Questions on self-managing

Hi all,

I am trying to find out more about self managing rental properties. We have been using property managers up to now, but have been wanting to see if we can self-manage.

Now a question to start with, where do I advertise for tenants ? We normally get the PM to advertise on realestate and REI websites, but I don't think landlords can advertise directly there ? Is there any other alternative websites that tenants frequently check to find rental properties ? I came across cubbi and forsaleforlease, but they do charge around $200 to list a property. Any inputs is appreciated.

My second question, other than the Department of Commerce websites, is there any other good resources to learn about rules and guidelines for managing rentals ?

 

They can't advertise directly, but you can use services such as the one you mentioned. There's a few others about, they cost about $200 as well I think.

You'll also want to do reference checks and background checks that your PM would have (hopefully) done. If you look up TICA there's some packages to suit self managers there. Refer to Tenancy Tip Thursday - Tenant Databases for legislation surrounding their usage.

Other than that, all I can suggest is you learn the Residential Tenancy Act for your state very well and keep your eye on Dept Commerce and REIWA website for fact sheets, forms and announced legislation changes.

What's the main reasons for self managing?

 

You could always use a PM to search for the tenant and then you self manage.

Read up on your states tenancy legislation and there would be plenty of online material from your states governing authority.

Getting the right tenant and understanding the law are the two most crucial aspects I believe to self managing.

 

Self managing is a PITA - been there, done that - never going back.

It's just not worth the hassle.

We (well I can't take credit - it was my wife) self managed because we had bad experiences with property manages. We did it for a few years - and it was painful at times.

Granted - 90% of the time it was easy but when you start getting phone calls at 3am (flooding in the property) and tenants vacating when you're on holidays (had two leave without much notice) you start to realise that it's not worth the time/effort.

A good manager makes life easier.

I'd prefer to distant myself from tenants as much as possible!

Cheers

Jamie

 

+100 to this.
Absolutely not worth the small amount you save, and that amount is deductible.
When there is an issue, just think about how much a PM is getting per hour.

 

Its usually not financial reasons people self manage. It's usually either:
- bad experiences with PM before
- its family or friend in the property
- they enjoy it (insert string of conditions they must have here )

Sometimes people will have me find / check tenants so they can manage themselves. I'm cool with that in some areas.

 

Consider the asset protection aspect. Any blame will fall directly on yourself, whereas if you had an agent blame can be shifted them them in some instances and they would have professional indemnity insurance.

 

You're probably right.
I'm thinking more of the 1st timers who think they can just do it themselves.

 

Part of work is managing commercial property and there is no way that I would manage my own residential investments.

I can achieve better $$ for my time.

 

Hi @chibs,
Have you Heard of SnailApp: Snailapp | DIY Property Rental App | Snailapp offers landlords the opportunity to source tenants directly with a built-in messenger service allowing direct contact between tenant and landlord.
It's for DIY PM's. It's quite a new app, but worth looking into.

 

Hi @chibs

Self-managing is a tough gig. Keeping across legislation, being the enforcer when necessary, no thanks.

It is important to identify what are the reasons you want to self-manage? To save money? Are you unhappy with your agent?

If the answer is to save money, be aware insurers often charge a higher premium for self-managed properties due to the higher risk of problems. Also be aware that you need to spend a lot of time keeping across legislation to ensure you don't trip yourself up. One mistake could cost you far more than paying a property manager for a whole year.

If you are unhappy with your agent, identify the issues and discuss with them your expectations. If you cannot resolve it, moving to another agent is an option.

I am not keen to self-manage. I choose to be quite involved, but ultimately still have a property manager watching over things.

You can "save money" by spending time researching things you'll inevitably have to pay for. Understanding common problems that happen in properties and the appropriate resolutions tradies would follow. Understanding products available on the market to get issues like old or damaged curtains replaced cheaply. That is a much better use of time I think.

 

That's the main point, being able to do more with your own time.
Let the experts look after it.

 

You can self-manage but will need to learn some things first. I have been self managing in Perth and Melbourne for around 10 years. A couple of hiccups but no major issues so far.

I pay a real estate agent to find tenants. There are a numbe of reasons for this. Agents have access to tenant databases. I don't really want to spend to the time conducting home opens or following up referees. Paying agents to find tenants has worked well in Perth and Melbourne.

The Department of Commerce website is the best resource I have found. I have also found Propery Chat very useful.

In terms of why... I have seen too many tenants stuffed around by idiot 'professional' property managers. I don't want my tenants treated like that. When my tenants have an issue with one of my properties, I like to have the issue resolved by close of business the same day where possible. This doesn't always happen with a property manager.

Nothing against people who pay someone to manage their properties. There are many fantastic property managers around and they are invaluable. However, you don't control who the agency appoints to manage your property and this can be very expensive. My parents had a great property manager who was replaced by an idiot. New PM did not do regular rent reviews and left the rent at the same price for so long the rent ended up way under market value. He also let the tenant get several months behind on their rent. He didn't put the rent up even though my parents instructed him to in writing. All this cost them a lot. They complained and got a new PM, who was also an idiot. I blame them. You can manage tenants or manage your PM but you can't just let it go. Either way can be costly.

My tips for self-managing:
- you are replacing a professional so treat it like a job and take it seriously
- learn as much about the legislation and regulations as you can and follow them. Also keep up to date with changes.
- conduct regular rent reviews and increse rent when required in line as permitted by your tenancy agreement, legislation and regulations
- do your regular inspections and provide written reports
- don't be afraid to issue breach notices when required
- be prepared to take your tenant to the tribunal if things go wrong

Ask questions on property chat if you are not sure.

 

Or they are a control freak like me

 

That comes under the enjoying it option I provided. Some because they're control freaks and others because they're too naiive to know any better

 

Ignorance is bliss.

 

Agree. Property Management is the entry point into the real estate industry. For every 1 good property manager, there are 9 complete imbeciles. A lot of times its a lot less effort dealing with the tenants than with the property managers.

 

It's true it can be entry level and there are some fairly ordinary PMs around.
But if you get some recommendations and do your research you can find the good ones.

 

Thanks for the reply all. I am aware that self managing can be a lot of work. My reasons for wanting to self manage are as follows:

1. My situation has changed from working full time to a stay at home mum for the time being. I thought I can use my spare time to educate myself on self managing and the best way to learn is to do it. We plan on taking on one to start with (and it's a brand new house) and if we can take on more gradually once we get the hang of it.

Of course, we might discover that self-managing is not for us, but I don't want to make that conclusion before we actually give it a go. We can always turn back to property managers if it doesn't work out.

2. We struggle to find a good property manager. Initially they are okay, but their service goes down hill after. So we have found that we have become the managers of the property managers. We have to chase them up and proactively ask questions, the time we use to manage the PMs might as well be used to manage the tenants. With one PM, one of our IPs have been left without tenants for 6 months. Everytime we chased up, they would say no interest, rental market is bad etc. And yet, we don't have problems finding tenants for other ones.

3. To save money. Here in Perth, PM fees are very high. Combine that with falling rental income and increased interest rates for investors. And for multiple properties. The number is not pretty. To give you an indication, with one agency we pay 11.5% flat + gst + 1 wk leasing fee, with another we pay 8.5% +gst + inspection fees + 2 wks leasing fee + sundry + stationery + letter handling fee + meter reading fee + whatever other fees .. it ends up being close to 20%.