Interesting reading

From: Dale Gatherum-Goss

I found this on of the legal updates that I am subscribed to and thought you might find it interesting. Cheers



Latest Business Management Headlines

Title: Managed properties get bigger rents
Date: 19 September 2002

Investors who managed their own rental properties received lower yields and exposed themselves to greater legal and financial risk, according to the Real Estate Institute of NSW.

Chris Fitzpatrick, President of the REINSW, said that while the majority of NSW property owners have trusted management of their investment to professionals, Australian Bureau of Statistics figures show that almost 200,000 of the 520,000 privately owned rental properties are not managed by real estate agents. People renting to friends or relatives would account for many of these properties, but many mistakenly believe they are financially better off managing the property themselves, Fitzpatrick said.

According to Data collected by the ABS for the 2001 census, investment properties managed by real estate agents attract higher rents than those managed by owners. The data shows that the majority of tenants living in properties managed by real estate agents pay between $200 and $300 a week in rent, compared to owner managed properties where the majority only pay between $100 and $200 a week.

Fitzpatrick said that those renting privately to friends or family may be doing so at a reduced rate, but many just do not have the market knowledge to get the best return on the investment. He said a property manager is essentially an asset manager whose primary concern should be to maximise the return on the asset and maintain its earning potential in a careful and ethical manner. This means ensuring the owner can get the greatest capital growth and highest rents while protecting the investment. Real estate agents have better experience and resources to select tenants who will treat the property with care and have the financial ability to pay their rent. An accredited property manager also has a good understanding of changing property legislation and the rights of owners and tenants, and will ensure all their dealing with the tenants are in line with this legislation.

Although engaging a professional to manage a property costs money, Fitzpatrick said they could claim tax deductions for many expenses associated with renting a property, including property agents' fees and commission. Agents also provide owners with a monthly, and in some cases annual, account of rent collected and any outgoing expenses. In most cases the money spent in agents' fees will be more than off-set by the savings this provides in accounting fees.
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Reply: 1
From: Alan Hill

Yes..... I read that in the Domain too Dale.......but then Chris Fitzpatrick would say that wouldn't he?

I've just about given up reading that Section of usually seems like a free advertisement for Real Estate Agents...... often not exactly 'objective' commentary........

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Reply: 1.1
From: J Parker

A lot of "infomercials" in that paper, I agree Alan :)
However, it is far EASIER to have a pm handle your affairs. It's a matter of weighing up time vs money and that old argument. Some ppl like to save money by doing it themselves whilst others cringe at the thought of doing an inspection and hand it all over to the agent.
As for actually saving you money, well that's really down to the individual. If they're not going to research the market properly to get maximum rent, then they only have themselves to blame. Renting to friends and family can only work if you're (usually) prepared to take a loss. It's something I would stay away from :)
Cheers, Jacque :)
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Reply: 2
From: Geoff Whitfield

I know I'm a soft touch. That's just me. I'd prefer to get the property manager to raise the rent, or to put the hard word on a bad tenant. I could not do that personally, and I'm happy to pay a PM to do it.

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Reply: 1.1.1
From: Alan Hill

Agreed Jacque.........the problem is actually finding a good PM!

I met an excellent PM the other day......

.....but Joanna, you've now sold the business and left a huge hole in the market I'm sure!

It was so refreshing to talk to a PM that would actually manage a property the way YOU would want it managed as the owner. Oh well, Allied Acquisitions gain is the Property Management Industries loss......

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Reply: 2.1
From: Felicity W.

My sentiments exactly Geoff! I'd fall for every sob story out there.
Keep smiling
Felicity :cool:
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Reply: 2.1.1
From: Joanna K

Thank you Alan!!!!

Who knows what the future holds - one day The Rental Specialists may offer its services again - but in the meantime, I'm more than happy to assist people with their property management queries.

Kind regards

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From: Sam Chow

Maybe the REINSW should ask themselves why so many people don't use these "ethical asset managers" to manage their properties?.
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