Tempted to self manage Residental Property

Discussion in 'Property Management' started by willister, 12th Dec, 2016.

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  1. willister

    willister Well-Known Member

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    Hi,

    Long hiatus since I've last posted. Currently have a residential property - tenant is lovely, a mother/daughter couple (both work). Extremely clean and dare I say property was better since they have lived in it than before they moved in. Granted, i did do extensive kitchen and bathroom renovations before they moved in.

    The current Property Manager is relatively good in correspondence between me and the tenant(s) but of late, I think he has dropped the ball a bit and I'm starting to question if they are really worth the $110/month or $1,320 per year I'm paying. Tenants are great and they are willing to stay on another year or so if I was to replace a dead air conditioner - which wasn't exactly in the best condition to start off with. Machine and installation costs would equal more or less $1300, I'd love to keep them but I'm thinking the money used on agents may as well be used to benefit both me and the tenant instead??

    Would you guys self manage? I really can't see value in the the PM except for things like property reports - I can do this myself as I'm relatively free on weekends The only thing is, it is likely after 1 year, this tenant will move on and I'm likely going to need to call them again to get new tenants. Small job, I know compared to what others on here are managing but I think it would be money well spent on better things.
     
  2. Ross Forrester

    Ross Forrester Well-Known Member

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    I would still have the PM on board.

    Resi tenants can get into trouble financially and it is really hard to kick them out when you know them.
     
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  3. eskander

    eskander Well-Known Member

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    I used to think like this until I ran into a small issue that needed fixing. It seems like you just need a better property manager. A good PM is well worth the money (even before tax) and should be making you money. They'll be actively managing the tenant, looking for areas to increase rent, doing maintenance, releasing negotiations etc etc
    You're not in Adelaide but @D.T. and @Xenia can probably tell you a bit more about the difference between an ok PM and an awesome PM of which they both are :)
     
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  4. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    I've done both - self managed and used a PM. I wouldn't bother with self managing again. We did it initially because we had some bad experiences with a local PM - but now we've got a good one and it makes life so much easier.

    We have no involvement with the properties at all. No dealing with maintenance requests, extending leases, changing tenants, paying property related bills. Yuck! Have so many better things to do with my time.

    Cheers

    Jamie
     
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  5. D.T.

    D.T. Specialist Property Manager Business Member

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    It might look to you like rent is flowing in every month which is happy days.

    The part you don't see is them taking tenant enquires - basically like an outsourced help desk for their questions, maintenance requests etc, do you have time to respond to these within legal timeframes?

    They're also keeping legally compliant records of rent received, expenditure and ledgers. Bond claims and insurance claims need these.

    Good tenants don't always stay good. Can never tell when someone will lose their job, lose their partner, mix with the wrong crowd etc. They suddenly become a lot less lovely when they're facing eviction. This is something you'll need to learn how to play systematically with a straight bat.

    And then at the end of their lease you need to either renew them or end them within the required time frames. When signing up a new one, are you allowed a day off work to do all the setup this requires?

    Small price to pay for an investment partner who has your back around the clock IMO.
     
    Last edited: 12th Dec, 2016
  6. Xenia

    Xenia Well-Known Member

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    Thank you
     
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  7. MTR

    MTR Well-Known Member

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    No I would not ever again.

    Did it many years ago when I was green, naïve and stupid.... my tenant became a pain in arse continually phoning me.

    I also don't have the right personality to deal with tenants, I am too soft.

    They tell me they don't have money to pay rent, I give them an extension, they tell me they have marital problems I become their marriage counsellor.

    But I am tough on property managers:p
     
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  8. Xenia

    Xenia Well-Known Member

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    A good PM is one who can act under pressure, knows the law well enough to pull you out of legal situations, can represent you well at tribunal hearings, not because their ego takes over and they want to put the tenant in their place but because they are experienced enough to know when to speak and when to shut up.

    Experienced PMs can turn things around when $hlt hits the fan, while inexperienced ones will buckle under pressure and you end up with a bigger cost at the end.
     
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  9. MTR

    MTR Well-Known Member

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    I have dealt with at least 1 or 2 drop kicks and I agree with you that is why never again.

    MTR:)
     
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  10. wylie

    wylie Moderator Staff Member

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    I'll go against the trend and say I've never, ever paid for management. I've been a landlord since I was about 18 (from memory). I learned from my parents and I find it very easy. I've had less than a handful of problems in all that time, including the problems my parents had. But I do have a good grasp of the rules and regulations. Anything I don't know, I can easily find out because in Queensland the Residential Tenancy Association is approachable and helpful.

    If I hadn't learned the ropes from my parents, I likely would not be happy to self manage. But it is easy for me and I enjoy it, and have the time to spare. We also have a relationship with our tenants due to length of time of the current leases. I don't find they take advantage of us at all. Quite the contrary. But I acknowledge that this is down to the choices we have made, great tenants and mutual respect.
     
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  11. TMNT

    TMNT Well-Known Member

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    I would rather go and live with my ex wife than self manage!!
     
  12. MyPropertyPro

    MyPropertyPro REBAA Buyer's Agents Sutherland Shire & Surrounds Business Member

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    I've done both as well and this quote basically sums it up for me. They're always great tenants until they're not and when it turns, you need time and professional knowledge to sort it out and in a timely manner before it affects the investment return overall. Without question I would be sticking with a PM, but it does sound like you need to find one who provides a better service and values property investment and you as a client, not just your money.

    Where is the property located? I can refer you to an excellent PM in almost all states who will provide you what you need in a PM service.

    - Andrew
     
  13. willister

    willister Well-Known Member

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    Thanks for the many responses, it is evident I should stick with some PM to back me up.

    I'm curious though of what people get their PMs to do? Here is my experience with this one (large franchise, using the local one where my residential property is located - Vic).

    - Chases up payment (well, not really as I'm told the tenant pays on the dot).
    - Directs correspondence, the mother is an older woman and does have a few things to yap/complain about.
    - Maintains the book keeping records.

    Say if a maintenance issue arises e.g. a small tap that needs tightening, what do people usually do? Do you direct this to the PM and say "fix it" or do you DIY? I've had a few requests now and again to do the odd job to tighten taps or fix small issues around the place like internal door locks.
     
  14. Hedgy

    Hedgy Well-Known Member

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    I say to hell with self managing. For the sake of saving $1320 (even less after tax deductions) I really couldn't be bothered with the hassle of managing the property and tenants myself.
     
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  15. Brady

    Brady Well-Known Member

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    Self managed 1 property once, only property to have unpaid rent and tenant damage.
     
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  16. Hedgy

    Hedgy Well-Known Member

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    haha...hope you fired yourself and got a professional.
     
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  17. Perthguy

    Perthguy Well-Known Member

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    I can't be bothered managing property managers. I would rather manage tenants than property managers. In my experience, tenants are easier to manage than property managers. Of course this depends entirely on your tenants and your property managers.
     
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  18. Perthguy

    Perthguy Well-Known Member

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    My parents had a string of "professional" property managers. This was one of the biggest RE firms in Melbourne. Some highlights:-
    PMs let the tenant get more than 3 months behind on the rent
    PMs refused to conduct regular rent reviews, by the time the tenants left the property was ~$150pw under market rent.
    PMs demanding "structural" repairs to cosmetic damage
    etc

    Estimated lost rent over the time the property was mismanaged is around $4k. I was self managing at the same time in Melbourne, conducting regular rent reviews and had zero missed payments at the same time.
     
  19. MyPropertyPro

    MyPropertyPro REBAA Buyer's Agents Sutherland Shire & Surrounds Business Member

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    Personally, my experience with bigger franchise/licenced brand PMs is that they're cash flow bolt ons to the sales division, often started to give the agency value without adding any customer value. They view it as a real estate entry point and employ underpaid, young and inexperienced staff whose sole motivation is doing their time on the "wrong side" of real estate before they move over to the sales division to make the 'big bucks'. The whole philosophy is backwards and undervalues PM in so many areas, I don't even know where to start.

    My advice would be to find an agency that specialises in PM and has an intrinsic motivation on both a business and property investment level to provide professional property management and treat both yourself and your customer (the tenant) with respect whilst managing the relationship on your behalf and looking after your interests.

    Seeing as your property is in Victoria, I would start by giving @Lil Skater a call to check whether it's in her service area. I don't think you'll be disappointed there and if you run a search for some of her posts on here, you'll see what I mean.

    - Andrew
     
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  20. Hedgy

    Hedgy Well-Known Member

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    @Perthguy I guess it is a favourite past time of landlords to whine about PM's. There are some very good PM''s out there--I guess as a landlord you need to be able to pick the good ones. My current PM is absolutely amazing and no way I'd go through the hassle of self management just to save a few bucks. Each to their own.