The real cost of self-managing your investment property

Do you know the latest fire regulations for a leased property? Would you know what to do if a tenant doesn’t pay? Have you got a list of certified tradesmen you can contact in the event of an emergency maintenance? Are you registered with Rental Bonds Online (RBO), the NSW office of Fair Trading’s service to manage bonds online?

Gone are the days of a nod and a wink and a verbal agreement; being a landlord does come with responsibilities – and lots of paperwork. There is a lot more that goes into managing a property than you think.

Setting up a tenancy is consuming – you need to know where to advertise, find and be available for potential tenants to view the property and make sure you have a watertight lease. Once the tenant is in, there are ongoing inspections, collecting rent, handling maintenance and managing issues as well as ensuring you’re up to date on the latest legislation and current compliances.

Litigation

Both you and your tenant have legal rights and there is legislation designed to protect both of you.

For instance, unless it is an absolute emergency, if you are wanting to enter your property, you need to give the tenant notice and generally you can’t access on Sunday, public holidays or outside of 8am to 8pm. This ensures the tenant’s right to privacy while giving you the right to see your property.

If you aren’t aware of legislation and you don’t follow correct procedures, you may find yourself being fined or sued.

Are you compliant?

There are certain standards a rental property needs to be at to ensure your tenants are safe and any occupational health and safety (OHS) risk is minimised. For instance, landlords are required to install, maintain and repair smoke alarms. If the tenant is hearing impaired, landlords may also be required to install an alarm with flashing lights and vibrating pillow pads.

If you didn’t have a working fire alarm, at the very the least you’d be fined; at the worst your property will burn down and there may be injuries or loss of life.

You will also need to check your swimming pools and spas, windows and balconies and also that security measures are in line with current legislation.

Finding the right tenants

Finding the right tenant who will care for your property and pay the rent on time may not be easy if you haven’t got access to screening tools and credit checking agencies. People always seem so respectable and trustworthy when you meet them for the first time!

Renting your property to friends is not without its issues too; it may start as a great agreement, but we’ve seen friendships lost when six months down the line, the friends’ financial situation has changed, and it’s you who’s going without the rental income.

If a property isn’t properly managed, not only will your stress levels rise, and you could be finding yourself on the wrong side of the law, but you’ll also lose time, money and potentially, friendships too.

While many people do successfully manage their own properties, we’ve had self-managed landlords come to us and we’ve sorted a range of issues and problems; many of these could’ve been avoided had they known the legalities involved and taken different actions early on.

If you are looking for a property management agent or would like to know more about how property management and investment works give us a call on 02 4956 9777, send us an email to mail@newcastlepropertymanagement.com.au or pop into our Cardiff office for a chat.

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