Sometimes new investors make the decision to manage their own investment property.
After all, it seems obvious – why pay an agent to do something as simple as banking a rental cheque? It’s only when they start managing their own property on a day to day basis that they realise the level of expertise required to maximize income and minimize expenses. And when the Investor finally hands their property over to an agent, it’s an enormous relief. Their net income increases, they have a lot more leisure time and they can sleep at night.
Professional managing agents have the experience, expertise and up to date legal knowledge to prevent problems developing. Mistakes can be costly and many do-it-yourself investors find themselves in crisis management mode. They end up trying to lock the stable door after the horse has bolted.
Fortunately most people hand over to an agent before things go wrong. They realise that they’re reinventing the wheel and that it’s simply not cost-effective. Property investment managers need to be legal experts and self managed investor’s end up spending a lot of time familiarising themselves with tenancy legislation. Even then they worry that they haven’t thought of everything.
Investors can also have difficulty staying up-to-date with week-to-week fluctuations in the rental market. It takes a lot longer for trends to become apparent to people who are looking after just one or two properties. They do all that work and it may still cost them financially in higher vacancies. It’s also very hard to keep a distance from demanding tenants if you don’t have a third party to liaise with.
Another area people find difficult is communication and arbitration. A managing agent can be more objective and less emotional. Dialogue via a disinterested third party minimises income reducing anger, and personality conflicts.
Even negotiating rent is difficult for a landlord, both because of the emotional involvement and because of lack of experience. Things like knowing what rent to set and what are fair and reasonable repairs, can be difficult decisions for the inexperienced. The lease is the bottom line. If the lease is not done correctly, tenants could end up squatting or living in the property for free.
Utilising the services of a professional managing agent is an investor’s Slip Slop Slap….It saves them time, maximizes rental income and minimize risk.