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Self Managing Landlords, are they savvy?
A brief dissertation on on the advantages of having a Property Manager, managing your investment property.
By: Peter Carabot
Rent arrears, damage to the property, excuses and so on. For the following few years,until we purchased the agency, we had all our properties with a managing agent.
I would like now to let "Pay Less Tax On Property" do the talking, their address is at the bottom of the page.
The property management debate seems to be one that rears its head on a regular basis.
There are property investors who believe whole heartedly that they should be managing their own property because it will save them money and on the surface it may. From my knowledge of talking to property investors I would have to say that unless you are a full-time investor (and even then I would doubt it) and giving 100% to managing your properties, then self managing your properties should be looked at very carefully.
Why do I say this? Well as portrayed on the TV last week a young property investor had decided to self manage her property and as she admitted, her busy lifestyle meant that she did not check up as much as she should have and within a very short period of time the property was severely damaged.
Self managed: One of the problems with self management is that ‘life gets in the way’. Say one of your family got ill your first thought would be to look after them and get them well again and your property management would be put on the back burner for a few days or weeks. During this time goodness knows what can happen. An awful lot, let me tell you!
Property management contract: Under a similar set of circumstances where the property manager had to stop work, the company would cover her work with another staff member.
Herein lies an important difference between self managed and contract management.
From a finance point of view
The savings that you appear to make as a part-time property manager can very quickly be off-set by bad management and even multiplied if you have ended up with bad tenants. Unfortunately bad tenants will seek out self-managed properties because they know in most cases the properties will not be managed properly or the owners will not want the confrontation that will take place, nor the correct legal procedures to evict tenants.
Another step that property investors often do not do if they are self managing, and that is to do the full reference check of an intended tenant. It is critical that a prospective tenant is reference checked at past rentals, income and credit checked.
I will leave this debate with you to choose the winning side.
Reprint of an article by : Tracey Lunniss TSL Project services
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