You’ve decided to forgo the use of a Property Manager in favor of managing your property on your own. Now you need to brush up on your skills so that you don’t fall into some of many potential traps out there.
Most DIY property managers assume the hardest part will be dealing with the day-today side of things: Tenants not paying rent. Phone calls in the middle of the night. Not abiding by the rules etc. Yes, they can be frustrating, but I would argue, however, that the toughest part for any DIY Property Manager is the legal side of things. If you are not 100% up to speed on tenancy legislation and the paperwork required, you may find yourself in some unwanted hot water.
There are lots of areas to look out for, but here are a few common problems that may arise with new DIY Property Managers.
A handshake and a promise is not legally binding. You need to have a legally binding contract that outlines your tenants responsibilities. The very minimum that it should cover is the length of the lease, the rent to be paid (and when) and the condition the property is currently in and what it should be returned to upon vacating.
No Condition Report
A condition report needs to be filled in on a regular basis. It is designed to make sure both parties are protected. But it is pretty useless having one, if it is not filled out and approved by both parties.
Not asking for a bond or not handing the bond correctly can set you up for heartache down the line. Asking for a bond and putting it in your bank account is big non-no. Along with not asking for a bond at all. What will you do if your tenant damages your property and you have no bond to correct the damage?
How much do you understand about tenancy law in your area? Not understanding tenancy legislation is not a valid defense, so if you may be fined if you don’t comply with all the rules and regulations. So make sure you understand the law in detail, or you have some help here.
Entering the Property
Even though you own the property your tenants live there and they have the right to be left alone and not have you breathing down their neck. You must give notice before entering the property either for a property inspection or if you are working on the property. Make sure you are aware of how much notice to give.
So are you ready to be a DIY Property Manager? It is a lot more involved than most people think, and there are a lot of pitfalls for the unsuspecting.
Have you tried to be a DIY property manager? how did it work out for you?