Hi folks - title says it all. Was wondering if there is an advantage in the eyes of the bank if your investment property is managed by a real estate agent. I have been asked in the past when applying for a loan, so I assume the rental income is treated differently if it is self managed? Thank you in advance for any replies.
serviceability different for rent from a managed property rather than private rental?
- Thread starter onthebus
- Start date
The assessment policy on the income is the same. The difference is in proving how much you're earning because the banks can't rely on a regular rental statement. Instead they'll accept a copy of the lease agreement, or a minimum of 3 months of direct and easily identifiable rental deposits into your account.
They'll still only take 80% of the actual income (or whatever their policy is). They don't recognize the fact that you're not paying a property manager.
It could actually be argued that the cost of self managing is actually higher. You'll spend more time managing a property or two than a property manager would. Self managed properties are more likely to have bad tenants. The cost may be cheaper for many people who do it well, but a lot of people aren't very good at being landlords.
They'll still only take 80% of the actual income (or whatever their policy is). They don't recognize the fact that you're not paying a property manager.
It could actually be argued that the cost of self managing is actually higher. You'll spend more time managing a property or two than a property manager would. Self managed properties are more likely to have bad tenants. The cost may be cheaper for many people who do it well, but a lot of people aren't very good at being landlords.
No difference between self managed/professionally managed. The same income verification is completed, which for the most part a lease agreement is sufficient.
A side note, you'll find a lot of landlord insurance policies differentiate between self managed and professionally managed properties - generally with a higher premium for self managed, or possible policy exclusions/exceptions. Always good to read what your policy covers.
A side note, you'll find a lot of landlord insurance policies differentiate between self managed and professionally managed properties - generally with a higher premium for self managed, or possible policy exclusions/exceptions. Always good to read what your policy covers.
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