I recently met with a property owner looking to get their home tidied up and on the market for sale. Lovely home, great location but a bit rough around the edges – she was lamenting the fact that she had spent the last 3 days with her partner scrubbing the life out of the house to get it into its current state. “It’s been tenanted for the past decade” she explains. “Who was managing it for you?” I ask. “Oh, we did it ourselves…..”
If you are a property owner and you’ve found yourself uttering similar words, then it might be time (or well past time) to engage a property manager for your investment. Alongside shares and superannuation, investing in property is one of the most popular ways for Australians to build their wealth – both through natural capital growth and through the ongoing income via rent. for most people, you have little hands on control of your super fund, and the share market can be a similarly mysterious beast, but there can be a temptation to look after a property yourself. After all, how hard could it be?
If you are retired (or have plenty of time on your hands), live around the corner and enjoy dealing with people then this can be a fulfilling option. But if you don’t tick those boxes for your own circumstances, then it can be more hassle (for less reward). From tenant selection (and careful vetting), to setting an appropriate market rent, to performing regular inspections and staying on top of maintenance, the time you spend looking after your own property can quickly add up. In some cases, you might end up in the same spot as a number of owners I have met – with a property that hasn’t been maintained and costs more in repairs than it should. Even with the best of tenants though, you might find that the $400 per week a tenant started on 10 years ago (that you have left “as-is” because they are such good tenants), could well have been $500 per week or more, given regular market review. That $100 per week difference? That’s potentially an extra $5000 per year, every year or a whopping 25% extra to take into account.
In a market with tight vacancy rates and keen tenant demand, it can be tempting to DIY, but for most I can’t recommend highly enough to put it in an expert’s hands, and spend more time doing what you want to do.