Tips for first time self-managing property

Hello all

I'm thinking of managing my investment property myself as the tenant is a very good and reliable mature woman. But I've never done it before and have been told I need to get all sorts of papers and contracts and safeguards (both for tenant and landlord) signed. Can anyone advise me how to go about managing my property myself?
I will engage a property management firm to do regular inspections and necessary reports and pay them their one-off fee, but I see no point in paying hundreds of dollars off my rental income to take care of a tenant who is very reliable.
Thank you.
 
Hello all

I'm thinking of managing my investment property myself as the tenant is a very good and reliable mature woman. But I've never done it before and have been told I need to get all sorts of papers and contracts and safeguards (both for tenant and landlord) signed. Can anyone advise me how to go about managing my property myself?
I will engage a property management firm to do regular inspections and necessary reports and pay them their one-off fee, but I see no point in paying hundreds of dollars off my rental income to take care of a tenant who is very reliable.
Thank you.

I didn't realise there were companies that carried out regular inspections on fee per inspection basis?

If you decide to self manage - why not go the whole hog, inspections and all? Let's face it - you'll be the first point of contact when something goes wrong and is in need of repair. You'll also be the person making the call if the rent falls behind. Given you'll be taking on these responsbilities - a routine inspection should be a walk in the park.

In terms of paper work - I assume a lease is already in place? The only paperwork at present should be a letter to your PM informing them that you'll be ending the agreement.

Cheers

Jamie
 
Be your own property manager

I was my own property manager for years. You're in Canberra, I guess they have different laws. The NSW Department of Fair Trading has an excellent website with heaps of advice for landlords. You can always consult an agent or property manager for help if you run into trouble. Some of them are useless. Some are wonderful.

I must say the day I gave my properties to an agent was the day my life got so much easier. Their great advantage is that they have access to data bases noting good and bad tenants. And they are not involved. I still do manage a few tenants I have let to and don't cause problems but, at the end of the day, dealing with tenants can make your life miserable because of the personal involvement. I have had tenants screaming at me, both at work and at home, slicing the top of my convertible open (twice) because goodness me I evicted them they didn't pay the rent (the lessee moved out, his son moved in with 6 others and a dog to a 2 br apartment and no rent was paid for 4 months - I am not an uncaring landlord but some things you just can't tolerate). Saving the management fee is good but, it is tax deductible and it is good to distance yourself. I still keep a close eye on my property manager and I think I would do any tribunal hearing that came up, or at least go with her to make sure she did a good job, but, when you've got a full time job, OMG I love my property manager for the hassle she saves me. It's all about balance.

If you want to do an inspection, just schedule it and go around with your handyman/builder/partner/friend. Depends what you're worried about.
 
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Read the rules.
If you carry out the inspections yourself, you know it is (should be) done correctly.
It isn't rocket science.
Just follow the rules, and never never listen to a sob story.
and as a general rule
..If the tenants lips are moving...they are lying.
 
As others have said, no point self managing and not doing inspections.

reliability of tenants hasbeen the only thing stopping me from self managing more. Maybe have an advance thought about what you'll do if/when this tenant moves out.
 
If you have the time, and the capacity and knowledge to deal with problems when (not if, but when) they arise, then definitely go for it.

You are not in my area, so I'm not saying this to try and secure your business - but even the best tenants can go wrong, especially when it's time to move out of the property and there is a dispute about cleaning / notice period / damage / rent paid to date.

The reason most people engage and retain a PM is to provide the buffer between tenant and landlord - it makes it difficult to enforce any requests if you are dealing directly with the tenant.

There's a good reason people recommend against mixing business with friendship - it doesn't work (not saying you are friends with your tenant, but it's the same principal).

If you are adamant on self managing, it is extremely important to note that you are expected (and mandated) to know the legislation as it applies to your tenant and rental property. Ignorance is not a defence if you do something wrong, and the magistrate (here in Canberra anyway), throws the book at private landlords who do not follow / understand the rules.

Best of luck!
 
Erik,

You have mentioned some risks. I am wondering if you have any up-to-date risk assessment that you apply. It would be a solid basis for communication between owner and property manager, detailing such risk treatments as the (REA) principal taking a daily interest in the administration and solutions/decisions of the property managers in the office, relief and succession plans for the property managers. A comprehensive risk assessment would also cover such issues as insurance.

The 'other' side is very well protected by frequent, comprehensive risk assessment by the various groups and public agencies involved in advising (government) and administering tenancy regulations. Unfortunately though those risk assessments are based on the most vulnerable consumer requiring accommodation and allocate the governance requirements to landlords.

Maybe cover this in your thread or here as you wish.
 
We did exactly this since 4 years ago because we were not happy with the PM, and the tenants were (and still are) good. The same tenants (retired couple) have been living in the house since we bought it 8 years ago. We do only annual inspection ourselves and create report using format from previous PM. When we do inspection, we make it clear that our purpose is not to check on them (tenants), but to ensure that any repair needed to the house is attended to and that their smoke alarms are working. In the report we make note on which repair need to be done by us, and which one needs to be done by tenants. Before we finalise, we invite their contribution to the report (to clarify any issue). So tenants are happy to report, but they never indundate us with small things. They are an old couple, so sometime we offer to do We are lucky for this one.

In another IP we are not so lucky, bought 4 yrs ago and had PM managed it from the beginning. But after 2 bad tenancies in 18 months through PM, we decided to take over. Our tenants in this IP are not as easy to manage as the other IP. So we do inspection twice/year, using the same method. I approach this tenant (young in age and heart), differently from the others. I amm much more firmer, but still nice to her. I do need to remind her of her main responsibility as tenants (pay rent on time, and look after the place). But I always do mine too (repair and accommodate her needs to certain extend). It works ok so far, but it could be better.

By the way, I am in NSW, so I get most of my guidance from the Fair Trading website or office.

MKP


Hello all

I'm thinking of managing my investment property myself as the tenant is a very good and reliable mature woman. But I've never done it before and have been told I need to get all sorts of papers and contracts and safeguards (both for tenant and landlord) signed. Can anyone advise me how to go about managing my property myself?
I will engage a property management firm to do regular inspections and necessary reports and pay them their one-off fee, but I see no point in paying hundreds of dollars off my rental income to take care of a tenant who is very reliable.
Thank you.
 
" The 'other' side is very well protected by frequent, comprehensive risk assessment by the various groups and public agencies involved in advising (government) and administering tenancy regulations. Unfortunately though those risk assessments are based on the most vulnerable consumer requiring accommodation and allocate the governance requirements to landlords. "

??
Okay Fisherman I will leave others to sort this post out because as you note I am too ignorant. But Fisherman are you the same guy who won the S E Ql'd agents' regional hot air ballooning championship last year (no mean feat by the way) but who the judges disqualified because of your uncanny propensity to generate your own thermal updafts?
 
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JoP

I am not here to argue with you.

You could have asked first off or simply Googled to find out what risk assessment is. Either would have been better and more civil options than talking about me as though I was not there and I reckon, to cheer on some criticism of me.

You should not doubt that risk assessment is applied by government agencies to advise policy and controls and yes, they do concentrate on risk treatments to ensure that welfare housing is provided by the private sector and that such tenants are not disregarded or lose their shelter. Bluntly, someone has to provide shelter and where government is unwilling or unable to fulfill that need you can confidently expect that the private sector will be leaned on to do it. Fairness can invoke some very broad definitions however where potential loss of shelter is concerned.

This is why you get so many posts on this and other forums from owners concerned that (say) tribunals and rental regulations always seem to have tenants' needs in mind and forget the risks run investors in rental property and the desirability that they be able to operate their business at a fair (that word again) profit without having to sell the farm to do so. I am nor complaining, just stating the obvious.

However that is away from the simplicity of what I was asking, which is for property managers to consider using the tool of risk assessment and risk management to spell out and make obvious what risks they are offering to manage on behalf of the property owner and what risk management they have in place to ensure the service is delivered. That is an area where there is often some disagreement expressed, yet there is an available tool to assist. I did give a couple of examples of where risk management could apply.

It is reasonable to expect that property management become more professional and apply tools like risk assessment in advising and supporting owners. It can also clear the apparent confusion that can arise, again from comments on this forum, over who is paying their way.

I put this forward as a question and as a suggestion for possible improvement in service by property managers. I think it is possible to consider and debate it in a civil and constructive way.

It is also relevant to self management because anyone contemplating that would need to be well informed on the risks and treatments involved in self managing as opposed to having it done by an agent, as I think Erik was saying albeit in a different way. But what are the specifics of the comparison and what risks has the owner actually contracted out if at all?
 
Erik,

You have mentioned some risks. I am wondering if you have any up-to-date risk assessment that you apply. It would be a solid basis for communication between owner and property manager, detailing such risk treatments as the (REA) principal taking a daily interest in the administration and solutions/decisions of the property managers in the office, relief and succession plans for the property managers. A comprehensive risk assessment would also cover such issues as insurance.

The 'other' side is very well protected by frequent, comprehensive risk assessment by the various groups and public agencies involved in advising (government) and administering tenancy regulations. Unfortunately though those risk assessments are based on the most vulnerable consumer requiring accommodation and allocate the governance requirements to landlords.

Maybe cover this in your thread or here as you wish.

Hi there

I have not created a risk analysis for landlords who are thinking of managing property themselves - quite a time and labor intensive process, and it would not benefit my business.

I assume this is what you are asking?
 
JoP



This is why you get so many posts on this and other forums from owners concerned that (say) tribunals and rental regulations always seem to have tenants' needs in mind and forget the risks run investors in rental property and the desirability that they be able to operate their business at a fair (that word again) profit without having to sell the farm to do so. I am nor complaining, just stating the obvious.

The disparity between states ref: tribunal and regulations is absolutely ridiculous.

EG : in Canberra, once a fixed term lease expires, the tenancy automatically transfers into a periodic lease. The tenant is not obliged to sign a new lease, even if the owner wants one. They are entitled to stay on a periodic for as long as they want, and the owner does not have a say in the matter.

Whereas in NSW, a tenant is required to sign a new lease, or vacate the property at the end of the lease - which makes sense. A contractual lease for an upfront set period of time is signed - at the end of this lease, the owner should be entitled to the renewing of a further lease, not to be left in limbo with a periodic lease in place.
 
To the OP, do it. Make sure you read up on tenants handbook and legislation so you're prepared. I'd certainly be doing my own inspections as part of this though.
 
Looking at going down this path, due to complete lack of care of PM's around here. We have dealt with two different REA PM's. Both we have found completely lacking.

The list could go on a mile long, regarding things that the PM has done that I view is not appropriate. I'm thinking that it might be easier just to do it myself, so that when the tenant raises a maintenance issue it can be dealt with straight away. This way, I'm more likely to keep my property in a good condition.

I have a vested interest in the property and a whole lot more 'care factor' about the property in my opinion than a PM does. They deal with 400+ properties, and I'm sure mine is just another property in the pile.

So I'm trying to find my feet. I've got leases and applications drawn up. I know a REA who does fee for service for the National tenancy database checks. I'm booked in for a seminar on this topic via Consumer affairs. I've got a copy of the tenant booklet to hand out. I'm prepared to meet and greet potential renters, and show them through the property. I've printed off the condition report proforma. Advertised the property through gumtree, and will list in the newspaper.

Is there anything I've missed?
 
Ruff, you can get all the forms sent to you from consumer affairs, including leases, condition reports etc. Just fill out this form with what you need and fax or email it through and they'll send them all out.

http://www.consumer.vic.gov.au/library/forms/contact-us/renting-publications-and-forms-order.pdf

Only other thing is to make sure you have good LL insurance and maybe look at RACV Emergency Home Assist, I've just signed up my properties for it and given the tenants the RACV brochure and my membershio number for them to call if they have an emergency. Not really required if you have a good list of tradies already, but I like the idea of not getting hassled out of hours.
 
Learn the Residential Tenancies Act. It is your bible. If you make even one mistake in it VCAT will hang you like 55 day-old dry-aged meat in the butcher and you will lose. Period.
 
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