The Importance
OF A
Propety Manager
Anybody that has an investment property or has plans to own one in the
future has an obvious goal which is to accumulate financial wealth.
Being a finance broker, I have some clients and friends that I have met
in the last 6 years, that have opted to privately manage their
investment properties.
Essentially, you could opt out but I’m here to provide some perspective
on the costs and services of a property manager. The going rate for a
property manager is somewhere between 5.5% – 7.5% of the rent that is
charged to the tenant. The property manager takes that percentage as a
management fee to essentially be the middle man between the tenant and
the owner. They help with everything from finding a tenant to initially
rent the property, managing the relationship with the tenant,
facilitating rental payments from the tenant to the landlord and most
importantly, conducting routine inspections to identify and keep track
of any damage the property might incur.
How does this look as a $ figure per year on a rent amount of say $400
per week?
At the top end, you would be looking at say $1560 per year or $130 per
month. Confirm with your accountant but you should be able to claim that
on your tax return and get some of that back. $130 per month seems like
a pretty good saving right? Could pay for your internet, Netflix, kayo,
sports and still have some change. Now let me explain the ugly side of
not having a property manager. So, you’re managing your rental property.
Life is great and you’re saving some extra cash per month. You’ve also
got the comfort of your building and landlords insurance as well, just
in case the tenant does damage to the property which shouldn’t be any
different with or without a property manager. Now life has been busy for
you, the tenant has been paying without a problem for the last 12
months. You just haven’t had the time to do routine inspections on time.
It’s been about a year. You feel slightly guilty for not doing 2
inspections for the year but how much damage could they possibly do in
the last 6 months? They’re either the type of people to take care of the
property or not, right? Then inspection day arrives and yup, you guessed
it! Your tenant has been growing Marijuana plants in the whole house and
hasn’t even been living there. They’ve removed the plaster from the roof
to make room for that hydroponic, marijuana growing action. The whole
house is trashed but at least you have the peace of mind that you
purchased landlord insurance, Phew! You contact your insurer and explain
to them what happened. They’re very helpful with you over the phone and
guide you through the claims process. Two weeks later you get told your
claim is denied because you didn’t follow the terms and conditions of
the insurance, requiring routine inspections. You would be looking at
big money to repair that property which would set you back a long way. A
competent property manager would save you all this pain. It is only my
opinion, but I think the money spent annually on a property manager is
well worth it.
And with that being said, here is the name of a property manager.
Nicole Byrne
Genral Manager
M: 0400 016 774
E: nicole@jimbyrne.com.au
Jim Byrne Real Estate
Suite 14/66 Victor Cres, Narre Warren VIC 3805
- Luke Jacobson
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