Is self management for you?

management for you

Is self management for you?

Do you own a property or have you recently acquired a rental property? Inevitably the thought of whether to employ a property manager, or manage the property yourself might have crossed your mind. This guide will aid you realise some of the tasks, requirements and obligations (legal and otherwise) involved in property management. Ultimately it will help you answer the question, Is self management for you?

Let’s take a closer look at some of the basic legal requirements you need to be aware of. We will also explore how the engagement and expertise of a property manager could help with the management of this for you.

Legal Obligations

Each country has different regulations set out in the Landlord-Tenant law. The landlord’s and tenant’s interactions, rights and obligations are governed by the Landlord-Tenant law. As a landlord you are legally obliged to follow the regulations set out in the Landlord-Tenant Law. Regardless of the varying legal systems in different counties there are usually five fundamental obligations for a landlord;

  1. Disclosure of owner
  2. Security deposit
  3. Delivering possession of the unit
  4. Maintenance
  5. Liability

Needless to say the property must be keeping in line with local regulations and relevant other compliance issues. These will include anything from health and safety standards, installation of smoke and fire alarms, ingress and egress accessibility for the disabled.

Declaration of owner’s details

It is a legal requirement for every landlord to provide the tenant with specific and accurate information with regards to the ownership of the property. The ownership details of the property to be availed to the tenant in writing include the name and address of owner(s). The details should be of the person or people responsible for managing the property, collecting rentals, and address any complaints or maintenance issues. Where landlords are using the services of property managers, it is the property manager’s details that would be provided instead of the owner’s.

Management of bond and security deposit

One of the most key legal obligations for each and every landlord, self-managed or otherwise, is the management of the tenant’s security bond. Every landlord has the right to charge their tenant a security deposit. No one should downplay the significance of a security deposit in the slightest. The security deposit is in essence held in trust and acts as security in case a tenant;

  • Fails to pay rent
  • Causes damage to the property
  • Breaches the lease agreement

Needless to say mismanagement of security bonds can cause problems between tenants and landlords. The best advice for self-managed property owners is to follow the law to the letter. This will include;

  • The maximum amount of security deposit charged
  • Storage of the bond
  • The security deposit refund policy at the end of the lease.

Seasoned property managers will undoubtedly be well equipped to with issues that can arise around bond refunds. The use of expertly managed condition reports ensure that both the tenant and landlord agree to the state of the property before the tenant moves in. Regular property inspections conducted by trained property managers also help to ensure all maintenance and damage issues are addressed when and where they happen.

Maintenance issues

Whatever maintenance issues that arise under a self-managed property are the responsibility of the landlord. Tip: Tracking the lifespan of everything from the roof, to the plumbing, to the carpeting will help create a realistic, future-minded budget for property upgrades and repairs. Under a self-managed property, the landlord must be contactable at all times of the day in case of an emergency.

One of the most critical functions of the property manager is to take the stress off of the landlord’s hands. The property manager becomes the point of reference for immediate and urgent contact with the tenant. Additionally due to their close working relationship and negotiating power with tradespeople they are in a position to get landlords the best prices and services on all maintenance jobs.

Liability

Obligations to limit liability: the landlord is legally obligated to adhere to the terms of the Lease Agreement. The written lease agreement will serve as a contractual arrangement that clearly stipulates the conditions under which the tenant will occupy the landlord’s house. Some of the key considerations will include;

  • The condition of the rental property must be safe for purpose.
  • All installations including electricity, water, gas, and any other should be working.
  • Expedient treatment of any health threatening issues.
  • Adherence to any other issues stipulated in the lease agreement.
  • Proper management of the security bond.

Property managers stay abreast of all and any legal or legislative changes that can impact the property owner. A property manager will be well skilled and equipped to deal with almost all of landlord’s legal obligations.

Determining rentals

The onus of the appropriate rentals to charge for a property lies squarely with the landlord under a self-managed setup. To determine the premium rentals to charge we advise examining what other similar properties, in similar conditions in your local area charging. Tip: Be mindful not to price yourself out of the market and not to under value your investment either.

A skilled local property manager has rental information at their fingertips and will be focused on ensuring the landlord’s rental return is maximised. The truly exceptional ones conduct annual rental appraisals to ensure you are always charging the highest possible rent and maximising your rental yield.

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