Two years ago we wrote the article "Should I Use An Online Property Management Service Instead of Hiring A Property Manager?". In this post we spoke about one of the many online property management service providers offering very low fees, raising some food for thought around what may or may not be included within those low fee structures.
Now, two years later, there are even more options for investors to consider in the management of their property. In this article we revisit the potential pitfalls of selecting a very low cost or flat fee property management business.
When budgeting for the costs of holding a rental property, most investors factor in the regular, repeatable expenses such as council rates, water service charges, building and landlord insurance, property management fees and strata fees (where applicable).
From time to time there are additional expenses every investor is likely to incur - the trick is that the timing and extent of these expenses tends to be unpredictable. Due to their unpredictability, they can be more difficult to budget for and are sometimes neglected completely.
Following is not an exhaustive list by any means, however should help as a reminder to new and seasoned investors alike of the importance to allow for a savings buffer to ensure any untimely surprise expenses are little more than an inconvenience.
When choosing a property manager, it can feel like everyone is offering much the same thing. The fees and charges between different options can make it hard to compare apples with apples.
Many investors resort to creating a spreadsheet, listing all the real estate agents they can find and recording the management fee, lease preparation fee, monthly admin fees, advertising fees, etc. for each. Some even work out the annual cost of using each agency, and whoever comes in cheapest "wins".
If this sounds even remotely like you, read on. In this article we cover the 3 criteria most people use to choose a property manager, and why these criteria are flawed.
There are many advantages of consolidating your investment property portfolio to be managed by a single property management company. The benefits range from operational aspects which make life easier for you as an investor, to being able to maximise your return on investment through having visibility of your investment properties as a whole.
When considering turning a home into a rental property in Newcastle, one of the first questions asked by a new landlord will be "How much will the rental property management fees be?".
As we advise each investor we meet, property management fees should be considered alongside a mix of many other aspects. The old saying "cheapest is not always best" certainly applies to rental property management fees.
Why? Here a just a few reasons (but don't worry, we also answer the question...!).
As a landlord, it can be difficult getting an understanding of the cost of property management fees in Newcastle. Most real estate agencies and service providers are comfortable providing numbers such as how many new management agreements they've signed in the past month, or the percentage of their properties which are occupied. But there is little transparency around cost.
We'll cover this in detail below, including an example comparison of typical property management costs from a Newcastle real estate agency compared with our own fee structure.
Online property management tools have increased in number in recent years. These systems generally offer low monthly fees in return for largely automated and online service. The most dominant service of this kind in Australia to date is Cubbi, though there are many others.
Generally, the way these online property management services work is that a very low management fee is taken (in Cubbi's case, currently 2%) and the online platform is used to manage the processes which can be automated. For example, the Cubbi platform forwards any rental enquiries and applications on to you as the landlord, will collect and deposit rent into your account, and will follow up on any unpaid rent.
In reality, these are the easiest aspects of property management and require little skill or knowledge to complete.
Carnelian Property Management Newcastle NSW
We are a family-owned and run Newcastle real estate agent offering expert property management across Newcastle and Lake Macquarie.