Sometimes new investors make the decision to manage their own rental property. After all, its seems obvious – why pay an agent to do something so simple as finding a renter and fixing the odd repair?
Once they start doing it on a day-to-day basis, however, most investors realise they don’t have level of expertise required to maximise income and minimise expenses. They realise that they cannot do the work cost-effectively, and that tenancy legislation is best left to the experts, all it takes is one bad tenant and the landlord can very quickly lose alot of money.
Luckily, most people hand over to an agent before things go wrong. They realise that staying up-to-date with week-to-week fluctuations in the rental market is difficult for those not in the business. It takes a lot longer for trends to become apparent to people who are looking after just one or two properties. Do-it-yourself investors do all the work themselves and it may still cost them money in higher vacancies. It’s also very hard to keep a distance from demanding tenants when there is no third party to liaise.
Communication and arbitration is also an area where the objectivity of a third party is essential. Dialogue via a disinterested third party minimises income reducing anger and personality conflicts. Even negotiating rent is difficult for a landlord, firstly because of the emotional involvement and secondly because of lack of experience.
What is a reasonable rent to set? What are fair and reasonable repairs? How can I make sure the lease covers every contingency?
The answer? Do your homework, find out who is the most professional managing agent in your area and ask them to manage your precious investments.