In recent years there has been an increasing number of online property management tools becoming available for DIY landlords. 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 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.
If I sign up to Cubbi what do I still have to do myself?
A lot! At first glance it appears that an online DIY property management system is a great way to go. However, following are a list of all the aspects the landlord still needs to complete independently and/or at additional cost, using Cubbi as the example provider:
So, why do people choose to manage property themselves?
There are three primary reasons people choose to manage property themselves rather than using a property manager.
There is a misperception that property management fees are not worth what you get in return. We've covered this in detail in our article "Should I hire a property manager or manage my own rental property?".
As a property manager's fees are fully tax-deductible, it seems many landlords simply don't understand the depth of what is involved when they choose to save a few % in management fees in return for opting in for a whole lot of work and risk.
2. Negative past experiences
Landlords often cite negative experiences with real estate agencies as a reason to manage their property themselves. Poor communication from an agency is one of the most common reasons for a landlord leaving an agency arrangement.
3. Property management is easy (ha!)
There is an incorrect assumption of property management being easy. This may be the case when everything is going right - you have great tenants paying on time, in a property which requires little maintenance, and you're nearby to help if anything needs to be looked at.
But it's when the unexpected happens and things aren't going as smoothly that you will find the experience of a property manager invaluable. Their familiarity with the legislation, how to negotiate with difficult parties, how to prepare for and succeed at a tribunal hearing... all of these things only seem critical when the run of good times ends and this expertise is needed.
As stated so well by president of the Real Estate Institute of Australia (REIA), Malcolm Gunning, an automated online property management service can’t replace a personal service:
“Finding tenants, collecting rent and organising maintenance is the easy part. What a property manager actually does is balance up what’s reasonable and what’s not as far as a tenant’s demand is concerned, and conversely, as far as what the landlord’s expectations are against the tenant expectations".
Want to talk more about the management of your rental property and where we can add value? Contact us today.
About Carnelian Property Management Newcastle
We are a family-owned and run Newcastle business. We’re landlords. We’re home owners. We’ve also been long-term tenants. We are refreshingly accessible with intimate knowledge of the greater Newcastle, Lake Macquarie and Fern Bay rental markets.
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