Why it doesn’t pay to be a DIY landlord

INVESTORS
04-07-2019 |

That’s why most landlords opt to pay a small percentage of their monthly rental income to a professional property manager, who takes care of things such as:

●Advertising for tenants
●Carrying out checks on applicants
●Drawing up lease agreements
●Lodging and releasing bonds
●Collecting rents
●Quotes, maintenance and repairs
●Arranging keys and access times for tradespeople
●Property inspections
●Paying bills, eg council rates
●Record keeping for tax return purposes
●Admin tasks such as phone and email enquiries
●Liaising with tenants, neighbours and body corporates
●Mediating in disputes
●Appearing before VCAT when negotiation fails

That’s all in a day’s work for Anna Jorgensen, Galldon Real Estate’s experienced rental department manager.

Finding the right tenant

She says her job generally begins with finding the right tenant, which involves a lot more than simply posting an ad online.

“A professional property manager knows the current state of the market, and they’ll help you set the right rent and show you how to present your property well,’’ says Anna.

They also know the most effective ways to advertise, and have access to tenancy databases which allow them to avoid would-be tenants with bad rental histories.

"With experience you develop a sixth sense that alerts you when there’s something fishy with a tenancy application,” Anna says.

"But we carry out due diligence to verify what applicants tell us, because it is quite easy for people to not disclose everything they should. For example, I always try to get agency references, because they have an obligation to give you accurate information.”

When things go wrong

Much of a property manager’s job is administrative and routine. But it’s when things go wrong that their knowledge and expertise really comes to the fore.

"Having negotiation skills is obviously a big benefit when it comes to mediation and resolving disputes," says Anna.

"Recently we had a collapsed pipe at a property we manage. All the drains were backing up, but the pipe was shared with the adjacent property and the landlord didn't want to deal with the neighbour because they had a history of not getting on.

“As an independent third party, we were able to arrange access for the plumber and then broker an agreement between the two owners on how to split the bill.’’

Escalating disputes

But sometimes things turn ugly, and disputes between landlords and tenants, contractors or other parties can escalate. When negotiations fail, a property manager with experience of appearing before the Victorian Civil and Administrative Tribunal can be invaluable.

"We try as hard as we can to prevent disputes reaching VCAT,” says Anna. "But when it's unavoidable, I always encourage our landlords to attend the hearing with us so they can understand what’s involved and see that we're trying to achieve the best outcome for them that is possible within the legislation.’’

Legal rights

A good knowledge of the legal rights of landlords and tenants can in many cases prevent costly and unpleasant disputes from arising in the first place.

"I had a situation where we had to take over management of a property from a landlord who was self-managing because the tenant had taken out a restraining order against them,” says Anna.

"The landlord was chasing the tenant for rent, but they didn't have a clear understanding of the tenant's legal rights.’’

Going the extra mile

Supervising ongoing maintenance is a regular part of managing a rental property. But professionals like Anna are also happy to help when asked to go that extra mile too.

"In the past we’ve been asked to renovate an apartment for a landlord, and I've also decorated rental apartments for landlords. These sort of things are outside our normal scope of work, and it's something we do have to charge for.

“But having someone with the ability to manage a renovation really saves a lot of time, money and stress for owners who are busy, overseas or out of town.’’

For help or advice with managing your rental property, contact Anna and her team of professional property managers online, call 03 9670 3330 or email

anna@galldon.com