In Australia, an estimated 80% of owners of investment properties use a professional property manager to handle work like collecting rent and scheduling repairs on their behalf. Written agreements should outline the specific services that will be offered.
It takes time to manage a property, therefore if you don't live close to your investment home, hiring a property manager will almost probably be better. Both people who own multiple investment properties and those who don't care to put much effort into it can benefit from using one.
In the end, you have to decide whether the time you save by outsourcing property management activities will genuinely save you money and provide you more time for a more lucrative or fulfilling job. It will almost probably save you from future issues because disputes with tenants or contractors may occur.
Make sure you are aware of all the services a property manager may offer; they need to be significantly more comprehensive than just collecting rent.
State and territorial laws regulate residential property managers. Real estate agents, who then offer property management services, are licensed by a body that is in charge of each state. A good example is NSW Fair Trading in New South Wales.
A property management agreement is a legal contract between the owner of the property and the person or business chosen to look after it. It will outline the precise responsibilities of the property management, the fees assessed, and other standard contract terms, like how long the agreement will last.
The facilities that follow can be offered by a property manager:
Asking the previous owner for a recommendation is easy if you purchased an established rather than a newly constructed property. However, you are under no duty to keep using them.
Read online feedback and ask for suggestions from locals. Professionals in property management need to be skilled communicators, so ask prospective property managers if they'd be ready to sit down and go over all the services they offer as well as how they handle challenging situations like a noisy renter.
What is supplied in exchange for their fees should be made clear by a good property manager. Again, it ought to be more than just a monthly rent collection.
For property management services, real estate agents charge a variety of fees, but as a general rule, plan to pay a commission that ranges from 7% to 10% of the weekly rent + GST. According to sources, prices range from 4% on the lower end to 15% in other areas, depending on the locality.
What these covers must be specified in writing because some agencies offer greater value than others and some charge extra for everything including rent collection.
Real estate agents' costs could decrease as a result of the growing number of property management apps that can simplify communications and eliminate the need for emails and phone conversations. Among the apps are Managed App, Property Me, and Landlordy.
In Australia, property management options include using a real estate agent and the property manager or working independently as the owner of the investment property.
The above guide focuses on residential property management. Commercial and industrial property management are another type.