We girded our loins, ignored all the doom and gloom of local and international financial markets, and decided to take the leap of faith to buy a little investment unit in Sydney. With the share market continually volatile and often faltering, the retirement age moving ever-further away, and with demand from local and overseas people all wanting to move to Sydney, it seemed to make the most sense.
The place was preferably to be walking distance to public transport and shops, and desirable in terms of good light and low noise. Having done plenty of homework we were fortunate enough to purchase an investment unit. It was a bright well-presented recently renovated 1 bedroom – one that would easily tenant. After the purchase the real estate company that handled the sale leaped toward us to make the wise move to have them manage the unit.
In the selling Agent’s Property Management Submission they kindly stated that because we had purchased the property through them they would reduce the fee to 5% + GST. However after contacting a few other agents it seems that 5% + gst is the norm; so that did not fill us with the requisite desire and excitement to have them manage it.
Their fees broke down as follows:
1 weeks rent + gst
Statement fee per month $5.50
Disbursement fee per payment $1.65
Financial year statement fee per annum $14.95
Attendance at tribunal fee per hour $65
In one year their total cost would be $1504.75. It probably doesn’t sound that much but add it up over 10 years and its $15,000.00!! All this is of course in addition to the 5%.
So we started to toy with the idea of managing the property ourselves. I first went to www.domain.com.au and was a bit surprised to discover that every unit in the area and surrounding areas was leased was through an agent. Every one. I started to have my doubts wondering if “self-managing” was such a wise move, as it seemed that simply everyone used an agent. But going back to thinking of the costs, and the fact that the unit should rent easily – I persevered.
My next move was heading to the NSW Fair Trading website where I downloaded a Lease Contract, Condition Report and Bond Form. I did a little bit of cut and paste for the Application Form and that was the requisite documentation covered.
The pictures from the sale of the until were still on domain.com.au so I downloaded them, then the re-uploaded them for my rental advert, the whole advertising campaign for 2 weeks came to just under $300.00.
The ad went live on the Monday, before the Saturday rental inspection open day. I was inundated with enquiries and people wanting to view the property, and most before the Saturday. One couple were very persistent and requested an application form. They promptly filled it out with all references, ID’s bank statements. They also offered to pay an extra $10 a week! Based on their professional approach to obtaining the place, and having met them I made the decision to let the property to them. I cancelled the first open inspection, they have moved in, and the rent is being paid!
Of course this is the Sydney rental market. There is high demand so it’s easy to pick and choose right now. But if you are considering taking on the challenge of managing your own investment property I can only say have a go, it worked for us.