It’s understandable as an investor that you want to find all the ways you can to maximise your investment. From tax breaks to offsets to depreciation, squeezing every dollar you can is a smart and beneficial idea. Some investors save money by managing their properties themselves. Putting it bluntly, I couldn’t think of a worse way to increase the cash that your property can deliver to you. Managing your properties, correctly and adequately, is a full-time job and comes with a ton of potential to decrease the money your investment delivers.
You’re Not a Lawyer
Most people who invest in property are not highly experienced with legal terminology or the intricate ins and outs of a contract, let alone a residential tenancy agreement. Property managers have a substantial amount of training to understand their obligations when entering into an agreement with a tenant. While there are courses available for you to participate in, they are not free and do require significant investment year-on-year to ensure that you know your rights and those of your tenants.
The Law Is on the Tenant’s Side
If you are lucky, you haven’t been through a situation where you have had tenants who have not kept their end of the bargain. I’m not talking about rent being paid a few days late or a broken tap, I’m talking about tenants who cause major damage to your property or refuse to pay rent for significant periods of time. When you are in this situation, there are significant amounts of paperwork and communications required if you are going to have any chance of evicting your tenant. Not to mention the formal process of going through your local tenancy tribunal. A good property manager will have systems in place to stay on top of these situations that you, as an individual, will not have. Each time you need to attend a hearing or follow up with a tenant is time taken away from your job or your life.
Do You Have the Time?
To manage your property to the level that a good property manager will do means taking time out of your normal commitments. You need to be available for urgent repairs, or at least to arrange them. You need to perform regular inspections of the property. You need to arrange payment of rent and follow up on any individual requests for property maintenance or improvements. On top of all of that, you then need to manage the paperwork that comes with communications with your tenants. You would need to find the time to fit all of that in around your normal life, which could be better off spent earning from your job or from the time you could be enjoying your retirement.
While there is an obvious attraction in managing your properties yourself and having greater control of your assets, the outlay for paying for expert outside help is significantly less than the alternative of taking on the stresses and responsibilities that come with being a DIY property manager.
KnowHow Now Bush Bite:
The arrival of ‘The Freedom Formula’ Book & The upcoming ‘Get Invested’ Podcast