“The simple truth is that no one cares as much about your investment property as you do.”
That’s the opinion of Diane Bukowski, Managing Director of Brisbane-based company Eezirent. Her company provides access to the tools traditionally available only to real estate agents, levelling the playing field for self-managing landlords.
“Just as there are a growing number of Australians who are taking direct control of their superannuation, many residential property investors are taking control and saving money by self-managing their rental. Eezirent can help you achieve this.”
Australian Bureau of Statistics figures show that nearly a third of all dwellings are rented, of which just over half are management by real estate agents. After public housing and charity run properties are removed, the data shows that approximately 30 per cent of rental properties are privately managed. This equates to about 680 000 dwellings. That is a sizeable group of people who see value in self-management.
But can you do it yourself? Diane Bukowski advises that if you are considering self-management, think about these questions first.
Is it physically possible?
Though not essential, self-management is most efficient when you live in the same city as the rental. Not only are inspections a lot more convenient, physical proximity allows for the occasional drive by to be sure things are in order. Having said that, a compromise would be to engage a local real estate agent on a ‘let only’ basis. This means they find the tenant and do the sign up then you take over the ongoing management. Remember to that travel expenses incurred to monitor your investment can be a tax deduction.
Can I access the resources I need to do the job?
The short answer is yes – and many of them are free. Queensland’s Residential Tenancy Authority (RTA) is probably the best in the country, according to Diane. “For a long time the RTA has provided all the legal documents free of charge. They now also offer online bond submission and refunds. And they are very user friendly.”
There are some key resources that are not so easy for self-managing landlords to access namely, effective internet advertising and tenancy database checks. Many of these will only deal with licenced real estate agents. Eezirent provides a solution to this as they link self-managing landlords to the two major sites in the country realestate.com.au and domain.com They can also facilitate a tenancy database check using the same tenancy black lists used by real estate agents.
Do I want to dedicate the time?
A very experienced property manager in her own right, Diane knows exactly the time required to manage a property. “You’d be surprised how little time it takes – as long as you are organised. The biggest drain on your time will be when you are searching for a tenant and have to conduct inspections. You don’t have to drop everything when a tenant calls requesting an inspection. Holding set open homes will help considerably – say two, thirty minute sessions per week. Once you’ve got the tenant in place, the demands on your time reduce considerably.”
Will I save money?
You will save the costs of the letting fee, the management fee, administration charges as well as any other add-ons a real estate agency will try to impose. You will also save GST costs. Letting fees are typically the equivalent of one week’s rent. Though an increasing number of offices are charging two, and Eezirent has reports of some Western Australian agents charging three weeks. You can expect management fees to be between 7% and 10% of your weekly rent. Administration fees are usually between $3 and $5 per month. Typical add-ons are things such as charging to do routine inspections, a fee to give you an end of financial year statement and a lease renewal fee.
You can easily do the maths to calculate the savings on self-management. Eezirent claim you can save around 80 per cent by using their services to help you self-manage.
Diane points out that being a self-managing landlord is really a business proposition. “If you’ve ever wanted to run your own business, self-managing a rental property is a good start. You need an objective, business minded approach, efficient record management processes, marketing and communication skills. Your tenants are your customers, the property is your stock and the rent is the price.
So give some consideration to self-management. If it turns out that it’s not your cup of tea, you can always engage a property manager down the track. It’s certainly worth a try.
For more information, visit www.eezirent.com.au.
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