Property management has been around since ancient Roman civilisation – where Grecian cities appointed men to manage properties and collect rents.
Fast forward to the modern day and the role of a property manager has without a doubt evolved to encompass far more than rent collection.
What has changed in recent years though, is the question of whether a landlord should self-manage or hire a professional property manager.
One of the main reasons for this shift that is faced by many Realtors is staff turnover.
Successful property management is built on trust and open communication. Establishing a relationship with the landlord and tenant is difficult to do when a property manager changes every three to six months, and often without notice.
Landlords understandably lose confidence and begrudge paying for a service that is seemingly unreliable.
While this is certainly not across the board, some companies have capitalised on the ebb and flow of the property management service industry by creating online real estate platforms that challenge traditional real estate practices.
While these newcomers resonate with disgruntled landlords by placing the property back in their hands, self-management isn’t without risk.
And many DIY landlords, who self-manage with no help at all, aren’t aware of these potential risks.
The risks of self-management:
- Not knowing the market well enough to set the right rent and attract the right tenant.
- Not having appropriate insurances in place for the type of property and tenancy.
- Not understanding the landlord-tenant relationship and obligations, rights, and responsibilities of managing a property.
- Not having the time, skill, expertise or knowledge to do proper tenant screening and background checks.
- Not having the time to keep up-to-date with compliance or conduct regular inspections and address maintenance and repairs.
- Not having the proper processes and systems in place to stay on top of rent collection and manage arrears.
So, how does hiring a professional property manager compare?
The benefits of hiring a property manager
Cost saving, not spending
Many landlords opt to self-manage over hiring a qualified property manager because they think it will save them money – on average between 5%, and 7% commission, depending on the agency – when often it can end up costing them down the track.
Professional expertise and knowledge mean setting correct rent, minimal vacancy times, higher quality tenants and systems and processes that monitor rent payment making sure you get paid on time, every month. Not to mention, management fees are tax deductible.
Property managers negotiate the rent and terms of the lease better than I could as they are experienced in this area,” says property investor and landlord, John. “They handle the tenant queries and push back if tenant requests are unreasonable. Their value and the peace of mind I get by having a property manager is worth more to me than the fees they charge.
The landlord-tenant relationship is regulated by the Residential Tenancy Act of each state and territory in Australia. A good property manager is across landlord obligations, rights, and legal responsibilities – particularly around property safety for the tenant and maintenance and repairs.
They also ensure lease agreements are documented in writing and shared with all parties.
For a DIY landlord, it can be a lot of information to stay across.
Time and Resources
Not every landlord lives within easy travel distance to their investment property and not every landlord is able to drop everything to respond to issues at the property. This is where hiring a local, professional agency to manage the property saves time and reduces stress.
Investment property owner, Lucy agrees:
We couldn’t possibly manage our own properties, we don’t have the time, knowledge or the experience. Nor do we want to. Having a property manager gives us peace of mind and allows us to concentrate on what we know and do well.
A good local property manager will arrange regular inspections and tap into their network of trades to quickly communicate and address any problems. They help to smooth tenant and landlord issues by taking any emotion out of the situation.
If you’re still unsure whether to self-manage or hire a professional property manager, talk to an expert – at Stills Properties, we’re ready to answer your questions.
Or for a DIY approach, try this quiz by appfolio: