What are the Problems with Self Managing Investment Properties

Discussion in 'Property Management' started by Ben99, 1st Dec, 2021.

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  1. Ben99

    Ben99 New Member

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    Hi Everyone,

    I have an IP, which is a house, and it is currently being tenanted and managed using a property manager. However, I was looking at saving some costs and was planning to start self managing this property myself so I just wanted to seek some advice from anyone that has experience self managing a property on two things:
    1. What are the major problems/ time consuming tasks of self managing that I should be aware of?
    2. Are any cost effective services I can use online to assist me in these?
    I live close to the property so regular inspections would not be a problems and the tenants are long term and haven’t been any trouble so far.

    Thank you for your advice in advanced!
     
  2. thatbum

    thatbum Well-Known Member

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    I don't recommend self managing unless you know what to do if things were to go wrong. For example, do you know how to terminate the tenancy for breaches or rent arrears?
     
  3. Piston_Broke

    Piston_Broke Well-Known Member

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    The main one is that they don't do enough research and often have problems finding a search bar often situated in the top right hand corner.
    Other problems is that they are poor negotiators, not very good at dealing with wingers, no idea of legal regulations, lack research skills and many many more.
    But that's just my opinionated opinion.
     
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  4. willair

    willair Well-Known Member Premium Member

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    Thinking back I could give you a endless list of problem's you will experience with self management, from having the bond lodged a current lease in place as that's the first question your insurers will ask you ..

    My advice is you won't save any money self managing yourself as a switched-on on property manager is worth their weight in gold and the money just turns up in the accounts each month.
     
    Last edited: 2nd Dec, 2021
  5. Sackie

    Sackie Well-Known Member

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    Cost vs benefit.

    Getting a PM is a no brainer for me. Not to mention is also part of risk mitigation. Self manage and make a wrong step with a litigious tenant and you can quickly find yourself in a world of pain.

    Cost vs benefit. No brainer.
     
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  6. Ben99

    Ben99 New Member

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    Hey all, thanks for your words of advice. I see there can be many problems with self managing so I will do some further research into how those problems be effectively mitigated before deciding to make the switch!
     
  7. Ronen

    Ronen Well-Known Member

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    Just like @thatbum said: it's all coming down to how well you deal with conflict, do you stress easily and are you able to financially cope lose due to rental issues.

    Having said that, none of those are certain to be reduced with a PM.
    In many cases (for me - all the time), it'll be even worse cause a not-so-good PM can create more damage than good.

    I had PMs to manage my properties and I found them to be totally useless.
    They didn't do anything they were getting paid (quite nicely) for; from the PM that did condition reports and managed to see the crack in the shower screen and said it needs to be paid, but missed the fact the tenants had 2 unapproved dogs in the property, to the PM that antagonised a tenant I needed out in the middle of the VIC COVID eviction moratorium.

    I found that I need to be very hands on even with the PMs, so I switched to self managing.
    It was not the money, it was the fact that if I have to do anything anyway - why do I need them?

    My first tenants, self managing, was an ice bath to get me going....
    I got them with the property and they tried every trick in the book, including getting a tenancy lawyer (who tried to threaten me, but was uniformed of what really happened).
    I managed to get rid of them on my terms and now things seems to go much better.

    I had to study the rei act and regulation, build my own forms, follow the book to the word - but once you do it, it's pretty straightforward.
    The act is very accurate in what you can and cannot do and how everything should be done.
    If you're a reasonable person (and a LL) and you understand that sometimes people are just stupid - it's all part of the game.

    I never say never, but right now - I'm happy to keep self managing.
     
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  8. Angel

    Angel Well-Known Member

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    If you are even asking this question, it suggests to me that you require a PM. After twelve months, if you believe you can do their job perfectly, then revisit this question.
     
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  9. thydzik

    thydzik Well-Known Member

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    I would say this is the biggest issue with self management, you need to not take anything personally and play the game. Else the whole thing will just be stressful when things don't go smoothly.
     
  10. wylie

    wylie Moderator Staff Member

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    I self managed our IPs (small number) for over 40 years, learned from my parents.

    I know the rules, and had less than a handful of issues over all that time, over dozens of tenants. Same with my parents.

    Gut instinct is what we relied on back when times were different (newspaper adverts before internet, even when real estate sites were up, we couldn't use them for years like we can now, no TICA checks for private landlords, etc).

    Our son used to be a PM and he told me once that because I didn't document regular inspections, any insurer might not cover me if we had issues.

    We did get inside the houses when we had any issues, plumbing, electrical repairs etc. So we knew how they were kept (long term tenants in two houses).

    I started documenting my visits but our DA and townhouse build prompted me to hand it all over to be managed.

    Benefits for me are not having to lift a finger. And our PM is increasing rents as leases become due (increasing them more than I would have, due to the personal connection).

    That personal relationship with our tenants also meant we could get all sorts of people into the houses (mostly into the back yards) to do the things required to get the DA through (building designers, town planners, civil engineers, soil tests, etc). In return we did keep rent a little lower than market while this disruption was going on. Win/win.
     
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  11. Piston_Broke

    Piston_Broke Well-Known Member

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    Many years ago when people still remembered dinosaurs I had an IP jointly owned.
    The other owner gave me the talk about how he would collect the rent blah blah.Not wanting to argue (if you can believe that) I reluctantly agreed.
    One day he asked me to go collect the rent. Wasn't happy to but I went and got a sob story as to why the tenant could'nt pay that day. I'm sure the co-owner knew what was happening.
    I just said something like "Mate, if I miss my interest payment I'll have to get somone who can pay the rent" and left.
    Drove straight to the REA's office and engaged a PM.
    The other owner complained, my response was "You can go and disengage the PM if you want, but you'll also have to put the property on the market or buy me out."
    The PM worked out well.
     
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  12. Sackie

    Sackie Well-Known Member

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