While the majority of rental properties in Australia are handled by property managers, about 33% of owners across the country opt to do it themselves – and it’s perfectly legal.
Managing a property without an agent sees landlords dealing directly with tenants, vetting applications, getting paperwork sorted and managing issues day-to-day.
Bessie Hassan, a money expert at www.finder.com.au, said although DIY management can save landlords thousands of dollars in fees but it requires a lot of work and carries serious legal responsibilities.
The benefits of managing your own property
Ms Hassan said landlords had a lot to gain by managing their own properties, with the financial benefit being one of the biggest drivers.
“Commission costs for agents or property managers carry a hefty price tag,” she said.
“Agent fees are usually charged as a percentage of your weekly rental income and can be anywhere between 5% and 12%, depending on your state. If you self-manage your investment property, these funds can remain in your own pocket.”
Going DIY also gives landlords more control, Hassan added.
“You can screen and vet potential tenants yourself, rather than having an agent do it. Not only does this give you total control over who lives in your property, you’ll be able to establish a closer relationship with your tenants,” she said.
Being more involved also means owners can keep across any issues.
“You’ll be more involved with the day-to-day management of your tenants so if something goes wrong with the property, like a leaky pipe or broken toilet, you’ll be the first to know. You’ll also be the first port of call for any neighbours with complaints about your existing tenants,” Ms Hassan said.
Things to look out for
Although DIY management can save an owner a stack of cash, there are some things to look out for, Ms Hassan said.
“It’s important to have a deep understanding of the work involved with property management before deciding to do it yourself,” she said.
“Booking inspections, vetting applications, keeping up with general maintenance and repairs – managing a property is time-consuming. You’ll also need to be available to deal with issues out of hours and on weekends.”
Keeping across convoluted and ever-changing residential tenancy legislation – which differs between states – is also important, Ms Hassan advised.
“There can be serious penalties if you break the law as a landlord, regardless of whether it was intentional or not. It’s crucial you’re familiar with tenancy rights in your state. These can be fairly complex and tend to change frequently, so you’ll need to keep up-to-date,” she said.
Then there’s the emotional investment. “Being a private landlord means you’ll need to make some tough decisions,” Ms Hassan said.
“This includes managing disputes, proceeding with evictions and communicating rent increases. This can be highly stressful and end up impacting your personal life.”