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What’s up guys!
Hope we all had a great week, it’s NOVEMBER people!
Wow, 2019 is absolutely FLYING right?
How’s it coming along for you?
Sadly I haven’t quite achieved my two main goals yet… (sad face). But don’t worry, there’s a couple more months left, let’s hustle hustle!
Today’s post is a shorter edit of an article I wrote for an Australian Property Magazine named Your Investment Property. The magazine is about… um, investment… properties.
The article is based on some of the things to look out for with managing your own properties versus hiring someone to do it for you, hope you enjoy!
Earning passive income from property isn’t just a matter of buying a dwelling and sitting back while you pick up the rent payments each month.
A great deal of effort goes into managing a rental, which includes everything from maintenance to communicating with tenants to marketing the property.
This can be challenging, especially if you have a portfolio of multiple properties, which is why many choose to enlist the aid of property managers.
Some investors however are happy to accept the challenge.
But in the long term, which is the better choice?
When you want something done right, you do it yourself.
After all, it is your property, and no one cares about it as much as you do.
A property manager is also one more expense on top of the many costs you take on when owning an investment property.
Also, you’ll find that you get what you pay for with many property managers, so if you try to save in this area you could wind up with an inefficient manager… which brings you back to square one.
Managing your own property takes you through a wide spectrum of property investment processes. You learn to advertise rentals via the right media; screen tenants; negotiate terms and rates; and set inspection schedules.
Nurturing relationships with tenants as both the owner and property manager can also inspire greater respect and camaraderie between both parties, enabling you to hang on to good renters in the long term.
Along the way, you become a better communicator, improve your people skills, widen your network of industry contacts, and gain broader knowledge of the property market in general.
Not every investor is up to the task of managing property though, especially those with sizeable portfolios or investments across different states.
It’s a process that can be costly in terms of money, time and effort.
For some, the expenses involved in self-managing can far outweigh the benefits.
“Most property portfolios are six-, sometimes seven-figure investments. You’d want an experienced professional to manage it instead of leaving it to chance…
…Whether you own one property or multiple properties across multiple states, it makes sense to engage with professionals. I want someone who has the systems, processes and policies in place to deal with whatever arises.” (quote TheFrugalSamurai circa mid-2019).
While property managers do cost money, ultimately, the cost is not that significant when the time and effort required to do it yourself is taken into account.
“In my portfolio, I’ve worked it out to be around $20 per week per property, which, after tax deductions and comparing the number of hours involved if I was to do this DIY, makes it a no-brainer.”
The key to a good property manager–owner relationship is communication.
“If things are running smoothly, then you’d expect minimal contact with your property manager. But there are certain periods when strong communication is key…
…For instance, if your property is being advertised for lease, you should be receiving updates post every open viewing as well as weekly feedback as to how the lease campaign is progressing…
…With any maintenance issues that arise, you’d expect to be notified of any urgent issues immediately, with non-essential issues summarised in an email, preferably with quotes…
…The really good property managers will be an invaluable source of market information on setting the rent at lease renewals, knowing the types of properties tenants like and dislike, as well as rental market direction. You pay them, so use them!”
Ultimately, the choice between self-management and hiring a property manager comes down to the quality of the attention and effort you want to give your property.
If you are able to commit to the process of looking after a rental, DIY management can be the way to go.
If you want a more hassle-free investment experience that enables you to concentrate on acquisition, hiring a property manager could be the better call.
What’d you think guys? Did ya like it!
Oh, and as to my thoughts which one is better? Unless you haven’t determined from the article… check out this post I wrote on Property Management earlier.
Which option suits you? Let me know in the comments below!
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