My wife and I planned carefully for a comfortable retirement. We agreed to put a portion of our monthly salaries, bonuses, and tax rebates into acquiring apartment units. We chose real estate because it offers stability, and we thought it’s easier to manage than other forms of investment.
When we retired, we decided to focus on marketing our units to have a steady income still. Finding our first tenants was easy; all we did was post ads on various online platforms. But, of course, that was pre-pandemic, so many people were moving here and there.
It didn’t take long for us to realise that we should have left property management to the professionals. Here are the lessons we learned:
High-quality tenants are harder to find (if you don’t have the resources)
Unlike us, a property management company has developed a process of screening applicants. They don’t just post ads on Facebook, meet the applicants over coffee, and accept those who seemed friendly enough for them.
“Property managers strictly require documents that prove a tenant’s identity, capability to pay rent, and absence of threat. They have the resources to check the validity of these documents, and they can spot red flags, which an experienced person might miss.”, points out by Max Funding Second Mortgage Advisor Shane Perry.
Maintenance is exhausting
Leaky pipes, faulty wiring, and clogged toilets gave us a lot of headaches. And because we were determined to provide the best experience to our tenants, we made sure that repair happened even if it’s Sunday morning. One time we had to cancel a trip we’d been looking forward to because one unit got flooded. Here’s a list of landlord obligations.
My wife and I also become fans of home renovation shows that gave us the impression that property maintenance can be handled by average property owners. When we hired a property management company, they oriented us about the legal liability of do-it-yourself projects. They also took care of maintenance since then. With their network of skilled workers, all maintenance and repairs are dealt with superior quality at a more affordable price.
Invest in running shoes because you’ll be chasing rent
One of the major stress points for landlords is collecting rent, mainly if it’s your primary source of income. If your financial situation has been impacted by the pandemic, the National Debt Helpline may be able to help you find rent assistance.
When we accepted our first tenants, we thought it’s good enough that they had stable jobs. But it turned out that cute little suits and fancy job names don’t equate to timely payments. Now, our current property manager checks if the tenant has a history of late or missed payments despite being employed.
Another issue we had was about being uncomfortable talking to tenants about arrears. This became more difficult when we became close friends with them. We’d visit them to collect, and then they would kindly invite us for a delicious dinner!
The property manager now acts as our representative that sends reminders and notices of lease termination. They know the local regulations around ending tenancy, so we’re not worried about any legal problem.
From tenant screening to legal paperwork and maintenance to rent collection, all of these can be extremely taxing for landlords—especially if you have multiple properties. It would be best to hire a property management company Melbourne so that you can focus on your family, hobbies, and other income generating opportunities.
