How to decide whether or not to be a DIY landlord
When you become a landlord, how do you plan to manage the property?
Determining if you will self-manage your investment or engage a property manager to handle your tenancy for you is the first step in the process.
Before you buy, this may determine how far, geographically, you should search for your investment.
Consider professional property management if… You’re an interstate investor.
A property that is professionally managed can be in virtually any location in Australia, because you can source a real estate agent to manage it on your behalf – even if the home is on the other side of the country.
You can establish a good working relationship and they will manage the day to day running of the property on your behalf.
Consider DIY self management if… You live near your property.
If you wish to self-manage, it is more appropriate to select an investment that is geographically nearby to where you are located.
For first time investors, it is often a good strategy to buy near to where you live, as you are more likely to have a better understanding of the market you are purchasing.
Editors note: When weighing up the pros and cons of using a property manager or going DIY, make sure you consider all of the potential risks and rewards.
You may save a small amount of money to manage the property yourself, but you run several risks when doing so, such as under-renting the property, not increasing the rent regularly, placing unfavourable tenants or even being fined, if you fail to abide by relevant landlord legislation.
Most professional investors accept the cost of a property manager as simply being part and parcel of the process.
For more, read ‘How to make peace with your property management fees’.