self manage, rent increase

On another note

Does anyone self manage interstate??
Without exisitnf long term tenants???

 

Even though I know how, I don't self manage my interstate properties. I'm confident I know how to spot a good / bad PM and trust in their ability to streamline my investing.

 

I believe there are some here who do.

I can't get my head around the logistics...

How do you do inspections? - flights, day off work, cabs/hire car - must add up to several hundred bucks.

Maintenance? - how do you provide a key to a tradie to perform maintenance if the tenant is not home?

 

Yeah exactly.

How do you show people propertirs. I suppose you can fly there and set it up all on one day.

What do you do if no one turns up or there is no one suitbale and a person calls and says they want to see it on a tuesday?

 

I tend to put my up $10 a week annually. $5 minimum. Tenants must get used to the idea that rent goes up. Seems harsh but if you don't put it up you'll get behind. Maybe in the case of the OP you could try $10 a week increase over 2 consecutive years? $520 a year is easier to swallow split over 52 weeks than the cost and hassle of moving in one lump sum.

 

I do. I live in Perth and have an IP in Melbourne. It is 50/50 with an investment partner.

First, we pay a PM to find a tenant, get the lease signed, do the incoming property inspection report and then lodge the bond. After that, we manage ourselves.

Tenants notify when maintenance needs doing and we arrange for contractors to make the repairs. This has not been an issue in 8 years.

For inspections, they get done less regularly than if a PM was managing. This has also not been an issue in 8 years. This will really depend on your selection of tenant. Perth has been a nightmare even with very regular inspections.

Very easy to outsource this step in the process.

I self manage a property in Perth that is 4 block from where I live. I still outsource finding a tenant. I don't want to advertise, take the calls, do the home opens etc. I would rather pay someone to do this. In Melbourne and in Perth, all the PMs I have paid to find tenants have been great and have sources me top quality tenants. I have only had issues with tenants I didn't pay a PM to find for me.

 

Do inspections when you are there anyway, outsource the inspections or have then done less frequently. In my experience, the frequency of inspections does not relate to the state of the property at exit. Well, it hasn't with my properties.

If the tenant wants maintenance done, they will be home. I have never let a tradesperson into a property when the tenant wasn't there and I never would.

 

@Perthguy
I'm interested in this approach as I have a property being built that will require minimal maintenance for some years once complete and tenanted. What are the Setup Fees like to arrange this?

 

Depending on which state, it's typically $800-$1200 per tenant. You really need to shop around to get a good PM though. I had one who was sending me tenants that were transitioning from high level care to the broader community. Not suitable for self managers. So you want to be very clear with the person you hire that you have final say on the tenant. Mine usually give me a couple of options and we discuss the pros and cons of each application. I really should start a thread on this but you have to be on top of the laws in your state and the changes to those laws. Be prepared to do inspections, issue breach notices, follow the legally prescribed process for rent increases, keep a lot of paperwork and take your tenant to the tribunal. In my opinion, if you are prepared to put the work in, it's totally worth it.

Quick example: my neighbour turned up on a summer, Friday afternoon in tears. The power was out in the house (main switchboard), she called the PM and the PM advised her that she would have to wait until Monday to have the power repaired. So, wait all weekend, in summer, with no power and a young child.

In contrast, my tenant in Melbourne texted that the plumbing was blocked. It the plumbing repaired by close of business that day. That's the level of service I expect my tenants to get.

 

Hi Kael,

Yea thats what i was thinking i'll send them a email tomorrow about the rent increase, no i've only recently bought the property but realised that they haven't being paying for water usage for the last 7 years so my xxx amount of rent is actually less. does that make sense?

 

there may be a few haha, and i like posting here anonymously so i get unbiased opinions if that makes sense? yea i remember you saying in another post about all the renters being able to buy etc and thats why theres massive vacancies in that area. it's in the ipswich area

 

Agreed!

There is a lot more to managing property than just collecting the rent, you know. I hope for your sake that this isn't a lesson that you will learn the hard way down the track.

 

yea i agree like i said above i don't intend on self managing other properties as there is a bit to it. i only did this one as the tenants have been there for 7+ years. if they left / stopped paying i'd get a property manager in.

 

Ah righto. Depending on the state (could be all states now, I'm sure someone can clarify or you can check your states laws) you need to have specific water efficiency devices installed to the home to be able to charge the tenants for water usage (you still pay water rates).

If it were me, I'd increase it to the market rent and get a water efficiency company to check the taps and devices in the home to make sure you can charge them water usage. If work needs to be done, get it done and then advise them about how you will be charging them for water usage. If they decide to move out, then interview the property managers in the area and find someone who you can rely on. Just what I would do though Good luck.

 

It will be in Qld. But I'm bundling a couple together to get PM Fees down to 6.5%. Worth weighing up though. I've self managed before for several years so no big issue. I just find using a PM more business like. Thanks for the reply as I've often wondered how setting it up that way works.