Top 7 Reasons You Need a Property Manager
Many landlords seem to believe that managing an investment property should be easy. They assume that all they need to do is sit back and collect the rent while their tenants take perfect care of the property.
In reality, trying to self-manage an investment property is not just time consuming and demanding. It can also be fraught with danger if you’re not aware of some of the legalities surrounding property management.
With those thoughts in mind, here are some of the top reasons you need a property manager to take care of your investment property for you.
Finding the right tenant
Renting out your investment property isn’t just about getting any old tenants to move in. It’s important to find the right tenants who will honour their responsibilities in terms of paying rent on time and maintaining the home.
A good property manager understands the right way to conduct thorough background checks to sort the wheat from the chaff. Your property manager will also run security and criminal background checks, run a credit report on the prospective tenant, verify employment or income sources and confirm previous landlord references.
Fair market rent
Many landlords grossly over-estimate how much they think they can charge for their rental properties. There are also plenty of self-managing landlords who fail to raise the rent regularly, which puts them at risk of receiving less rental income than they should be getting for the property. A property management company will take control of the rent being charged for the property and ensure you’re receiving a fair market rental income for your investment.
Rental collection accountability
If you have an investment mortgage on your rental property, you’ll know how important it can be to ensure the rent arrives on time, especially if that rental income contributes towards covering the repayments.
Most property managers insist that tenants make rent payments via direct debit or through CentrePay if the tenant is in receipt of Centrelink benefits. If the rent is late for any reason, it’s the property manager’s job to chase up those payments and collect any arrears due.
Your property manager is paid to stay on top of all the legal obligations associated with your rental property. Signing a residential tenancy agreement might seem relatively straightforward on the surface, but it is still a legal contract that needs to be lodged with the correct authorities.
There is also the issue of keeping up with constantly changing landlord-tenant laws and regulations, as well as housing compliance regulations. Your property manager will help you avoid potential lawsuits and keep your property up to date and in compliance with state regulations.
A property manager will also act on your behalf in a tenancy tribunal if there is a dispute between you and your tenant that needs to be resolved in the tribunal setting.
A professional property manager should conduct regular property inspections to ensure your asset is properly maintained. If anything does need to be repaired or replaced, your property manager will take action to ensure everything is properly maintained.
Termination of contract and eviction
Many landlords attempting to self-manage properties tend to struggle with terminating a rental contract. It’s also not an easy task to evict bad tenants who refuse to pay the rent or who treat the property badly.
By comparison, a professional property manager will ensure a contract is properly terminated with the correct notice to the tenant in advance. In the event that a tenant needs to be evicted, your property manager will also know the best way to handle this too.
Yes, engaging the services of a property manager costs money, which causes some landlords to believe that they’re saving money by doing it themselves. Yet your management charges are tax deductible, which can provide some tax benefits for many landlords.
Owning a rental property can be a great investment. Engaging the services of a good property manager not only saves time and protects your investment, it also helps to maximise the profitability of your rental property.
This article provides general information which is current as at the time of production. The information contained in this communication does not constitute advice and should not be relied upon as such as it does not take into account your personal circumstances or needs. Professional advice should be sought prior to any action being taken in reliance on any of the information.