Cairns South 
Hiring a professional property manager can be an invaluable decision for property owners, but it comes at a cost.
In Australia, where the average property management fee across all states is approximately 7.5%, property owners often find themselves contemplating whether it’s worth the expense.
In this article, we’ll explore the nuances of property management and the pros and cons of self-management versus hiring professionals. We’ll also answer the question: do I need a license to manage my own properties?
Do I Need a License to Manage My Own Properties?
In Australia, property management can be handled in three ways: through a real estate agent, a property manager, or independently by the investment property owner.
If you opt to handle the management of your own rental properties, you don’t need a property management license. You can oversee tasks such as collecting rent, handling maintenance, and dealing with tenant issues without formal licensing.
According to a survey conducted by Finder, one in four Australian landlords manages their own investment properties.
In Tasmania, where management fees can be as high as 12% of the rent, 43% choose to self-manage. In New South Wales (NSW), where fees are lower at around 7%, less than a quarter of landlords opt for self-management.
Self-managing your property can save you hundreds if not thousands of dollars, but it’s essential to weigh the cost savings against the time and responsibilities involved in effective property management.
What Are the Advantages of Managing Your Own Property?
Managing your own property can offer several advantages, including:
Cost Savings
One of the most significant benefits of managing your own property is the amount of money you’ll save. By self-managing your property, you can avoid paying property management fees, which can typically range from 5% to 12% of the monthly rent.
Direct Control
Self-management allows you to have direct control over your property.
You can make decisions about tenants, maintenance, and repairs without relying on a third party.
You have the autonomy to choose your tenants based on your own criteria. You can personally screen tenant applications, conduct interviews, and make the final decision about who will rent your property.
You also have the authority to oversee property maintenance and repairs directly. You can choose maintenance vendors, schedule repairs, and ensure that work is done to your satisfaction.
Increased Profit
With lower expenses, you can potentially increase your rental income and profit margins. You keep all the rent collected, minus the costs of maintenance and other expenses.
Property management companies may charge additional fees for various services, such as leasing fees, maintenance coordination fees, or inspection fees.
By self-managing, you can cut down on these extra costs and keep more of your rental income.
Flexibility
Property owners who manage their properties have the flexibility to create lease agreements that align with their specific requirements. This includes setting rent amounts, lease durations, pet policies, and other terms to suit their preferences and market conditions.
Hands-On Involvement
For many property owners, the active involvement in the day-to-day management of their real estate investments goes beyond the financial benefits; it’s a source of personal satisfaction and fulfilment.
Being directly involved in property management allows owners to see the immediate impact of their decisions. Whether it’s making property improvements, optimising rental rates, or fostering positive tenant relationships, they can witness the results of their efforts.
What Are the Disadvantages of Managing Your Own Property?
While self-managing a property can offer financial advantages and personal control, it requires a significant investment of time, effort, and expertise.
Property owners should carefully consider their individual circumstances and capabilities before deciding to take on the responsibilities of property management.
Here are some of the key drawbacks of self-managing a property:
Time-Consuming
Property management can be incredibly time-consuming.
From screening tenants and handling maintenance requests to addressing emergencies and legal issues, it requires a significant commitment of time and effort.
This can be particularly challenging for property owners with busy schedules or multiple properties.
Stress and Responsibility
Property management involves a wide range of responsibilities and potential stressors.
Dealing with tenant issues, property maintenance, and unexpected problems can be emotionally taxing.
The pressure of handling these matters alone can lead to stress and burnout for some property owners.
Legal and Regulatory Compliance
Navigating the complex web of landlord-tenant laws and regulations can be daunting.
Property owners must stay up-to-date with changing laws, fair housing regulations, and local ordinances to avoid legal issues.
Failing to comply with these regulations can result in costly disputes or fines.
Property Maintenance
Property maintenance and repairs are ongoing responsibilities.
Property owners must ensure the property is well-maintained, addressing issues promptly to prevent costly repairs down the line.
Coordinating maintenance can be time-consuming and may require expertise in various trades.
Emergency Response
Property owners are on-call 24/7 to handle emergencies.
Whether it’s a burst pipe, electrical problem, or security issue, owners must respond quickly to protect tenants and the property.
Some even live on-site to ensure rapid response in critical situations.
This constant readiness can be stressful.
Lack of Expertise
Property owners may lack expertise in property management, real estate law, and maintenance. This can lead to mistakes, oversights, and inefficiencies in managing the property.
Limited Network
Professional property management companies often have established networks of contractors, maintenance personnel, and legal professionals. Self-managing property owners may have limited access to these resources, potentially leading to higher costs and delays.
Why You Should Hire a Property Manager
Hiring a property manager can be a smart decision for property owners, especially for those who want to minimise the hands-on involvement in managing their real estate investments.
Property managers are professionals with specialised knowledge of property management, real estate law, and local regulations.
They have experience dealing with various aspects of property management, from tenant screening to maintenance.
They can mediate disagreements, enforce lease agreements, and take appropriate legal steps if necessary. This skill set can help maintain a peaceful and harmonious tenant community.
Moreover, property managers have a solid grasp of market dynamics, allowing them to adapt rental rates to changing trends, ensuring competitiveness while maximising rental income.
With their legal expertise and risk management capabilities, property managers offer property owners peace of mind, making property management a more streamlined and profitable endeavour.
Conclusion
In Australia, you can manage your property without a license as long as it’s under your name. However, it’s important to acknowledge that while managing the property yourself can save you money, it demands a substantial investment of time and effort.
In many cases, property owners find that the complexities and responsibilities of self-management outweigh the potential cost savings. Therefore, hiring a professional property manager often proves to be the simpler and more efficient choice.
Property managers bring a wealth of expertise, market knowledge, and resources to the table, allowing you to enjoy a more hands-off approach while ensuring your real estate investments are well-maintained, profitable, and compliant with all relevant laws and regulations.
