Should you go it alone in property management? 16 questions to ask yourself first
GUEST OBSERVATION
DIY property management seems simple – and it can be – until something goes wrong.
The reality is that not everyone has the skills, time and temperament to successfully manage their own investment, particularly one of this size and scale.
With 20 year's experience in landlord insurance, I can tell you that tenancies being self-managed by investors go pear-shaped more often than assets that are managed by a professional – they are subject to more claims.
Why? Tenants with a poor record deliberately target private landlords who don’t have access to industry databases recording people who have defaulted in the past.
Also, private landlords can be slower to see the danger signs of a tenancy that’s turning sour and may fail to nip problems in the bud.
Some are too understanding for their own good, letting unpaid rent add up and being slow to initiate eviction proceedings.
It’s not always the tenant’s fault – sometimes landlords also prompt anger by failing to live up to their obligations when it comes to repairs.
Still not convinced of the value of professional property management? Ask yourself these questions before going DIY:
- Do I understand tenancy legislation?
- Am I organised and a great record-keeper?
- Do I know going rates in the market, and have the confidence to negotiate regular rent increases?
- Do I have access to quality, reliable trades people?
- Am I available to supervise trades people at short notice, if required?
- Do I feel comfortable with the tenant having my phone number, and effectively being on call to them 24 hours a day?
- How will I verify that tenants are who they claim to be?
- How will I find out if tenants have previously been evicted or have a poor history?
- Do I know the warning signs for a clandestine drug laboratory or marijuana grow house?
- Am I organised and assertive enough to chase up late rent immediately?
- What am I going to do to manage the tenancy if I go overseas or on holiday?
- Could I bring myself to evict a family, or a person who has fallen on hard times?
- Do I have the time, expertise and confidence to go to a tribunal and publicly argue my case, if necessary?
- Will my landlord insurer cover me if I self-manage – and, if so, will the premium rise as a result?
- How much will I save, after tax, by managing my property myself?
- Is my time worth more, or better spent, on other priorities, once the potential stress is taken into account?
Sharon Fox-Slater is general manager of RentCover landlord insurance, which insures more than 120,000 tenancies around Australia, and is a division of EBM Insurance Brokers.
