For investors, one of the key decisions to make when renting out real estate is whether to self-manage their property or outsource the task to a professional. While hiring a property manager may cost an investor a little more money up-front, there is a good chance they will recoup the value – and more – over the long-term.
EBM Insurance recently outlined some key reasons for professional property management services and landlord Insurance in the September edition of Century 21's Property Investor. We've included the article below, and hope you find it an interesting and informative read.
Trashed properties highlight need for professional management
Recent incidents of tenants trashing rental homes highlight the challenges for landlords who choose to manage their own property investments.
A home in Laverton, Victoria, was found strewn with rubbish and furniture in the wake of an eviction. A sofa was thrown on the roof and a mattress wedged up a tree.
The landlord - who was too scared to be identified - told Channel Ten that he was shocked at the state of the house, which stank so much that he couldn't spend more than five minutes inside.
"It's devastating. I'm very scared. I don't want to go there alone," said the owner, who managed the property himself.
One of the evicted tenants, 'Nick', acknowledged that the sofa belonged to the tenants but denied putting it on the roof. In an interview with Radio 3AW, he admitted to not paying rent for a couple of months, but claimed the property had no smoke detectors and that the oven never worked.
EBM RentCover general manager, Sharon Fox-Slater, said it was not uncommon for rental homes to be trashed if a tenancy turned sour.
"People are complex and personal circumstances change. Tenants might fall in with the wrong crowd or react badly to pressure or trauma in their lives - taking their 'frustrations' out on the property," she said.
"Eviction is particularly fraught with emotion and unfortunately, some tenants choose to literally hit back at the landlord by damaging their property.
"When a house is damaged there's a direct cost in repairs and an indirect cost as there is no rent coming in while the place is being fixed. Landlord insurance covers both of these costs."
Ms Fox-Slater said professionally managed properties were less likely to be trashed - although there were no guarantees.
"A good property manager can check prospective tenants against databases of known trouble-makers, check references, perform regular inspections and make sure a bond is taken," she said.
"If things do turn sour, they usually have experience handling the eviction process."
The owner of another trashed investment property in Willowbank, Gordon Lee, told The Queensland Times he hadn't taken a bond and had a friend managing his property.
He returned to find decaying food in the fridge, bi-fold doors ripped out, trees and plants uprooted and walls punched in.
"It's stuffed me up financially," he said. "I've had to put the house up for auction and sell it at a loss."