self-managed v. professional management
Over the years I’ve stepped in to help so many self-managed ‘gone wrong’ properties. The comment that I receive over and over again is ‘but it’s always been fine in the past’ and ‘nothing’s gone wrong before’. This is the thing, most tenancies – if I had to take a guess maybe around 90% of tenancies, all run fairly smoothly. The thing is, 10% don’t. And the other thing is, those 10% of tenants can have a bad name somewhere so specifically try for private landlord properties because they know you don’t have access to a tenancy default database and you may not have the time or expertise to check their rental history.
For eg. I recently had a tenant put in an application for a property. First of all, I didn’t get a good vibe about the tenant – (ok so vibe is a wishy washy word, but it’s the 10 years experience renting to tenants!). We did the inspection – he didn’t take his shoes off, was trying to offer a higher rent and said ‘can I just take it right now if I pay the money straight away’…ALARM BELLS!
I explained the application process and asked the tenant to fill in the form. He had I.D that had different addresses to where he said he lived and he named a ‘private landlord’ and gave the person’s number as his reference. I called the reference and went through the normal checks – then I asked ‘do you own the property yourself?’. The reference replied ‘yes’. I decided to check on the ownership of the property through our database – he definitely didn’t own the property, QLD Housing did.
Another eg…I had a call from an owner-manager recently. She was beside herself because she rented her home to a ‘lovely young lady’ who had been quite a good tenant. But the ‘lovely young lady’ all of a sudden rented out the other two bedrooms to ‘big burly guys’ (didn’t tell the owner) and then took off – with the ‘big burly guys’ bond money. The owner didn’t take a bond from the first woman. The guys had not paid rent in two weeks and when she confronted them, they said, ‘we don’t have to pay rent – we’re not the tenants. We’ll move when we’re ready.’
We had another owner recently, who asked us to let the property for him as his tenant was moving out (he gave the tenant a notice to leave for objectionable behaviour). The owner lived in a house and the units were down the back. Once the tenant got the notice to leave, his behaviour went from objectionable to downright dangerous and the female owner needed to move out with her young child until the tenant was evicted. This caused much stress on the owners’ relationship.
Then there are times where the tenants are great, but things out of your control happen – like the hot water system blows up and you’re just too busy to get all the quotes, wait for contractors and issue the correct notices for people to enter. Or, the tenants were great…until you wanted to put the rent up by $10 per week.
I have countless more examples and can only offer you this advice, unless you have worked in Real Estate, honestly, it’s best to have your property managed by a professional. Just like it’s best not to diagnose your own sicknesses, best not to work on the engine of your car, it’s best not to manage your biggest investment without the right knowledge.
It really can end in disaster and usually hits you in the hip pocket!