I Can Find A Tenant Myself I Don’t Need An Agent? REALLY…? (Case study)
You’re probably asking yourself “Mmm…Will I save money putting a tenant in myself” In the short term maybe, but in the long run your taking a gamble on one of your biggest assets. I can understand landlords trying to save money, as costs are always going up and DIY is all the rage.
I was talking with our Property Management Supervisor Julie Collins and she said “What we find is that people say they will put in a friend and start advertising on Gumtree” There is nothing wrong with this but landlords don’t have the tools that agents have and go on only instinct or face value.
Now going with your instinct is a skill you pick up being in property management after several years but we ALWAYS do our reference checks regardless.
You would think that at face value a police officer in Seven Hills would be a good instinct and an easy choice for a tenant and one you would not be concerned about.
Well this is exactly what happened and it’s not an isolated incident. See what grinds my gears is that some landlords don’t think it through when trying to save money. Being a landlord/agent myself, I had a look at managing it myself and not though our office. At least I researched all the laws and evaluated how much of my life/hassle it would take.
Here were my thoughts on renting out my granny flat in Seven Hills not though our office;
- If I found a tenant myself, I may end up having the property untenanted for 2 weeks or maybe longer than if you engaged the services of a good property manager. If you are renting a place for $400 per week and it is untenanted for 2 weeks, that is a cost of $800 that you have incurred as a result of not using a good property manager.
- I would not get statements for tax purposes and the banks so if I wanted to get another investment property (some banks will not except non property management agency statements). I would have to still legally do my paper work anyway.
- Could end up with a tenant that calls about every little issue and also get calls at 2am about the water not working etc (wanted to stay in my nice warm bed), our agency has a 24hr emergency phone.
- I didn’t have access to “Bad tenant” data bases only a list of their own good ones.
- Good cop bad cop. I did not want to get emotionally attached to the tenants and make bad investment decisions. At least I can make the people in my agency have the hard conversations with the tenant when needed e.g. rent arrears, gardening, damages, kicking them out etc…
- The management fee of $30 per week is tax deductible so it’s only really $17 per week. I live closely as well, but am “detaching” myself from the property.
Eventually I decided against it. It’s now set and forget, our property management deals with chasing money and repairs and I can have a friendly relationship with the tenants.
Now let’s get back to the police officer that trashed a house in Seven Hills that was found on gumtree. Please take note we are happy to work with our landlords and find them a tenant, you can manage it after we have done all the paper work.
I do not advise it though, not just that I’m trying to sell our services, but it can still end up messy even after all our checks and paper work. At least you would have an ingoing inspection report and a law enforceable lease.
We find many DIY landlords have “friends” move in. Don’t have a lease. They cannot evict the squatters and collect the 6 weeks rent owed. This is a very bad situation!
Anyway we ended up taking on this property after this landlord realised they could not handle dealing with this while he went back to china to live. Julie Collins said “we don’t normally take on clean up jobs like these. The tenant was 6 weeks behind and it was going to be a lot of work to get it back, not mention to damages to the Seven Hills property”.
Julie’s diligence also found the owner was charging the full water bill to the tenant, not just the usage which is a big no no. We had this corrected and many more issues, in fact Julie Collins said “the owner was in breach of Residential Tenancies Act 2010 in so many ways it was not funny!”
Now to the tenant side of things, you would think “He is a police officer how bad could he be” Well as Julie was to take over this property she soon realised how much of a nightmare tenant he was.
The landlord said it was ok to paint a feature wall in a light neutral colour and the tenant ended up painting a dark colour. Later the owner asked him to paint it back in a neutral colour, to which the tenant clearly didn’t finish. To find out more about this topic go to this articleTenants Performing DIYMaintenance On Your Property, Good Idea?
Not sure why but there are plenty of holes in walls
My favourite photo is a massive pool of paint on the floor
Here is some more entertaining photos.
As you can see this house was trashed. We took the tenant to Consumer, Trader & Tenancy Tribunal which he did not attend. Because our case was so well documented and the damage was so severe we were awarded full costs, which has never been done before given the age of the carpet/paint work.
If you would like to avoid all these hassles and save money in the long run having your investment property professionally managed give Juile Collins a call on 02 9869 2333.
About Jhai Mitchell
Jhai is an award winning Internet Marketing Real Estate Agent for Elders Toongabbie and Kings Langley. After running his own internet marketing business he has now set his own sites for the real estate industry. He observed that 90% of real estate agents did not know how to market themselves online. Jhai is now fixed on one goal. To teach real estate agents that they can market online so much better than they currently are.
Since then he has been consistently quoted in the Sydney Morning Herald and Real Estate Business online. He is a regular guest blogger on TheHomePage.com.au, sharing his expertise of marketing aspects for the Real Estate Industry. His biggest passions are his wife, martial arts, dogs and most of all property.