Answer: By Carolyn Parrella, Executive Manager, Terri Scheer Insurance
Appointing a property manager for your investment portfolio can be a wise strategy that can significantly reduce your time commitment as a landlord.
While self-managing an investment property might appeal to some landlords as a way of reducing overhead costs, a property manager is able to act for the landlord and complete many of the landlord’s responsibilities on their behalf.
Consider the following factors to help you decide if a property manager may benefit you.
Verifying information about a potential tenant’s rental history can be more effective if you use a property manager, as they will have access to the National Tenancy Database.
This database can access historical tenancy information, including:
- Tenant Check – contains records of tenancy history,
- Individual Public Record Check – contains records of bankruptcies, court orders or judgements,
- Identity Verification – validates details against known data resources; and
- Visa Verification – confirms the validity of a visa for the period of the lease for international lessees.
Self-managed landlords aren’t able to access this database.
It’s also important to contact a potential tenant’s references. While self-managed landlords can do this themselves, a property manager will have more experience and will know which questions to ask.
Conducting property inspections
Landlords live busy lives and can often struggle to find the time to complete regular property inspections.
Appointed property managers can focus on looking after your investment and will complete property inspections with tenants on your behalf, keep detailed reports of the condition of the property and manage any maintenance or repairs required.
A property inspection checklist, used by a property manager when inducting a tenant into your rental property, is a written record of the condition of the property and may help provide accountability for any damages incurred during the tenancy.
The potential tax deductions associated with owning a rental property can make it an appealing investment.
A property manager's fees may be an eligible tax deduction for landlords however, it’s important to remember that these fees can only be claimed for the period in which the property was rented or available for rent. A landlord should keep a comprehensive record of receipts and other documentation if they wish to claim deductions as well as seek professional advice from an accountant or financial planner.
Attending to maintenance and repairs
A delayed response to maintenance issues or repairs can leave a landlord susceptible to legal liability claims if the tenant or their guests are injured as a result. Maintenance issues also need to be kept in check to ensure the property is kept in the best condition possible.
One function of a property manager can be to respond to maintenance and repair issues quickly on behalf of the landlord by appointing a suitable tradesperson to rectify the problem.
Delegating this process to a property manager can help ensure that it is completed as quickly and as thoroughly as possible.
Responding to issues in a timely manner also shows respect for your tenant and can help to create a good rental experience which could lead to the extension of rental agreements and long-term tenants.
Appropriate insurance cover
A specialised form of landlord insurance is essential, regardless of whether or not you appoint a property manager.
A sound insurance policy should cover landlords for both malicious and accidental damage, their legal liability and the loss of rental income.
A standard building and contents insurance policy generally won’t cover landlords for these risks.
Check your insurance policy and seek professional advice to ensure you have the appropriate coverage.
Collections: Property Investment