By Helen Collier-Kogtevs | www.realwealthaustralia.com.au | Written November 07 If you are about to purchase an investment property, you’ll need to quickly consider how you’re going to manage it. This decision should be made at least one month before the settlement date so that your property will be tenanted the day after settlement. The question most often raised by new landlords is ‘should I get a property manager or should I do it myself?’ The answer is – it depends. We prefer to pay a property manager, as they’re well and truly worth the management fee. There are so many laws and regulations that apply to leasing a property that you may not be aware of should you choose to manage your properties yourself. We managed our first property and the hassles we went through convinced us that property managers truly earn their fee. One thing we’ve found though is that there are property managers and then there are property managers; it’s a real mixed bag. It’s important you select a property manager very carefully. Don’t just appoint the first one you come to in the Yellow Pages. Selecting the right property manager will involve interviewing them, and interviewing them properly. There’s a myriad of questions you’ll need to have answered correctly if you’re to select the right property manager. A couple of key questions are: how many properties the agency manages and how many staff does it have to manage those properties? The answer should be no more than 200 properties per property manager, not including support staff. If you want more information on the sort of questions to ask, then refer to The Ultimate Property Resource Guide on our website. One of the key decisions you’ll have to make when managing your property is what level of insurance to take out on it. The answer is, you’ll need at least building, contents and landlords insurances. If you own an apartment in a large apartment block that has a body corporate, then the building insurance for your apartment should be covered in the body corporate insurance policy which applies to the whole building. You’ll need to confirm this with the body corporate company. You’ll also need contents insurance to cover the contents of the apartment or house. The amount that you’ll need to cover will depend on whether the property is leased in an unfurnished or fully furnished condition, or somewhere in between. If it’s unfurnished, you’ll still need to cover for curtains and carpet etc. Landlords insurance is essential and quality policies cover such risks as rent default if a tenant leaves without paying rent (or stays without paying rent), malicious damage, loss of rent while malicious damage is being repaired, legal costs and indemnity insurance. It sometimes also includes contents insurance. This insurance in the whole scheme of things is cheap and should not be missed. In summary, make sure you select the right property manager and have the correct level of insurance to make sure you don’t come unstuck.
