When you rent out your property, there are a lot of different expenses, fees, and costs to consider. There are maintenance, property management fees, leasing fees, and others. Many people see the management fees as a great way to recoup some of those costs, however, it can often lead to increased costs in the long run. With that said, here are 5 reasons to not rent your property privately.
The need to find good quality investment property managers Neutral Bay or your local area offers has never been higher than it is now. And that is despite the wealth of information, and advertising at your fingertips via the internet. There are more than 5 reasons to use a property manager, but here are the top 5.
1. In a tougher rental market, agents have access to a wider pool of tenants
Of all the costs to a landlord, the opportunity cost of having long periods of vacancy is undoubtedly the most costly. Whilst some costs on a property are more tangible and quantifiable in the form of invoices, vacancy is an open-ended, harder to quantify cost.
For example, a roof repair might set you back $2,000. But, if your property usually rents for $500 per week, then just 4 weeks of vacancy will match that cost.
With this in mind, often self-managed landlords do not advertise on the main real estate sites, or sometimes they don’t do the most up to date, and honest research on current market prices. There are also a larger number of tenants who have put off a private listing – with all of this combining to increase a private landlord’s likely vacancy period.
- They act as your proxy in times of stress
Sometimes managing property can be plain sailing and easy. If you are lucky enough to have a good tenant, and either no maintenance needs for a while or the tenant is happy to take care of it, then you can pretty much put your feet up and relax.
However, maintenance and arrears often act as a lightning rod for bad blood in management and when not handled correctly, can lead to all manner of disputes and even tribunal applications being lodged. This is amplified by tenants, who get highly emotional, and landlords, who are often either emotional themselves, or perhaps thinking in financial terms.
It can be largely beneficial to have a property manager as a stand-in between to shield you from the emotions that can be flung your way by the tenants – and to give you strong advice on the best steps you can take to protect yourself and your investment.
There are no two ways about this – leasing and managing an investment property is a time-consuming task. We know about financial costs, but what about time costs?
Trying to find a tenant, and screening their applications is in itself almost a full-time job in terms of time, let alone dealing with maintenance and repairs once the tenant has moved in. This time is valuable – time that could be spent with your family or on your own job/ business.
This also equates to another opportunity cost – especially if it takes you out of your business. How much could you make if you had those extra three days per week?
- Battle-hardened, experienced property managers find you a better quality of tenant
Sometimes when you are a self-managed landlord, you can find tenants taking advantage of you – or not being completely honest in situations (even as early as the application process, or with maintenance – or even as late as the vacate dates).
It’s true, sometimes experienced property managers just have an intuition about certain situations. It comes partially from having seen it and done it all before, and partly from already having a predisposition to these things.
Sometimes they can easily call out a tenant for their deceptions, or truly understand your needs as a landlord. Either way, the result is that they are more likely to be able to get you a better tenant, and through interactions help train that tenant not to try to take advantage or do the wrong thing.
- All property management fees are tax-deductible anyway!
Last, but certainly not least, with fees being tax-deductible (make sure to check with your accountant), that means that using the best rental agency Sydney has to offer doesn’t have to put you out of pocket!
So, I hope this helps you in your decision of whether to rent privately or not. There may be other reasons of course for why you would want to do it but remember: the cheapest option in the short term often ends up being the most expensive option in the long run.
About the author
Charlotte Peterswald is a vastly experienced real estate agent and property manager, with successful offices in both Hobart, Tasmania, and Sydney, New South Wales. Charlotte has also experienced life in France, after living there for many years. Valuing customer service over all else and part of that is to share the wisdom and knowledge she has acquired over 30 years in the industry so that everybody can make better decisions in their real estate needs.