Whether you’ve just purchased your first investment property or you’re a seasoned investor with an impressive portfolio, choosing whether to handle the property management yourself is a huge decision that can significantly impact your return on investment. Property management fees vary a lot, but for some investors, these can stack up to be almost the same as mortgage repayments.
DIY management can also give the investor more control over their properties. It’s easy to see why some investors would be interested in managing their property themselves. However, with the vast majority of investors still choosing to engage professional property management companies, is doing DIY property management really worth it?
Let’s explore the two most important factors that need to be taken into consideration when determining if DIY is for you.
The desire to save money and cut down on costs is the main driver for investors to consider the DIY route. If the investor has previously engaged inexperienced property management companies, they might believe that the fees just aren’t worth it. However, when you engage respected and high-quality property management companies you can actually increase your net yield over time.
During their regular inspections, property managers will keep on-top of any small maintenance issues, before they turn into much bigger, expensive problems. Investors typically don’t have the time to conduct rental inspections as regularly, making it more difficult for them to stay on top of small maintenance issues.
We’ve also found that poor tenants will target DIY investors because of their limited ability to perform a thorough tenancy history check. Poor tenants can translate into a huge unforeseen expense if significant repairs and maintenance are needed to the property. In addition to this, any expenses that a DIY investor incurs, such as advertising costs, database checks and legal expenses are not tax-deductible, unlike property management fees.
This is something that DIY property managers or professional property managers can definitely agree on - managing a property takes up a considerable amount of your time. Property managers are responsible for:
- Sourcing and screening suitable tenants.
- Organising the advertising and marketing of the property.
- Regularly reviewing rent, including strategising on how to increase net yield.
- Routine inspections.
- Collecting rent, including chasing up tenants who may be in arrears.
- Collecting the bond, including lodging the bond with the relevant authority.
- Staying on top of maintenance and repairs.
- Dealing with the tenants, including handling any complaints and preparing the Property Conditions Report (PCR).
- Staying up-to-date with current tenancy laws and abiding by them.
- Potential court fees if disputes with tenants escalate.
If that seems like a lot of work, that’s because it is. Even experienced DIY property managers would buckle underneath this workload. It can be very difficult to manage one property alongside a regular full-time job and it requires a lot of sacrifices.
It can most definitely be done, but is it worth having to cut-down on quality time spent with family and friends on the weekend? Or forgoing sleep if you’re still trying to balance everything? Not only are you making yourself very time-poor, but you’re also adding on a mountain of stress to your daily life. Managing a property is a demanding job, hence why most investors tend to outsource this to professional and trusted property management companies.
Ultimately, the decision lies with the property investor. If they have the time, experience and knowledge needed to successfully manage a property, then DIY could definitely be the best option. However, the reality is that most investors aren’t well-versed enough in the area of property management, nor do they have the time to deal with the essential day-to-day tasks.
If you’re looking for a reputable and competitive property management company, then please don’t hesitate to reach out to our friendly team. With over 66 years of experience within the Perth property market, we are proud to have built a reputation as one of the most trusted and professional property management companies in the state. Contact us today to learn more about how we can help you maximise your investment.