How Many Manage Your Rental Property on Your Own?

yjun355 on 12/10/2017 - 15:04

I was just curious how many people manage their rental property on their own?

I have brand new apartment and was thinking of renting it out and managing myself. I rented another property before through agent.

Some advice would be great. For starters, is there any forum or facebook group where people have discussion and advice.

I had couple of rookie question:

a. Can i still advertise on domain and realestate considering i am not going through real estate agent.
b. Tenants agreements documentation, bond, etc. I am assuming there must be a simple guide online somewhere to follow.

Home & Garden

Comments

  • Nugs on 12/10/2017 - 15:13
    +6

    I do - my tenant is my Mum

    • [Deactivated] on 12/10/2017 - 18:37

      Isn't that killing you tax wise?

      • Kenb0 on 12/10/2017 - 18:39
        +4

        As long as mum's getting charged market rental rates, should be no difference tax-wise

        • Euphemistic on 08/11/2017 - 12:55

          You'd get a better tax benefit if the rent was below market value, even if your mum made up the difference in other ways (dinner, washing etc). The higher the costs compared to the income creates a better tax situation.

        • Kenb0 on 09/11/2017 - 10:12

          @Euphemistic: You may think that is the case, but if you're charging a related party below market value rent for a property, then you can't claim 100% of the normal costs of the property. You're restricted to only charging the amount of rent you're receiving if yo're not renting it out for market value, which means you're actually worse off because you can't take advantage of the tax situation

          eg. market rent for a property is 250 a week. Costs of having the investment property is around 300 a week(ie. loan interest, rates, etc…). If you charge your mum 250 a week, you can expense the 300 a week as a tax deduction, creating a negative gearing scenario. If you charge your mum 100 a week, you can only tax deduct 100 a week….

          See http://law.ato.gov.au/atolaw/view.htm?docid=ITR/IT2167/nat/a…

          "Generally, a deduction can be claimed for rental property expenses up to the amount of rental income received from this type of non-commercial arrangement"

        • Euphemistic on 09/11/2017 - 12:39

          @Kenb0: Fair enough, but if it was close to market, but a bit below….

        • Kenb0 on 09/11/2017 - 14:23

          @Euphemistic: lets face it, anyone can claim anything they want as its a self-assessment system. This is where everyone says their mates are claiming this, claiming that, they get their tax refund and ATO hasn't said anything about it and assume that its a valid deduction. Of course not, ATO haven't taken a look at it yet and started questioning it.

          The problem is when ATO comes around asking and its time to justify the deduction.

  • pantsparty on 12/10/2017 - 15:39
    +1

    I will get the ball rolling. Tenancy agreement form: http://www.fairtrading.nsw.gov.au/pdfs/Tenants_and_home_owne…

    You can start off by advertising on Gumtree and any other free sites. You could use a service like this to help you make a nice listing on the paid sites: https://myproperty.com.au/

    • yjun355 on 12/10/2017 - 15:49

      Thanks. That cares of RealEstate.com.au. Its $189 for listing. Not sure how long it lasts.
      Do you know any sites for offer same service for Domain.com.au as well?

  • 777 on 12/10/2017 - 15:44
    +2

    I have been doing for more than 10 years myself, manage about 6-7 properties, no issues
    Very easy

    In Victoria we have consumer affairs

    Steps
    a) Advertise
    b) Ask interested tenants to fill application forms
    c) Rental Lease
    d) provide them rental guide
    e) RTBA bond online
    f) inspection report
    g) make sure you covered with insurance as you self-managing
    h) Ask them to transfer rent online -you may or may not provide receipt
    i) do every six months inspection

    I am sure NSW will have something along those lines
    All forms are provided by Consumer affairs in VIC

    • yjun355 on 12/10/2017 - 15:51

      Thanks a lot.

      In terms of rent online, you have preference with a bank. Eg. I know HSBC has email alerts. So, it is easy to know whenever there is transaction. You don't need to monitor.

    • Ninja9 on 12/10/2017 - 18:10

      What happens when they don't pay rent on time or miss a few times or stop paying and wouldn't leave?

      • smux on 13/10/2017 - 08:32

        Inb4: bikies

      • 777 on 13/10/2017 - 09:17

        Insurance, comes into the picture, just make sure you are covered. Nothing my Real estate companies can do

        • yjun355 on 14/10/2017 - 12:35

          There is landlord insurance that you can get.
          Also, i couldn't send you pm as ozbargain says an overseas user.

        • 777 on 16/10/2017 - 06:37

          @Yoman55555: Most of them will cover-I have Allianz, Coles, and Commbank
          Friends have used Terri Scheer and they are apparently good as well.

          Not use about being an overseas user- I do travel overseas quite frequently hence why?

        • yjun355 on 16/10/2017 - 11:02

          @777: Thanks. Yeah ive used Terri Scheer before.

          I think it is something in Ozbargain. Maybe just account setting. It is a bit odd. Might have to do the Talk to Moderator to get them to remove that flag. Will prevent from anyone to send you PM.

  • iforgotmysocks on 12/10/2017 - 15:45

    Yes

  • Ryanek on 12/10/2017 - 16:06
    +6

    I place more value on my time so have a property manager do all the grunt work.

    • CLoSeR on 12/10/2017 - 16:07

      This.

    • yjun355 on 12/10/2017 - 16:16

      Out of curiousity, what percentage is the fees do you pay? Presumably that is deducted against the property.
      Also, once you get the tenant in and say after 1 month month, it should be smooth sailing right with minimal support?

      • Malarkey on 12/10/2017 - 16:25
        +1

        Until something breaks, until they stop paying rent, until they hide a cat in the apartment, until they leave and you find they did a terrible job patching some holes in the wall they made while moving out.

        There are so many things that can go wrong at any stage while they're renting, not just the first month.

      • Ryanek on 12/10/2017 - 16:29
        +7

        It's at 4.8% which is just below average for the area and so far its been a good.

        Some pros that i've experienced:
        * If there are repairs that need to be done, they collate a list of quotes for me to choose.
        * They do inspections with a full report and pictures.
        * They found new tenants in a week.
        * I have absolutely no contact with my tenants. You don't want to get phone calls at midnight complaining their toilet isn't flushing.
        * No paperwork, I get monthly statements in my email.

        The less time dealing with this stuff the more time I can spend with my family.

        • yjun355 on 12/10/2017 - 17:19

          Thanks a lot. That helps.

        • c0balt on 13/10/2017 - 08:52
          +1

          You pretty much convinced me that having a property manager is the way to go if and when I rent out my apartment, thanks.

      • CLoSeR on 13/10/2017 - 15:18

        5.5%

  • cookietime on 12/10/2017 - 17:35
    +1

    In addition to what Ryanek already said, in my case, the rent suggested by the agent was considerably higher than our expectation, which was based on the average rent in the market at the time. Even with the agent fees, we still take home more than what we expected to get initially. If we were to rent out the place by ourselves, we would have never thought of going at that price.

  • Baysew on 12/10/2017 - 18:07

    See if you can get an agent just to find and vet a tenant and you do the ongoing management.

  • niknah on 12/10/2017 - 21:22

    This used to be a big forum, it still has good information…
    https://www.somersoft.com/

    They have moved here…
    https://www.propertychat.com.au/community/

    I am about to do doing a similar thing right now. My tenant left after 5-6 years.

    You mentioned that it was an apartment. You may want to get a friend to help out at the entrance to let people through the security. If you're by yourself, you could be showing people around while another person is trying to get in.

    I have one property with a manager and one by myself.
    If nothing goes wrong, the real estate agent does not much. Inspection, accounting, the occasional call to a tradie for repairs. Once a 6-12 months type work.

    The difference that I can see is…
    * The property manager will work harder to contact the tenant if they don't respond. I find that when I do it myself, I'm not accountable to anyone but me and I can be lazy.
    * They will know what the demand is in the area. But they really don't want to have more than one inspection, so they'll set the price at which they can finish their job in one visit.
    * Accounting, you'd have to add up the numbers from the bills yourself.
    * Be careful of little extra charges. Advertising, annual report preparations, admin charges, etc.

    I used to have a cheapo property manager who did nothing except rent and accounting. No inspections, never changed the rent, hardly ever heard from them. But they didn't charge much.

    Another previous property manager was great, they were even a part of the strata committee.

    • yjun355 on 12/10/2017 - 22:54

      Thanks a lot. THis helps a lot as well.

      Actually I have fair good idea on what rent to ask. We are in brand new building and few other owners rented recently.

      In add do you put the rent you asking right or is it more or less than what you want? Say i want rent of $500. Then add would say $500 right?

      • niknah on 12/10/2017 - 23:20

        Yes, maybe mention if you'll pay water, electricity, etc.

        • yjun355 on 12/10/2017 - 23:50

          Thanks

        • tess1988 on 13/10/2017 - 01:51

          @Yoman55555:

          i know water included in some leases, i guess because they don't have own water meter but do leases really include electricity in australia?

        • yjun355 on 13/10/2017 - 14:00

          @tess1988: Electricity, gas, council and strata fees is definitely not included.

          Not sure about water.

        • CLoSeR on 13/10/2017 - 15:19

          @Yoman55555:

          You can bill a tenant for water usage only if it's metered. The actual service cost of supply and sewerage are still paid by the landlord.

        • yjun355 on 13/10/2017 - 16:33

          @CLoSeR: mine is metered. However, how do you do it logistically? The bill Comes to you from Sydney water listing all components. Then you forward to tenant asking to pay the usage?

        • CLoSeR on 13/10/2017 - 17:38

          @Yoman55555: I receive the bill and email it to my agent who will bill the tenant. I have the option of having the water bills directly addressed to agent but haven't bothered.

        • yjun355 on 13/10/2017 - 18:19

          @CLoSeR: Cool thanks. Looking at my bill this is my charge now (for the quarter):

          Water service 23.00
          Wastewater (sewerage) service 148.96
          Stormwater drainage area 5.95

          So, I am assuming it is this $23 that is the usage for the quarter. So, I can ask tenant to pay that?

          Interestingly the bill is for 1 Oct 17 - 31 Dec 17. So, they just estimate the usage?

        • CLoSeR on 13/10/2017 - 20:29

          @Yoman55555: Yes the usage figure looks about right for light usage. That period is service charge, if you look on the back page they usually tell you the what the meter reading taken was and when. Usage is for period between readings, they will estimate if access is not available though.

        • yjun355 on 14/10/2017 - 12:01

          @CLoSeR: Thanks a lot. This is good to know. I think it is fair to ask tenant to pay for their usage eventhough it is just $23. Helps prevent someone going excessive with water wastage if they think it is completely free.

        • 777 on 16/10/2017 - 06:46

          @Yoman55555: Remember you can only charge if it metered. In buildings/ apartment where there is no separate meter for each individual unit, the bill is charged all collective/estimate basis.

          Estimate works this way, If first quarter usage was let's say $2000 for 10 unit, each will pay $200 each. they may or may not do the water reading for 2-3 quarters and charge the estimated 2K and the final one for that year they will read and adjust the bill pro rata which could be less or high than 2K. That was my experience 10 years ago.

  • simmos on 13/10/2017 - 19:10

    I rent out a couple of properties and have seen EVERYTHING by way of tenant type and behaviour.

    Young people can be very troublesome on a number of counts. I realise this is a politically incorrect statement, but there you go, I'm happy to remain biased and prejudiced to save my neck with dreadful tenants.

    My ultimate rental strategy has been to rent only to over-50s. If they are this age and they don't have references, something is wrong. I always insist on seeing where they live at present and actually ask for evidence of funds by way of bank statements. This sounds extreme, but it weeds out the dodgy folk and it works.

    I now have long terms tenants both over 50. I get no trouble now. All the best.

    • AlienC on 13/10/2017 - 22:42

      Sounds good.

      • yjun355 on 14/10/2017 - 12:36

        I guess you have a choice. My preference is always on a great tenant vs higher rent.

  • yjun355 on 14/10/2017 - 12:38

    What about any online platform for managing property
    I know there are few platforms out there but no one has recommended it ever. So, not sure how good they are. I guess all you really need help with is:
    a. Contacts of good reputable local trades people.
    b. Maybe something that makes end of year reporting easier. So, you don't have to dig through emails. I guess you can do this via Google Drive on your own.

    • 777 on 16/10/2017 - 06:49

      use Excel, simple loss profit statement
      a) use Service seeking/Airtasker/Yellow Pages
      b) Maintain a simple excel sheet locally or on cloud - fill data every 3-4 months makes it easier for end of the year

  • xssive on 19/10/2017 - 19:53

    I run my own real estate in the Sydney cbd. If you are considering hiring a property manager I would love to help.

    • yjun355 on 19/10/2017 - 22:00

      Cool. Thanks. What do you charge for your services? What is exit terms i.e. how long is contract?

      • xssive on 19/10/2017 - 22:18

        Shooot me a pm with the property details and your email.

        • yjun355 on 21/10/2017 - 00:35
          +1

          Happy for you to share info publically in true spirit of ozbargain.

          What is your fee structure? You can give me the rate card if it is different do different levels.

  • yjun355 on 07/11/2017 - 21:12

    This guide is pretty good as well: https://rentbetter.com.au/view/257/

  • jemjigo on 17/10/2018 - 11:51

    Hi, I just used these rentbetter guys following the posts above. They were great and we found a good tenant. Just thought I'd share feedback, and thank you for the guidance above

  • [Deactivated] on 18/10/2018 - 00:16

    I would recomend you use a PM but don't re sign them after the initial 12 months is up. Generally if there is a problem with the tennant it will happen in the first 12 months.

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