With the cost of living continuing to skyrocket, it’s no surprise that many of us seek ways to save money. A noticeable trend among property owners is the inclination to self-manage their properties or, at the very least, engage an agent solely for tenant placement before taking on management responsibilities. While the idea of saving on management fees may seem enticing in the short term, it’s crucial to ask yourself if the juice is really worth the squeeze in the long run?

Unveiling the Tax Benefits

The first and perhaps most pivotal point revolves around the often-overlooked tax benefits associated with professional property management. In Australia, property management fees are tax-deductible. This means that come tax time, the actual cost of hiring a professional property manager is substantially less than what meets the eye.

Engaging in a conversation with your accountant before deciding to self-manage is a prudent move, as they can provide valuable insights into the tax implications. This helps you understand if the purported savings from avoiding management fees could be overshadowed by increased tax burdens when self-managing.

Time is Money

Managing a property demands substantial time commitments, from addressing maintenance requests to resolving tenant issues. Recognising the value of your time as a property owner, dedicating countless hours to managing your investment may not be the most efficient use of resources. Professional Property Managers are adept at handling day-to-day responsibilities, allowing you the freedom to focus on other priorities. Additionally, effective tenant screening, a critical aspect of property management, ensures reliable and responsible tenants, preventing future headaches, property damage, and potential legal issues. Furthermore, Property Managers excel at dealing with maintenance hassles, coordinating repairs promptly, and ensuring the property’s well-maintained state. Self-management may lead to juggling multiple responsibilities, causing delayed responses and potential tenant dissatisfaction.

Legal Jargon and Compliance Headaches

Navigating the complexities of property management involves grappling with legal jargon and the challenge of compliance. The ever-changing legal landscape governing property management, including upcoming alterations to residential tenancy legislation this year, adds to the complexity. Professional Property Managers are essential, bringing expertise in local and state laws to ensure compliance and minimise legal risks associated with property management practices.

Consequences of Self-Mismanagement

As with all rules and regulations, there are consequences and penalties that can be enforced on self-managing owners. Unfortunately, governing bodies won’t accept the old “Sorry I didn’t know” line, and there are many i’s to dot and t’s to cross in property management. Not adhering exactly to the RTA act and supporting regulations could see you fined, facing legal action, financial losses, and it could also put you in a situation of no recourse with your tenant even if they have done the wrong thing. The main purpose of a Property Manager is to protect your investment; they have the knowledge to ensure your tenancy is managed within the mandatory guidelines.

Emotional Distance

Renting out your property involves dealing with tenants on a personal level. When issues arise, maintaining emotional distance can be challenging. Professional Property Managers act as a buffer, handling conflicts, rent reviews, and difficult situations objectively. This emotional distance can help protect your investment and maintain a professional landlord-tenant relationship.

In conclusion, while the allure of saving on management fees may be tempting, the hidden costs of self-managing an investment property can far outweigh the initial savings. Time, legal complexities, tenant screening, maintenance issues, and emotional involvement are all factors to consider. Hiring a professional Property Manager not only alleviates these burdens but also ensures that your investment is managed efficiently, effectively, and in compliance with all relevant laws and regulations. Before deciding to go the DIY route, it’s crucial to weigh the long-term implications and determine if the juice is truly worth the squeeze.

Stacey Kouroulis

Director of Property Management

0417 926 091

stacey@paragonproperty.com.au