How to be a DIY landlord?

[Pablo]

I've been managing my own properties and have had no major dramas. In SA the tenancies agency has a help line you can ring up for advice so I imagine NSW would as well. between the help line, their website, and somersoft you should be able to get the info you need.

You just need to get your hands on the correct forms and issue them with the correct timing and you should be fine legally.

The only thing that has p##sed me off in the past is when you arrange with the tenant to do a repair at a certain time and they're not there at that time, but if you issue the right to enter form with the correct amount of notice you can still enter.

As for finding a tenant try this company who allow you to advertise on realestate.com and do a search on the tenancy database.

http://www.landlordschoice.com.au/default.aspx


I have also posted an application form in the past on this thread. But you can also download them from many RE agents websites.

http://www.somersoft.com/forums/showthread.php?t=52955

Hope this helps.
Pablo

 

[geoffw]

They were some pretty weighty and costly questions for something so "trival".

I'm sure the professional PMs on this forum will be along any moment to assist you Slam.

I would agree with this.

Slam, by the questions you've asked, you need a lot more knowledge before DIY. Get somebody to manage it for 12 months so that you get some idea of what has to be done, and what some of the procedures are. You are asking too many elementary questions imho. Take that time top read the legislatgion and the forum. Make sure your PM knows that you have this 12 month provision. And then make the decision. Yo do have the right to do any maintenance yourself if you wish, as long as it is not something which a tradie must do by law. That can save you money.

 

[Pablo]

I Agree with Geoff in some ways, you shouldn't manage the properties yourself solely to save money, you should do it if you think you could do a better job than a PM.

 

[slam]

Thanks guys, I may get my friend to manage it if we can work out costs.

When I was young, I spoke and negotiated directly with PM's for my mums investment property as my mum didnt speak english. This was when i was 12-15 years old, I sort of remember what needs to be done. I was dispute stupid fees half the time like invoice costs sundrys etc.

I prefer to DIY now for my own property, as I have said I just need to be thorough with what the landlords rights are, need to be reasonable with the tenants. Most of all I need to find good tenants, the guy that inspected my property yesterday. When I went through his I knew this guy treated property like crap. So no Im not going to rent it to him. Doesnt matter if he says he has good references. But from what I saw the house he rented, the landlords didnt bother to replace or fix anything. He had lights that arent working.

I mean if it were me, I would fix the stuff myself personally. One advantage is that I live 1 street away. So I should be able to sort things out quickly. The other thing is, if the demands and repairs are reasonable then I will have them done. Things go pear shape when you dont fix what should be fixed and tenants dont pay rent. Otherwise it should be smooth sailing, unless the property is severely damaged. Then this is where the bond and insurance comes in.

Anyway, I appreciate the comments from you guys. But I don't think its that hard to manage a property. At the end of the day, it all comes down to money and time... Seriously its repairs, rent payments or people doing a runner. You can minimise this risk by thoroughly selecting the tenants you want in there. I can get help from my RE friend in this aspect or get him to shoot some people over that he recommends. They pay me rent, I issue them an invoice. It shouldnt be that hard if you respect the tenants and they pay rent on time and are reasonable. Treat people like lower class citizens then your really asking for trouble.

Cheers,

Slam

 

[The Fence]

That's it...!

Good luck slam...! I think you hve the right attitude....now just for some experience of your own...gotta start somewhere hey..! Well done...

 

[Burbs]

What trouble could he get into?

1. Too Close to the Tenant - being the person who deals with the tenant on everything, from application to rent to repairs, the self-manager may find it hard to be objective about issues - from requests for property upgrades, to rejection of rent increases, friends staying at the property 'for just a few weeks', 'surprise' pets that appear, holes in walls that 'were there when we first moved in', maintenance requests that are actually tenant damage, the list goes on. Which is related to point 2...
2. Tenant is Centre of Universe - when I was a self-manager, I thought the rental property business was all about tenants. It is not. Tenants come and go, mostly go, and they dont care about your property and will not help you out one bit ever if you got into trouble. But will ask for your assistance if they are. Owners are what rental properties are all about, then the properties themselves, then lastly tenants.
3. Tenant Selection - owner-managers simply do not have access to resources essential to tenant selection, such as databases and property ownership information (to verify references).
4. Arrears processes - legislation that appears simple can easily foul up if not followed to the letter; costing additional weeks of arrears.
5. Deadhead Magnet - deadhead tenants apply to rent from owner-managers, not agents. Frequent call to my office - "Hi, I am ringing about the place you have advertised for rent...oh, are you an agent? Yes.. Click (prospective deadhead tenant hangs up)".
6. Extra Time needed - for some reason, tenants call owner-managers late at night, on the weekend; making unreasonable requests that they expect to be immediately fulfilled. Having been in both shoes, they dont do this to agents, they wait until Monday for reasonable requests.
7. They Will Work out where you live - without a doubt, if you live nearby and owner-manage. And if things dont work out, you are risking the personal safety of yourself and your family. No joke.

Burbs

 

[The Fence]

Geeze burbs, you must have had a very bad experience at some stage....?

We've been self managing for 9 yrs now and the only time we had any of those problems is when one IP we had with an agent who ended up totally irresponsible and slack ...!!!

I think all your points are of the extreme case scenario whereas there are many more positive outcomes to be had as well....I think your "Tenants last" may be where you have run into probs...maybe...

Still, it's a bit like art...very subjective and dependant upon the individual.

 

[wylie]

I have to agree with Thorpey. I have been renting IPs for over 30 years and don't find these issues crop up at all. I never have tenants calling at night or weekends unless there is a plumbing blockup or similar.

I have to say that I do agree that "bad" tenants avoid using a PM, but plenty of prospective tenants avoid PMs because of the hoops they are made to jump through. We have found over the years that gut feeling sorts out who is desirable and who is not. We generally don't do any checks at all, certainly not to the extent that the PMs must do, and over all those years, have rarely picked a "bad" tenant.

I would say that going by the stories just here on SS, in the little segment of landlords who know about this site, that even tenants vetted, screened and approved by PMs seem to go bad way more often than our unscreened tenants.

I am not being smug, and I realise that we are able to be more fussy because we are managing only a couple of houses, whereas a PM is managing hundreds, but to think that PMs put "better" tenants in than private landlords is not the case, in my experience.

We make sure our entry condition reports are accurate so there is no chance of a hole "being there when we went in". Only once or twice has it become an issue that the tenant knows where we live. If we wanted to, we could take out a PO box, but we just don't have an issue with it.

Have you had a bad experience to give you these concerns? Have you self-managed? Now I am curious.

 

[evand]

Like everything, its horse for courses. Being a DIY landlord is not for everyone. If you don't think you are up to the task, get a PM.

But if you're the type that like do things yourself, have ago, Its very easy and most PM's are useless anyway.

We can come up with excuses all day long finding reasons not to do anything and everything.

I don't worry about these things, i just make sure it works out. I make it work out.

How people expect to be successful when they cant manage one property is beyond me.
It almost sounds like self sabotage before the journey to me.

In a general sense: Most people cant do anything before they actually do it. They just do it and it works out and they move on to the next thing, their comfort zone gets ever larger. That's the sign of success. You have to grow and you cant grow if you convince yourself (before hand) you cant do something for a million different reasons. If you limit yourself. And telling yourself you cant manage one house is severely limiting yourself IMO.

Burbs, it sounds like you are convincing yourself you cant do it. You are finding excuses (which rarely occur) why you cant instead of why you can. Slam, good luck which ever way you go mate.

 

[geoffw]

The possibility of bad tenants has been mentioned.

Something in particular to be aware of in this regard. A tenant who has been blacklisted on the TICA database cannot get a rental through a PM so can only rent privately. That means you have a higher chance of having dodgy tenants applying for you property.

 

[wylie]

Something in particular to be aware of in this regard. A tenant who has been blacklisted on the TICA database cannot get a rental through a PM so can only rent privately. That means you have a higher chance of having dodgy tenants applying for you property.

I agree with this and this is where the gut feeling comes in. Don't forget though that the reverse is also a problem. Say I have a "less than desirable" tenant and they leave my house and go through an agent for their next rental.

Because I cannot list on TICA (at least I don't think I can) the next PM also doesn't see they were bad tenants. So it can be a problem for PMs as well, I guess.

 

[The Fence]

Good to see Ev has toned down his chasting of the rest of us who desire to do things ourselves as per a previous thread....now I understand where he was coming from as he has just stated in this thread that it's the milestones you get over ...your comfort zone spreads out and then keep moving upwards and onwards....Ev has obviously done the self manage and since found a great PM, they are rare, and prefers to go on to bigger things...no probs with that...!

So slam, I have a gut feeling you are gonna go onto better things, just by the sheer confidence you show in yourself and prepared to back yourself and not look for those excuses Ev mentioned...good luck, keep us posted hey...!

 

[oh_noes]

Is their typical exit fee's for getting rid of a PM?

One of the reasons I'm taking it on myself (ignoring the fact that to do it in the first place only requires a 4 day coffee course) is because I believe it's so hard to find a decent PM.

Everyone I know, including a lot of people on here always complain about theirs.

I'm assuming they are complaining and not doing something about it because the exit fee would outweigh the benefit?

 

[Pablo]

It would all come down to what is written in the contract you signed with the PM, but I have never heard of an exit fee, usually you just have to give them the notice as stated in the contract (eg 30 days)

 

[geoffw]

Incompetence can be grounds to waive exit fees, though you may have to fight for it.

I've only ever had one incompetent PM out of five I've had experience with, vs two tenant evictions from about 30 sets of tenants. Getting rid of the PM was more trouble than getting rid of tenants. But it was a case of gross incompetence, and a letter to the principal of the agency cleared waiving the fees.

 

[Burbs]

Geeze burbs, you must have had a very bad experience at some stage....?

We've been self managing for 9 yrs now and the only time we had any of those problems is when one IP we had with an agent who ended up totally irresponsible and slack ...!!!

I think all your points are of the extreme case scenario whereas there are many more positive outcomes to be had as well....I think your "Tenants last" may be where you have run into probs...maybe...

Still, it's a bit like art...very subjective and dependant upon the individual.

A bad experience???

Experience is the issue here - I self managed for many years a large portfolio and now run a real estate agency specialising in property management.

Property management experience is a game of volume. If you are self managing, say with 1 or 2 IP's, and a tenant changeover every 6-12 months, YOU WILL NOT BUILD UP THE CRITICAL MASS OF EXPERIENCE. Many people in that situation will go along fine, and kid themselves that they are good property managers and know how to handle property management. Of course some are good owner managers, but the truth for many is that (like investing in a bull market and achieving good returns) they simply have not been confronted with the bad situations as they havent had the volume of people to deal with. Tenant experiences are to a large degree a numbers game. All of my points are from real-life experience as I have dealt with many hundreds of tenants, and multiple thousands of applicants (my application decline rate is currently 65%).

Around 1% of tenants will turn violent. You might too if you were being kicked out of a house you believed it was your right to occupy. I have received multiple death threats in the line of duty.
I very rarely have bad tenant situations from tenants I have placed myself. The scarey ones come when we take over a management from an owner-manager and have to commence the re-education process with the tenant. Around half can be saved, the balance get evicted.
Burbs

 

[evand]

Burbs,

Its good you declared your self interest in property management. It gives some context to your post(s).

Slam is talking about managing one house. He doesn't want to run a property management business or achieve 'critical mass'. LOL. Big difference.

Although, i'm sure critical mass has more to do with the economics of running a PM business than experiencing the critical mass.

Anyway, i cant think of anything easier than managing one house successfully.

 

[Piston Broke]

If someone want to have a go at self managing then great.
Slam seems smart enough to work it out.
It's all about getting in there and having a go!
Rolling up your sleeves and getting your hands dirty.
It's also a great way to learn about managing IPs if and when you do use a PM.

Personally I would never DIY manage again unless under duress.
But what I do manage is the PM.
sure, your gonna get the ex check out chick at the desk filing her nails while your talking to her, and then SMS her friends while your going through your requirements and tenant screening, but nobody said this stuff is going to be easy (unless you paid to hear them speak).
Most LLs will just let the PM do whatever and get away with it.
I don't. They are subcontractors ie I'm hiring them to do a job and they work for me. The agency owner is the one I consider my biz partner.
I tell them what I want done and how I want it done, and won't let them get away with "she'll be right".
If I want last say on the tenant approval, then that's how it will be, period.
And of course I tell them while looking straight into their eyes no emails or phone calls till after the first few meetings.
I still call in now & then and ask how things are going, prices, latest trends, what are tenants looking for, how are sales doing etc just to keep up what's happening out there in the market.
And yeah, I've requested (and it happened) the ex checkout chick be replaced more than once.