The Benefits of Property Management
Free up your time to do more of what you enjoy …
If you own an investment property and rent it to tenants, you can run this business yourself or hire a property manager to do it. And that’s how you should regard this situation, it’s running a business.
In Western Australia, around 60 per cent of investment properties are professionally managed by a real estate agency and the remaining 40 per cent are self-managed by private owners. The evidence suggests however, that the percentage of properties under professional management is growing.If you work part-time or are retired, have some basic legal competencies and understand the complexities of the recently updated Residential Tenancies Act, then managing your own property may work for you. The problem is that many private owners don’t understand their legal obligations under the RTA and some get into difficulties as a result. Most owners underestimate the amount of time that goes into managing a property, or just how difficult, expensive and unpleasant things can become if a dispute arises. For example, if the tenants default on the rent, vacate without notice or require eviction.
This is where a property manager can be invaluable. From the start, a good property manager can arrange the public viewing of the property and then thoroughly check all applications and references from prospective tenants. This includes scanning the National Tenancy Database to see if any applicants have a poor history with previous rentals.Once suitable tenants are short-listed by the property manager and then chosen by you as the owner, the property manager can arrange all the lease documentation, take care of the rent collection, bond lodgement, occasional maintenance, quarterly home inspections and utility expenses, such as water and council rates.
Property managers are also skilled at understanding the market rate for the property and setting the weekly rent accordingly. Many private owners tend to misjudge this or feel uncomfortable about reviewing the rent with renewed leases for existing tenants even though this can be unwise over the long term.The most important role of the property manager is to act as the link between the owner and the tenant in a professional way, so that the owner is not exposed to any situations that might be uncomfortable, while at the same time ensuring that the tenant can also raise issues without having to confront the owner directly.If a situation arises that requires going to court, as sometimes happens, property managers are familiar with the legal process and can represent you at the hearing.
Property managers charge a percentage of the weekly rent as their fee, but this is fully tax deductable as part of your business expenses each financial year.