other little things.

Trust me, I work for a company which does end of lease cleaning and see the results of having a bad tenant on a regular basis. Best to pay for someone else to take care of it.

 

Yep, sometimes you have to learn from your mistakes, Hindsight is priceless.

Like @FelixW and many others I did it myself initially, in short it can be a roller coaster of uncertainties, stress, frustration etc.

Whilst it's similar to running a business, unlike retail etc it's predominantly unsupervised, you can't pop in every couple of days to check all running smoothly, suddenly things go to shiet... have to act quickly and effectively.

Whilst you'll always have concerns, for ~15% annually off the top life is a lot simpler paying someone else to manage it for you.

However, like any business, finding the right manager/staff is the difficult part.

Unfortunately, unlike an employee in business, like politicians/professionals, PM's are rarely accountable for their negligence etc.

 

I'm surprised Roco does this well (council have any issues with it?), might have to research it for Mandrah.

This seems to be the main issue your having, had you lived there previous to know utility usage with retic, pool etc?
How do others deal with outgoings like this? @thatbum ?
I can see how some occupants would have little care factor to utility bills/environment etc, all inclusive etc, like a hotel but they have those things that work with the key or something, turns it all all when you leave the room.

Considering occupancy rate it seems you don't have to worry about it, however at first glance the first thing I noticed is the pics are grainy, professional ones would be ~$150.

 

I understand your position - financially in Perth at the moment it is really difficult to decide to have a PM manage with such low rental returns and rates on the rise especially for investors. If I had a choice - Ideal world I would pay a great PM what they are worth and set and forget. However that is not the position we are in at the moment.

No doubt - self managing is not a happy happy joy joy experience but it definitely can be done. Please keep in mind I am currently not in PAYG employment so I have "a time to do this” factor that you may or may not.

I have self managed for 7 years now/ 5 properties in various areas across Perth.

Some suggestions I have in order of importance if you do decide to self manage…

1) Follow everything prescribed by the Department of Commerce WA. Their website is a wealth of information. Sign up to their new email alerts for any changes going on. Remember what they prescribe is no longer just best practice. When meeting potential tenants I am very clear that I self manage as per that outlined by the Department of Commerce - I am really clear about this. For me this helps “put off” the type of tenants you may not desire as well as reassure the type of tenants you do want, that you run things above board and put their mind at ease if they have any problems with Landlords that self manage.

2) Make sure you are priced right. You may not like the price but you have to be priced right. We have had to drop rent by $100 in some suburbs. However over three properties turned over at the same time(on ya Murphy and your law) we had total 2 weeks vacancy - not too bad. FYI recently in another suburb I dropped the price to meet market - phone didnt stop, had application first day $40 above advertised price (and offered even more days later) and had it tenanted in 3 business days.

3)Advertising is very important - the presentation of your property and how people feel looking at initial photos is going to get them to call - emotional connection to the property. Makes sure you have professional photos done. (it seems your photos are perfect on the Air bnb add - just the quality is a little blurred but this could very well be the website or the format of pics you have used). As WestOz mentioned - approx $150 for good photos. I also put a video on my rental ads but it is part of my business so is an absolute no brainer.
Just a suggestion if ok (and feel free to ignore - everything is subjective), I would change your first photo from the pool to either your living area or the front of the house if advertising to rent.

4)Use one of those self advertising companies to get on RE.com, RENT etc. I normally use My Property but not much in it between them all.

5)Cut and paste your copy and run the exact same ad free on Gumtree. Honestly do not be afraid of Gumtree - I have had the best response and some of the best tenants come from Gumtree.

Remember if you self manage - it is up to you to trust your gut instinct on selecting tenants. I know it can get hairy when you are not getting calls and enquiries but always trust your gut. I have got to the point where I think I need to accept what my gut is telling me not to and hubby reigns me in…sure enough the right tenant comes along.

When self managing my advice is to remember people first/ business second. Some tenants will be difficult, some will be a breeze. I find the really frustrating requests - I have a little dummy spit in private, stop and look the request from their perspective and then assess what is a decent request and what is outside of reasonable. However by selecting tenants myself and building a warm but professional relationship with them, really haven't had too many unreasonable requests.

I suggest asking your self - are you ok with looking at facts/ researching policy etc and if things get difficult, sticking to the facts and being able to stand by them (be it you like what the facts are or not). Are you able to have difficult conversations with tenants in a professional manner? Do you consider yourself to have good instincts? Do you have time to allocate to issues if they arise?

For me there are months where the birds are singing, rainbows are spitting out baby unicorns and all is great…..then…there are the other weeks/ months/ days that you cant help ask why you do it.

The reason I do it is financial, I have the time to do it/ flexible commitments mean I can address things when they come up and probably heard too many scary PM stories. Like I said though - if my situation was different and I knew a PM was brilliant as there are great ones out there, my decision would be different.

Good luck and let us know how you go.

 

Great post sasim.

I also self manage.. so far no issues! I am really lucky though that the rental market down here is really right so my great tenants keep renewing. So I spend very little time managing these properties.

But I also know if friends who are chasing up rents EVERY fortnight!