The time has come for you to finally start earning back some of the money that you’ve put into that investment property.
Now comes the One Million Dollar Question – do you really need a licensed real estate agent (or property manager) to handle all of the finer details of getting renters into that property and keeping them there?
(Hint: yes, you do. And no, this isn’t where we insert a shameless plug about how you need to choose us).
Having an investment property that you’ll earn rental income from sounds like easy money to some people, but there’s a surprising amount of work that goes into collecting those monthly cheques.
A lot of work, actually.
First you’ve got to get the word out to the general public that your property is available, then you’ve got to pour over the potential pool of interested renters (and usually not just two or three people, but twenty, thirty or fifty).
You’ve got to conduct interviews and background checks, put together an amenable contract (rental agreement) and make arrangements to collect any security deposit and first month’s rent… and that’s all before your renters have even started bringing their belongings in.
All of that work is probably more than you anticipated when you decided to start your journey as a landlord, but the process only gets more difficult and time consuming from there.
As a landlord you will be responsible for collecting monthly rent, making sure that the property is maintained and always in a safe and liveable condition and you’ll have to renegotiate contracts as they expire.
You will also be responsible for dealing with tradesmen for necessary maintenance and repairs to ensure that everything is maintained and kept in good condition.
If you are doing this on your own, you may even have to chase down money from renters who are late on payments or who fail to pay.
A licensed real estate agent who specialises in property management can, thankfully, take all of these duties (and potential headaches) off of your plate as landlord.
Many landlords, especially first timers, feel that they are more than capable of handling all of these tasks without having to outlay the fee that comes with enlisting the help of a property manager.
And you know what? They’re probably right. At least in the beginning. But doing it month in month out is a completely different story.
While there is a cost associated with working with a property manager (an average of about 7-10% of the rent you’ll collect from your investment property), many landlords ultimately find that the cost is well worth it for all that a good property manager can and will handle.
Here are just a few of the necessary duties that your property manager can take off of your plate:
Marketing and advertising your rental property
This could involve placing and maintaining online and print ads, fielding calls and email queries about the property and working to make sure that your rental property is positioned to stand out in what could be a crowded Sydney market.
Collecting and distributing money
While this is the best part of being a landlord, it can come with some serious headaches.
Your property manager can set up accounts, collect the rent, set up direct debits and handle all the bills that you are responsible for as outlined in your rental agreement.
He or she will handle rent issues involving late or non-payments, serve as your collection agent if necessary and represent you in any confrontations (legal or otherwise) when it comes to property finances.
Ahh The Paperwork
There is a seemingly never ending paper trail that is required for successful renting of a property you own. From initial rental agreements, to banking and financial documents to insurance on your property and everything in or on it.
All of this paperwork is time consuming and can be seriously confusing for someone who is new to managing investment properties, but a licensed real estate agent is well versed in completing it all quickly and accurately so you can feel confident that your investment property is both legal and profitable.
Your property manager will have a list of people who can keep your rental property in good condition and so it can consistently keep earning you money.
If you are considering engaging a real estate agent to handle your rental property, there are some qualities that you’ll want to look for. The agent you hire should have experience in managing rental properties and a track record of success in their endeavours acting as the mediator between landlord and tenant.
Your property manager should also be highly organised, motivated and have the ability to provide references that show how effective and trustworthy they are when it comes to running a rental property.
So, there you go.
Owning a rental property can be a great source of main or secondary income, but only if it is managed properly.
If you are new to being a landlord or if you are unfamiliar or uncomfortable with any of the necessary tasks of successfully managing a rental, you might be best served by bringing a qualified and experienced agent into the mix.
You licensed real estate agent will deal with the day to day tasks and challenges that crop up when managing your rental property – so you can enjoy the income from your investment without all of the stress that normally goes with with maintaining a successful landlord tenant relationship.