18 Dec 14
For most property investors, the idea of managing their own properties is not something they entertain, but a few people occasionally look for a higher return on their investment by self-managing. They soon find out that there is much more to property management than collecting the rent, and often they find out the hard way. Tenants who cause wilful damage or who fall into arrears and leave without a forwarding address are just two of the difficulties of managing a rental property.
It is probably not surprising that most of the issues that cause problems for do-it-yourself managers are legal ones. There is a great deal of legislation in existence to protect both owners and tenants, and significant penalties if anything goes wrong and the laws are found to have been broken.
Do-it-yourself managers frequently accept tenants without having any written agreements in place before occupancy. Two absolute essentials are a condition report and a legally valid tenancy agreement. The condition report, as the name suggests, validates the condition of the property before the tenant moves in. Any previous damage or wear-and-tear is identified and any repairs required before occupancy are documented in the report.
The tenancy agreement sets out the terms of the lease, the rental amount, special conditions such as permission to keep pets and it must be signed by both parties to be legally enforceable. The tenant is also required to pay a bond equal to several weeks’ rent that must be lodged with the appropriate authority. Do-it-yourself managers who are not aware of this legal requirement risk being fined if they keep the bond in their own account.
At All Residential Real Estate our staff members are fully conversant with the legislation applicable to the properties we manage. We also have comprehensive systems and processes in place to protect the rights of both our owners and tenants. Our innovative technology makes it easy for good tenants to find our rental properties and, as a result, we maximise the returns for our owners. Without these types of systems and technologies it is difficult for a do-it-yourself property manager to be certain that they have attracted reliable tenants.
Another issue is that self-managers often encroach on the rights of tenants to live in the property without being under constant scrutiny. While regular inspections are required to make sure the property is being looked after, these must be arranged in advance with the tenants, and are usually within a set timeframe. Notice must also be given if trade work needs to be done at the property.
Our property managers at All Residential Real Estate are fully conversant with all these requirements, and when our owners entrust their properties to our management, they can be assured that every legal requirement is met. For the small amount of savings gained, it is hardly worth the worry and effort to self-manage when so much could go wrong.