If our landlord insurance claims are anything to go by, tenancies that are self-managed by investors go pear-shaped significantly more often than those managed by a professional.
On the surface, property management seems simple, so you can understand why some landlords are tempted to do it themselves – however, the complexities are soon revealed if something goes wrong!
Here are a few questions you can call on when discussing the issue with landlords who are contemplating going down the DIY route:
1. Could you bring yourself to evict a family, or a person who has fallen on hard times?
2. How would you go standing up in a tribunal and arguing a case?
3. Do you feel comfortable with the tenant having your phone number and being on call 24 hours a day?
4. Are you informed about tenancy legislation?
5. How will you manage the tenancy if you go overseas or on holiday?
6. Are you available to supervise tradespeople, at short notice, if required?
7. How will you find out if tenants have previously been evicted or have a poor rental history?
8. How will you verify that tenants are who they claim to be?
9. Are you organised and assertive enough to chase up late rent immediately?
10. Do you know the warning signs for a clandestine drug laboratory or marijuana grow house?
11. How good are you at record-keeping?
12. Will your landlord insurer cover you if you self-manage – and, if so, will the premium rise as a result?
13. How much will you save, after tax, by managing your property yourself?
14. Once the potential stress is taken into account, is your time worth more, or better spent, on other priorities?
Sharon Fox-Slater is the Managing Director of EBM RentCover, which protects more than 150,000 rental properties across Australia. She commenced a role with EBM back in 1993 and was part of the core team that helped launch one of Australia’s first landlord insurance policies into the market. She was also the first woman in Australia to complete the Advanced Diploma in Insurance Broking, and is well equipped to educate property investors and property professionals about the value of aligning with a specialist landlord insurance provider.