“Free” rarely ends up that way
There’s nothing ever quite so expensive as a job that’s done for free, poorly. Whether it’s the mate that can absolutely change a light fitting and ends up shorting out the whole house or concrete laid like a pie crust, whatever you think you’re saving up front, you invariably pay back (in multiples) by having to not only redo the job properly, but fixing the damage done in the first place.
Where a dodgy “tradie” might only affect a small part of your home though, “saving” money on self-management can be disastrous. I appreciate disastrous can mean different things to different people, but I have seen the full breadth from tenants being “a bit behind” to literally hundreds of thousands of dollars in property value going up in smoke.
Often, the decision to self-manage is part of an admirable attitude around doing things yourself, saving where you can and focusing on paying down your debts, minimising your costs and maintaining the status quo with your property as much as you can. I think we can all understand trying to keep things tight, and saving $50 a week on management fees feels like something achievable, as long as everyone behaves and things go smoothly. And it can work – I have no doubt there are plenty of satisfied landlords that enjoy being hands on, knowing their tenants and celebrating a job well-done.
For others though, either through lack of knowledge, an overabundance of trust or just the tyranny of distance, not having someone focused on your property can be very, very expensive.
Starting with the most benevolent position, many self-managing owners might not realise just how far the needle has moved in the rental market in the past 5 years, particularly if they have had a great long term tenant. It is very common now to see increases of 50% (or more) over the course of those 5 years and an owner that doesn’t have up to date market knowledge might find themselves significantly disadvantaged – particularly in the context that interest rates more than doubled (sometimes tripled) in the same timeframe, insurance has doubled (or worse) in many cases and other holding costs have risen in kind.
Going further down the scale, I’ve seen unreported maintenance turn into major repairs, some dubious “greenhouses” and hoarders’ paradises that looked more like a transfer station than a home. A good market can only do so much, and particularly when looking to sell, problems hurt.
As with tradies, the wrong professional can be as bad as an amateur, but an experienced and qualified partner can make a world of difference. So do your homework, and count the right money, money well spent.