Tips on Managing your Investment Property
The question of whether or not you should manage your own investment property is largely one of time and enthusiasm. It can take a lot of dedication and constant updating of knowledge to ensure your property is managed correctly.
Property management requires someone to:
- Find, screen and choose tenants
- Understand all tenancy laws and keep up-to-date as new laws and amendments are introduced
- Maintain the property and organise repairs where necessary
- Find suitable daytime and after hours tradespeople – eg. plumber, electrician
- Handle tenants’ complaints in an objective manner
- Conduct regular property inspections and complete condition reports on entry, exit and at inspections
- Handle all monetary transactions including rent payments and receipt and lodgement of rental bonds
- Be able to deal with problematic and malicious tenants, and those who pay late or refuse to pay
- Review and renegotiate rent costs
- Produce rental statements for tenants detailing rent paid
If you don’t have the time and energy to do this yourself, a property management service will handle the process for you for a fee of around 5 to 8 per cent of gross rental collected. The actual fee you pay can depend on a number of factors including your location and how many properties are being managed on your behalf.
Property management fees are split into two main categories: management fees and letting fees. Management fees generally cover things like regular maintenance, routine checks and mailing of statements to tenants. Letting fees cover the costs of finding tenants for your property, including advertising and conducting prospective tenants through your property
Some property management companies charge additional fees for conducting inspections, completing reports, mailing statements, placing advertisements etc. This usually happens when either the management or letting fee percentage is a bit lower.
Expenses a property manager may organise to pay on your behalf:
- Council rates
- Water rates
- Body corporate fees
- Insurance cover
In order to find a good property management company, you need to add up the total cost of all fees for a year, as well as looking into the experience and knowledge of the company.
For more information on investment property management
For more information on investment finance strategies or the loan that is in your best interest, talk to your local Loan Market mortgage broker by calling us at any time on 0508 722 205 (+64 9 526 0122) or complete the below form.