One of the most important decisions landlords make is whether to manage their rental property themselves or enlist the services of a professional property manager.
While DIY property management may sound easy enough, it can actually be quite complex and there are numerous potential traps.
Since January, Eastside has taken over a record number of privately managed properties. The main reasons for switching to a managing agent? Uncompensated damage to property, out-of-control rent arrears and lack of time to keep up with maintenance and emergency repairs.
Another major issue facing landlords is legal implications, as risk management is now an important part of property management. If a landlord is going to do it themselves, they need to have a thorough understanding of the tenancy legislation and paperwork required.
There are also many day-to-day problems that can arise. Common issues that may need to be dealt with are tenants failing to mow the lawn and maintain the gardens, having pets without approval and getting behind in the rent.
As many landlords often develop personal connections with their tenants, they may feel uncomfortable chasing arrears. Property managers, on the other hand, are emotionally removed.
If you know a landlord considering managing their own rental property, it’s important to make them aware of the pitfalls. Here are five traps private landlords should avoid:
Failing to ask for a bond
This security deposit is held in case tenants don’t meet their obligations under the tenancy agreement, such as causing damage to the property or failing to pay the rent by the vacate date.
Not having a lease
A lease is a legally enforceable contract that usually spells out the length of the rental agreement, the amount of rent that will be paid and the condition the property must be returned in.
Not filling out a condition report
This document describes the standard of repair for the premises and any items included, such as furniture. It is designed to protect the interests of both parties.
Not understanding tenancy laws
Property management can be very complex and if landlords don’t comply with the legislation, they can face fines. Remind landlords that there are different tenancy acts in each state and territory.
Inspecting without correct notice
The tenancy laws in each state stipulate how often inspections can be done and how much notice must be given to tenants. Failing to issue correct notice can mean costly penalties.
Tell private landlords that one of the biggest advantages of enlisting a property manager to look after their rental home is peace of mind. Property managers take the hassle out of every step of the process, from finding a tenant to collecting the rent; attending maintenance issues to conducting routine inspections.
Although there is a cost involved in using an expert, landlords are paying for a professional service and the fee is tax deductible. A property manager can also advise a landlord on how to present the property to attract quality tenants and get the best rental return.