- 07 Nov 2024
- By API Magazine
Self-managing an investment property is a time-consuming and stressful task that can ultimately cost more than it saves.
In the current economic climate often, where everyone is looking to save money wherever they can, there may be a temptation to self-manage an investment property.
But there are reasons why paying for a good property manager may ultimately save more than it costs.
The average property management fee for rental properties in Australia is typically around 6 to 8 per cent of the monthly rent. This can vary depending on the location of the property, the type of property, and the level of services provided by the property management company.
It is worth checking, for example, whether routine and final inspections are an additional expense and if so, how many of those are conducted every year. Subsequent inspection reports may or may not be included in that upfront percentage fee, so can have a big impact on the total property management cost.
Once all the relevant costs are assessed and time involved in self-managing is factored in, it is time to weigh up the pros and cons of having an investment property managed professionally.
Here are five factors to consider:
Keeping vacancy periods to a minimum
Having a dedicated and skilled property manager managing a vacancy will ensure the investment property is tenanted as quickly as possible.
A property manager should advise on where the rental value of the property sits and provide information on whether any adjustments are needed throughout the advertising campaign.
Advertising at the right price for a specific property type relative to the market you are advertising in is key.
Ensuring the property is priced appropriately will attract more interested parties through the door and lead to the most suitable candidates submitting applications.
Finding good reliable tenants
A property manager will coordinate home opens at optimal times so that all interested parties are able to come through the property and encourage applications to be submitted.
The property manager’s experience is crucial at this time in assessing all applications and ensuring reference checks are completed along with database checks to ensure the applicants have a good track record.
Finding a tenant with excellent references means rental payments are more likely to be received punctually and that the investment property is maintained to a high standard.
Keeping track of rent payments
Your property manager will be able to easily monitor all payments coming in from your tenants daily.
Any delay with monies being received will be picked up early and followed up.
If the tenant does fall behind, an efficient property manager will be able to manage this situation to ensure payments are brought up to date as quickly as possible.
If in worst case scenario your tenant is unable to make further payments the property manager will have a full arrears procedure in place that is designed to minimise your losses and navigate the process involved in resolving the issue.
Asset management
Your property manager will be able to advise on maintenance items that need addressing while managing the asset at its optimum financial performance level.
Perhaps you want to increase the rentability of your property, or alternatively only deal with necessary maintenance for a period of time. They will also be able to arrange regular servicing on some items in your investment property as a preventative measure and ensure the property is compliant with your state’s legislation.
Regular routine inspections can also detect any issues before more expensive deterioration occurs.
A well-connected property manager will have a list of regular contractors with whom they have established relationships to achieve a quality service at a competitive price.
Saving time
Ultimately, managing an investment property is a time-consuming and stressful task. Employing a property manager frees up your time and ensures a less stressful experience while the investment grows. Time, after all, is money.
Property managers have the systems in place and the experience to look after an investment property efficiently.
Article Q&A
What are the advantages of using a property manager?
Using a property manager, as opposed to self-managing an investment property, can keep vacancy periods to a minimum, secure reliable tenants, ensure rental income flow, enhance the financial performance of this key asset, and save time.
How much does property management cost in Australia?
The average property management fee for rental properties in Australia is typically around 6 to 8 per cent of the monthly rent. It is worth checking whether routine and final inspections are an additional expense and if so, how many of those are conducted every year. Subsequent inspection reports may or may not be included in that upfront percentage fee.
