Property Managers are they necessary?

I managed one IP for a short period of time... time vs cost wasn't worth it.
The PM gives me an extra layer of separation.

I found it harder to decline requests when the tenant asked.
I found it much easier to decline through a PM.

In addition, the PM does a much better job of vetting tenants than i do.

 

Don't underestimate the power of this either. It's not just the requests, it's things like rent rises as well. Say you want to put the rent up $20pw, and the tenant cries poor. Could you stand there & say "tough, rents have gone up"?

 

Most people would think they can... until they are confronted by it....

I thought i could...... but i failed
So now I have a PM.

 

Gosh! I didn't realise what a thick skin I had ...

 

The tenant know that the LL is the one who is asking for the rent to be increased (well most likely) and they are not the decision maker (DM) in the process. All the PM could do is take a message and come back with an answer, where when you self manage you call the shots and they have a direct line to you the DM!

 

im far too lazy to manage my own properties so i dont. having said that, WA would be one of the few places where it's worthwhile at least considering self managing. the fees here are ridiculous

 

Its very important if you self manage that you start off the tenant/owner relationship on the right foot, i.e. let the tenant know the rules and be willing to take action if the tenant breaks those rules.

Most of our tenants over the years have been pretty good with only a few being the exception.

 

My first IP was with a PM.
It was a terrible experience. The PM did not inspect the property at all and left my property unmanaged for 3 months.
I took it over and never looked back.
At the moment, I self manage all my 5 properties.
It saves me $160+/week.
I am an organised person and all issues were clarified, recorded. prioritised and rectified within the agreed time frame with tenant.
Most property managers manage 20+ properties so my ones are not special to them.
I ONLY manage mine, so every properties are special.

 

For repairs, I use
1. (NSW only) NRMA Emergency Home Assist for emergency plumbing/electrical works.
2. serviceseeking.com.au and hipages.com.au to get tradies
This prevents some dodgy PMs from getting kickbacks from tradies.

 

Yes, you can do it yourself. You could try it and if you decide it is not for you then engage a PM. It is easier and less time consuming, than managing a property manager. You can still out source everything. It is easier cheaper and only takes a minute to call a tradesman, than going backwards and forwards with a PM and their overcharging tradesmen. I don't know why you would get called out at 3am but if you are worried about that turn your phone off. I suppose it depends on the vacancy rate but I found I could get significantly more rent than what PMs said I could get. The PM said I could only get $260 on 2 houses but I got 330 for both, one was signed up before it became vacant, the other had a tenant with hours of it becoming vacant. You can also save letting fees, besides the $25/week. on 2 properties the savings are not insignificant.

 

Agent said that he could get me $500/week.
I rented it out myself and got $620/week.
If all my properties are all with PMs, it would have cost me $160/week.
I'd rather spend some time doing property management and save $160/week for my family or for something else that I really need to engage professional (eg. plumbing, electrical, depreciation schedule)

 

Be warned. Managing properties yourself requires client management skills.
If you are not comfortable of handling clients, you need PMs.
My daily job involves client management and that's why I feel comfortable at managing properties myself.

 

It is also an option to use a property manager to find tenants, prepare the ingoing property condition report, prepare the lease and lodge the bond. This is what I do.

Once suitable tenants are found then I take over management myself. I have had some issues but I know the legislation in both WA and Vic where my properties are and have successfully taken tenants through the tribunal in both WA and Vic.

If you are not inclined to know the legislation, follow it, deal with tenants and organise repairs and even take tenants to the tribunal, find a good property manager. The problem is that some property managers are worse than useless and end up costing the owner money instead of taking away the hassle.

 

How much does PM charge you for that?

 

Depends on the agency and which state. I will get some exact numbers when I get back to the office, but from memory about $900. Personally, I think it is worth it because the agents have access to the tenancy database and I don't. It's also difficult to run home opens for a property in Melbourne when I'm in Perth ;-)

 

Note that if PM is going to any tribunal for you, you still need to pay extra for that.
Don't assume that PM will do everything for you for the standard property management fee.

 

And don't assume they won't

 

Get a PM for the win.

Leverage and scale, it's a business.

If a PM fails, move on to another until you have a reliable and solid team supporting your strategy for growing your wealth and creating the lifestyle you desire.