How many properties can you manage ?

[wylie]

Zero

My portfolio is supposed to set me free, not keep me as a slave to it.

Self-managing means checking if the rent is in your account when it is due. I don't have to mail myself a monthly statement, or even press a button to have it done by a computer.

We save literally thousands of dollars a year and it takes five minutes each fortnight per property. But... I grew up with it and am not scared of it.

 

[Jen_PFR]

We self-manage our own properties, of which we have seven (just acquired the 7th, in fact). Our properties are higher maintenance in some respects, in that they are completely self-contained. This means every time a tenant leaves (we do min leases of two months) I personally go in and take every single piece of linen out to wash and/or replace at home - sheets, doonas, the whole lot - and replace the entire lot with fresh (obviously). We also do any necessary cleaning (including things like pots and pans that aren't properly clean), maintenance, and gardening at that time (ie. between tenants).

Whenever we buy a property it invariably needs a reasonable amount of work - painting throughout, garden clean-up, replacement of all taps & spouts as well as light fixtures, and also flooring and window treatments - we do this all after work and on weekends. It's a tough few weeks but it's worth it. If we're lucky we can get time off work which helps - I've got four days of annual leave at the moment, to get a head start on the painting of our new place, plus organise quotes for window treatments etc.

We both work full time, and just manage the properties around it. Most of our initial enquiries come in via email, and the occasional phone call isn't a problem to deal with. We have a sparky and a plumber who we trust, so things like HWS replacements are also manageable.

Personally I find it relatively straightforward. Also, the average property manager in Perth is exactly that - average! I'd much rather manage the properties directly, then spend the same amount of time (or more!) trying to manage a property manager.

 

[HD_ACE]

Self-managing means checking if the rent is in your account when it is due. I don't have to mail myself a monthly statement, or even press a button to have it done by a computer.

We save literally thousands of dollars a year and it takes five minutes each fortnight per property. But... I grew up with it and am not scared of it.

Thats all very well, I also check that rent goes into my accounts ( from my pms )
but theres alot more to self managing than just checking accounts

for instance 10 properties =

- 40 inspections per year
- 1,2,3,4 open for inspections per property as they come vacant plus reference checks job checks etc for new tenants.
- answering phone calls and emails from tenants.
- any problem or repair I would want to go and check it out first and then have to orginise trades and any maintanence.
- then theres the rent arrears/ damage and court dates if it comes to this.

Its all very good if they are all in close range and have long term tenants that look after the place. But it all adds up and if properties are a few hours away you can soon find that your weekend has gone and passed with no time for play.

not for me my times more valuable. And its alot more than just spending 5 mins a fortnight checking your account.

cheers

 

[Ace in the Hole]

For those who self manage.
What about finding tenants?
When do you open for inspection?

Most importantly, how do you know you are getting above market rent which a good agent can achieve?

 

[wylie]

Its all very good if they are all in close range and have long term tenants that look after the place.

not for me my times more valuable. And its alot more than just spending 5 mins a fortnight checking your account.

This is pretty much the case. We don't do regular inspections unless we think there is a problem. Great tenants, hardly ever hear from them.

We generally used to rent after one open house, but lately we have been paying one week's rent for an agent to find a tenant. That started when Mum was in hospital and we have continued it.

Before that, we never checked anything. Gut instinct. On paper it probably sounds like a bad idea, but over 30 years with dozens of tenants and only one insurance claim, and maybe four bad tenants over all that time, it worked for us.

Believe me, if it was difficult (for me) I'd hand it over. For me, self managing is easy and the right thing, but I totally understand and respect we are all different with different ideas and priorities.

 

[morg]

I have a hard enough time managing the "Managers", let a lone the tenants.
Nil for me.

 

[wylie]

For those who self manage.
What about finding tenants?
When do you open for inspection?

Most importantly, how do you know you are getting above market rent which a good agent can achieve?

We used to open up on a Saturday for an hour. Generally found a tenant first open, depending on the market situation at the time.

Market rent is tricky, but when we have had appraisals by PMs we've usually got more than they said anyway. I do agree it is easy to slip behind, but keeping an eye on re.com and getting appraisals when vacant works.

I've also heard that some PM's don't always keep rent up to market, so it does depend on how good the PM is whether they keep the rent to market or not.

 

[The Fence]

If I could find a PM as good or better than me then I might consider using them, but right now, after 13 years of self managing, I'm quite happy, like it, and managing well.

Our opens are never more than 1hr on both days of a weekend. By Monday a new tenant is selected at market rates.
Market rate is what a tenant pays isn't it?

Also, we seem to ba able to hold onto tenants better than managers, with a manager we were being churned with new tenants on a yearly basis and manager would take at least a month to find new tenants

We offer at the current market rate, (what other properties coming on market are offering) and get it. In the end we get more than market rent than those who pay a manager. Every now and then when there is a renters market (its been a long while now) we can offer slightly below market rents but still net with more. You are not only saving on PM fees, but on anything you can do in maintenance yourself that otherwise is charged out to trades and PM whacks on their margin.

Like Wylie said, its nothing to be scared of once you are familiar with how little work there is and manage your time a bit better. Easy peasey.

Said it before, different strokes.

 

[wylie]

.... and manager would take at least a month to find new tenants

This reminded me of one of the major issues I have when a PM takes on the finding of a tenant. Our house is one of maybe 20 that agency might have empty at any one time. They don't have a reason to push our house (less of a reason actually, as they will not be getting the ongoing management of it).

When we have one house empty, we concentrate on what needs to be done to get a tenant ASAP. We have the photos and advert ready and open house the day the tenant is gone, not the next Saturday, which can lose a week. Agents just put my house in the "to do" basket with the other 20. I understand that and I'm not knocking the agents but when it is the "only" house I have to push, I'm on top of it early and don't have 73 other things to do that day, so I can focus on "my" property.

Until we got PMs to find tenants a few years ago, we used to try not to have a house empty for more than one week, rarely for two, once an agency comes on board, it is not unusual for it to be empty for three weeks or more. Quite often, we would have one tenant leave on Saturday, new tenant go in Sunday or Monday.

With an agent, if a tenant leaves on a Saturday, they tend to allow several days for inspection and time to remedy any problems. It can take a week from tenants leaving to the first open house, or available inspection time, and that is a week we lose.

We used to gently suggest that tenants take it earlier than might ideally suit them or risk losing it to another prospective tenant who can move quickly, or doesn't have to give two week's notice. We found that often tenants were happy to pay an overlapping week and move their household possessions during that overlap week. We never risked losing a good tenant by pushing this, but depending on the market, tenants often paid an overlap week rather than lose our house.

 

[chilliblue]

I prefer to keep an arms length from my tenants and the few $$$ it costs us is definately not worth the hassle.

 

[INVSTOR]

For those who self manage.
What about finding tenants?
When do you open for inspection?

Most importantly, how do you know you are getting above market rent which a good agent can achieve?

I've had a few appraisals given to me by PMs that I thought were under what I could achieve. I've advertised for more, got it, so have stuck to always setting my own figure. I've had appraisals performed by 5 different Perth PM companies in the past. I find I spend a lot less time self managing then using a manager. I wonder how many people who use managers check their work or just take their word. One PM I used had incorrect start lease date which made ou they were paid in advance when they weren't. Also, you miss out on rent while PMs do final inspections, so that's usually another $two/three hundred per year per property you lose also. More than anything though, I like personally choosing the best/easiest tenant for my property. It's a lot easier choosing/gauging yourself.

 

[HotRod]

I prefer to keep an arms length from my tenants and the few $$$ it costs us is definately not worth the hassle.

That's one of my main reasons.

Reason's I use a PM:
Keep tenants at arms length
PMs can deal with all the maintenance hassles (quotes, letting tradies in/out etc)
Advertising and then tenant vetting
They'll know the RTA better than me
Don't want to hop on a plan for two hours to sort something out and take a whole day of my time.
My time better spent looking for new deals and/or enjoying my time doing my stuff

But, for PIs wanting to save some dough, I can see the attraction (if you have say half a dozen properties renting at $400pw each) of saving about $15K a year. You just need to weigh up if that $15K is worth the time etc you might have to put into managing those IPs yourself.

My personal circumstances do not suit self managing.

 

[nhg]

Who do you insure with when you self manage?

Same insurance policies and those who don't self manage?

As above.

If I wasn't in a demanding role, I would use my time to self manage. Keeping in mind, agents seem like a rip-off when things are running smoothly. What about when you have to chase a tenant for tribunal. Then taking a day off work and stressing over a few dozen phone calls, suddenly makes things very expensive and time consuming.

Perhaps when I downgrade my hours in a few years time.

 

[wylie]

I've used various policies, and the only one I found didn't insure self-managers was Terri Sheer, but that has changed now.

 

[nhg]

ok well I'm in Perth so being generous you would be looking at a minimum of 10% per year of rental value for a property manager to look after the place.

Average in my neighbourhood is 7-8%+ fees.

I pay 5.5% and don't pay tribunal costs.

Have you tried negotiating?

 

[Chomp]

Average in my neighbourhood is 7-8%+ fees.

I pay 5.5% and don't pay tribunal costs.

Have you tried negotiating?

I only used a manager once. They had a property up for lease that I liked, so I said if you let me move into that one you can have mine to lease for a year. so I had limited negotiation power, I did it private after the first year.

 

[morg]

If I wasn't in a demanding role, I would use my time to self manage. Keeping in mind, agents seem like a rip-off when things are running smoothly. What about when you have to chase a tenant for tribunal. Then taking a day off work and stressing over a few dozen phone calls, suddenly makes things very expensive and time consuming.

That's what puts me off self managing.
When things go bad.
This is when the good PMs earn their keep.
I'm not good with people, so find it difficult being diplomatic with tennants when they owe me money or have damaged my property.

Quote:
Originally Posted by chilliblue
I prefer to keep an arms length from my tenants and the few $$$ it costs us is definately not worth the hassle.

I'm with you, chilliblue

 

[The Fence]

That's what puts me off self managing.
When things go bad.
This is when the good PMs earn their keep.
I'm not good with people, so find it difficult being diplomatic with tennants when they owe me money or have damaged my property

Just on that....how then do you manage when someone else, other than a "tenant" owes you money or has damaged your property(any property) ?

I'm seeing a pattern of reluctance from some LL's to carry on what is normal business interaction with their clients.

There are rules and regulations, it's not all scary as Dazz will have you believe.

However, I am not accusing anyone of being scared, just that it is not so scary when you have been thru it for sometime and had experience and break it down to simple rules to abide by and keeping onto the issues both your and tenants responsibilities.

 

[DaveM]

How many properties could I manage: Lots
How many properties do I want to manage: 0

 

[morg]

Just on that....how then do you manage when someone else, other than a "tenant" owes you money or has damaged your property(any property) ?

I'm a PAYG employee, so people owing money and such isn't an everyday occurrence.
When it does happen, I'm not obliged to tip toe around the RTA.

Having the tennants at arms length takes out some of the emotion and allows the PM to get on with whatever remedial action is required.
We all know how long winded these processes can be, and that's probably what frustrates me the most, particularly if I was dealing with the issues directly.

However, I do recognise that this is all part of being a resi landlord, and I do recognise my own shortcomings, so I am happy to outsource that task to someone who knows the law and the various processes better than myself.

It's not about being scared, more about choosing your battles.