Property News

Property news of the week (28/3/10):
 Keith Howell
DIY property management is a good option for those wishing to invest in properties, yet who do not want to waste money hiring an outside company to do the majority of the work.
1. How much can I save in management fees?
Far too often, people choose to purchase properties for rent and then end up not making any money as they feel they need to rely on a separate company to handle their property management needs. Instead of losing out, taking a DIY approach towards managing your property will allow you to get the most financial gain out of your investment while making sure that the building is being taken care of in the exact way that you want. Property management fees range from 5% to 9% of gross rental income depending on the location of the property.
2. How much work is involved in DIY property management?
DIY property management requires a professional attitude. As you are not relying on established property managers and their years of experience, it is necessary to treat this like the job that it is. You will need to learn about maintenance, customer relations, renting practices, and, of course, the legalities involved. Generally, the workload will increase the older the property is and the more difficult the tenants are.
3. How do I get started?
Speaking with other landlords or property managers is a great start and will give you a good idea of what to expect when setting out on your own business venture. On-line property chat forums can also be of great help. However, do not let the amount of work involved deter or overwhelm you. After all, if you ever encounter something out of your scope of practice, it is always possible to enlist some temporary, outside help.
4. How can I minimise the amount of work involved?
A renovated property will require a lot less repairs than an older one. So, if at all possible, try to start out your DIY property management career with a renovated property. You will have a lot less hassles with broken air-cons, blocked toilets, peeling paint, leaking pipes and so on. Another way to reduce the amount of work involved is to choose your tenants extra carefully.
5. How do I find good tenants?
Advertise your property on a mainstream on-line site or through papers that have a wide circulation. Your goal should be to reach as many potential tenants as a possible to increase the competition for your property. Local or free ads where you only get a couple of inquiries at best will not allow you to choose the best tenant possible. Narrow down the potential candidates through extensive back-ground checks, including a tenancy database check.
6. Do I need to live close to my investment property?
Living close by naturally makes managing your property easier. You can drive by and check yourself what the problem might be or whether something needs to be repaired. If you’re a bit of a handyman, you can even carry out some of the repairs yourself. This does not mean that DIY property managing can’t be done with a property that is located in another city or even interstate. If you have a good relationship with trusted local tradespeople, and the property is relatively new, then that could be a perfectly feasible option.
7. How do I budget for repairs?
Taking a pro-active approach when it comes to your investment will reduce your overall repair expenses. Quite often, landlords or property managers wait until there is a problem in order to fix it. Performing routine maintenance checks and staying on top of tenant requests will save you a lot of time and money later on down the road. Letting things pile up not only runs the risk of allowing a small problem to snowball into a big one, but it also does not allow you to spread out repair and maintenance costs. The main thing to strive for is organization.
As long as you are proactive in repair and maintenance and keep to a set schedule, DIY property management is one of the best ways to get the most financial gain out of your investment. Although many people choose to go with professional property managers, it is important to keep in mind that most every task that you encounter is something that can be handled by you fairly easily.