Generating passive income from property is a dream for many Australians. The average rental price for a house in our country is $555 – imagine earning that from your investment week in and week out without spending a single extra hour at work.
It’s certainly possible, but unfortunately investment isn’t as easy as some think. It’s likely that you’re going to need some help along the way. That’s why we’ve busted three common property management myths, so that when you’re ready to invest, you get the assistance you need to ensure your investment performs as it should.
1. MANAGING A PROPERTY YOURSELF IS STRAIGHTFORWARD
Roughly 30 per cent of all rental properties are self-managed, according to Australian Bureau of Statistics data.
Australians are a famously resourceful bunch. That’s probably why roughly 30 per cent of all rental properties are self-managed, according to Australian Bureau of Statistics data. It’s certainly possible to go it alone but if you believe it’s an easy job then you’re setting yourself up for failure.
There’s so much more to property management than most people think and it can be a challenging and time-consuming task. If you do manage the property yourself, be prepared to conduct regular rent reviews, and quickly replace your tenants if they leave.
You’ll also need an in-depth knowledge of tenancy law in your state or territory so that if any disputes come up, you know where you stand. Knowledge of those laws is essential so that you can act legally and effectively in the event that your tenant stops paying rent.
There are dozens more tasks you’ll need to carry out if you self-manage, so it’s essential that you either hire a property manager or be 100 per cent sure you know what you’re doing.
2. HIRING A PROPERTY MANAGER WILL HURT YOUR BOTTOM LINE
While a property manager will cost you a percentage of your rental income, they could save you far more in the process.
Property investment isn’t cheap. You’ll have mortgage repayments to worry about, not to mention maintenance costs, landlords insurance and all the rest. For that reason it’s completely understandable why you may think that a property manager is simply another expense eating into your profits.
The truth is that while a property manager will cost you a percentage of your rental income, they could save you far more in the process. That’s because a good property manager is an expert in quickly replacing tenants when they leave, thus minimising the impact of vacancies.
With in-depth knowledge of tenancy law, and years of experience building relationships with renters, a good property manager will reduce the chances of a costly dispute with your tenants. They may be able to get discounts on maintenance costs through their industry contacts and could save you money in several ways that you may not even notice.
3. INVOLVING A THIRD PARTY MAKES THINGS MORE COMPLICATED
The mark of a good property manager is that they make things easier for you, not more difficult. If you have a clear and honest conversation with your property manager when the relationship begins, communication will be effortless and you won’t have to worry about the state of your investment.
That means with the right property manager by your side, you’ll be just a little closer to that dream of earning passive income.