Property investors who self-manage their properties have been warned they are at greater risk of experiencing problems with tenants and exposing themselves and their assets.
A survey of 300 landlords by Woolcott Research for SGIO has found that, while 68 per cent use an agent to manage their property, 32 per cent manage their property directly.
Of the self-managing landlords, more than 40 per cent said they had experienced tenants defaulting on rent or damaging their property, and that in over half of those cases rental bond was not sufficient to cover the incident.
The research found that 33 per cent of self-managing landlords had no rental agreements in place. Also, 25 per cent did not screen existing tenants rental and employment histories or check their references.
For those who used agents to manage their properties, 95 per cent had rental agreements in place, and 75 per cent checked tenants’ rental history and references.
Less than half of all self managing landlords had specific landlord insurance, and only 58 per cent perfor-med regular property inspections, whereas 93 per cent of agents regularly conducted inspections.
SGIO state manager Gary Moore said the research showed that landlords who used real estate agents to manage the relationship with tenants faced fewer problems than those who self-managed properties.
“We were surprised to find that a large number of landlords who are self-managing their properties are not following basic property management procedures, exposing themselves to a range of risks,” Mr Moore said.
He suggested that, to protect property, self-managing landlords should: interview and reference check tenants; have a valid rental agreement in place; inspect the property at least every six months; take pictures of the property; and take out landlord insurance.
Property Council Western Australian executive director Joe Lenzo said property investors were best advised to appoint agents and ensure that they properly addressed risks to their investment properties.
“Some landlords are trying to save on costs in agent fees and insurance, but in the process they are putting their most valuable assets at risk,” Mr Lenzo said.
