Property Manager – Lake Balboa
The challenges of self-managing your investment property
By Pia Vogel
Over recent years there has been a growing trend in investors opting to self-manage their investment properties. There are said to be around 1.7 million property investors in Australia and of these, one in three self-manage their property.
The obvious advantage to do-it yourself property management is it’s an easy way to save money; especially when 63% of investors are using negative gearing to make their investment work. However the time and stress involved can often significantly outweigh the cost of using a property manager.
Managing a property is no walk in the park! If you have been thinking about self -managing your investment property, here are some things you should consider:
Do you have the time? There is a lot involved in the process, from: finding suitable and reliable tenants, collecting rent, being on call 24 hours a day for emergencies and repairs, holding property inspections and not to mention the paperwork.
But before you start having nightmares about it taking over your life, here at HomeSource we understand your needs and are here to help. Our service, RentSource is designed to help you maximise the returns from your investments. The team can take away all the stresses and headaches and at half the price to any other agent out there! We offer a range of service options tailored to suit different needs and budgets – from simply finding you a tenant, right up to our Platinum Service which includes appliance insurance and covers repairs and maintenance labour cost. You can read more about our five service options here.
So back to the challenges of self-management!
If you are considering this option, the most important step in the whole process is finding the right tenant. The cashflow your property generates is something you count on; so finding a reliable, honest and trustworthy tenant that will look after your property is essential. Unfortunately the process may not be as straight forward and simple as you think. You need to do everything from:
Marketing your property to the public
Arranging a convenient time for all interested parties to view the property
And carrying out ESSENTIAL reference checks, including:
Personal referees
Current and previous employer details
Current and previous landlord or agency details.
By speaking to referees you will be able to get a feel for the type of person the candidate is. Asking a past employer if they were reliable and trustworthy is a good indication of whether they will pay their rent on time.
Once you are happy you have found your ideal tenant and all the necessary paperwork has been signed and sealed you will need to make sure the property is legally compliant before your tenant can move in. For example you must have smoke alarms fitted or you could face a $5,000 fine and you must also ensure there are at least two residual current devices professionally installed or you could be fined up to $15,000.
Once your tenant has moved in, you will then need to be on hand to deal with any issues with the property, neighbour disputes and repairs and maintenance problems.
If you don’t carry out regular property inspections you could find yourself sitting on huge repair bills! And if repairs are not dealt with promptly you may find yourself exposed to a legal liability claim!
Another big issue is, tenants falling behind in rental payments. It’s really important to knock this on the head straight away as it could grow into a long ongoing problem. If the issue escalates you may need to seek legal advice as to your options with terminating the lease and end up at the CTTT
From: http://www.yourmortgage.com.au/
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