How to manage an investment property

A couple meeting a property manager.

Find the most convenient and stress-free way to manage your investment property.

If you know where and when to buy and sell, investing in property can be an ideal way to grow your wealth and diversify your portfolio. But unlike some investments that you can ‘set and forget’, an investment property requires ongoing attention to ensure that it generates the rental income you desire.

There are two options for managing your investment property: doing the job yourself or hiring a property manager to take care of the property for you. Each approach has benefits and drawbacks, so let’s take a look at both of them to see which one is the right choice for you.

Hiring a property manager

Before looking at the pros and cons of this approach, let’s find out what a property manager does exactly. A good property manager will generally:

  • Appraise the rental value of your property.
  • Advertise the property to renters, interview prospective tenants and check their suitability.
  • Inspect the property and provide condition reports.
  • Ensure that rent is paid on time and in full.
  • Ensure the rental bond is paid on time and in full.
  • Resolve any tenant issues and complaints that may arise.
  • Organise tradesmen to perform necessary repairs and maintenance when required.
  • Deal with difficult tenants and attend rental tribunal hearings.

Pros and cons of using a property manager

Pros

  • Time: Free up more time for yourself.
  • Stress-free: Less stress than managing it yourself.
  • Leverage expertise: Take advantage of a property manager’s knowledge and experience.

Hiring a property manager to take care of your investment can save you a whole lot of time and stress. From finding suitable tenants to staying on top of maintenance tasks, there are plenty of time-consuming duties associated with managing a property. When you have an agent to take care of them for you, your investment doesn’t have to be a day-to-day worry.

Property managers also bring specialist knowledge and expertise. For example, they will have contacts with trusted local tradies when a maintenance task needs to be performed, and they understand all the ins and outs of tasks related to managing your property, such as setting the rent and sorting out problem tenants. In other words, they have all the necessary tools to help you get the most out of your investment.

This approach also eliminates the risk of emotional involvement on your behalf, such as giving problem tenants another chance when you’d be better off giving them the boot.

Cons

  • Costs: Hiring a property manager may be expensive and time-intensive.
  • Management risk: You’ll have to relinquish control to someone who may not manage the property to your standards

The major downside of hiring a property manager is the fees involved. You’ll have to factor the agent’s ongoing fee into your investment plans and cash flow, and you’ll need to be satisfied you’re getting your money’s worth. Fees vary from state to state, but they are generally calculated as a percentage of the rent on the property. The fees for managing an investment property are usually tax deductible.

Another disadvantage for some property owners is that you need to be willing to take a back seat or ‘hands-off’ approach to managing your asset. There’s every chance an agent won’t manage your property the same way you would, so handing over control to someone else can be a difficult proposition.

If you choose to hire a property manager, meet a few different agents and find one you like before handing over any money. Check for references and get details on the level of service you will receive for peace of mind.

Pros and cons of DIY property management

Pros

  • Save money
  • Greater control
  • You can give your investment all the attention it needs

Some investors prefer to take on the task of property management themselves and save on agent fees in the process. The cost of maintaining an investment is always a crucial factor in the measure of its success, so saving yourself the expense of an agent’s fees is a win in anyone’s book.

If the investment property is located close by to your own home, and you know and trust the tenants, a DIY property management arrangement can work well. Rather than being one of many properties an agent has to manage, your investment is your top priority and gets your full attention. Because you have emotional stake in the property, you’ll ensure that every aspect of its management is looked after just the way you like it.

Cons

  • Time-consuming
  • Can be stressful
  • You may not have specialist property management knowledge
  • Emotional involvement can be a risk

If you choose the DIY approach, you’ll need to be willing to take on many of the duties a property manager would take care of. This includes providing a residential tenancy agreement and a condition report, chasing up rent payments, and responding to any repair or maintenance requests as quickly as possible.

Another important part of being a landlord is maintaining a good relationship with your tenants, which is not always an easy thing to do. The property management process can be a breeze if you have good tenants, but it can quickly turn into a nightmare if your tenants start missing rent payments or even damage your property.

Finally, remember that you probably won’t have the specialist industry knowledge a property manager has, such as details on current rental market performance or a tenant’s rental history. So make sure you’re aware of all the duties required before overcommitting yourself.

Choosing a property manager

There’s a lot more to property management than just chasing up rent payments, so it’s important that you hunt around for the right property manager for your investment. The majority of property managers are licensed real estate agents. You may be able to get in touch with one via the agent who handles the sale of the property you purchase, or you may prefer to do your own research to track down reputable property managers in your area.
Once you’ve found a few property managers, ask for more details about the services they offer to see how they stack up against each other.

Here are a few useful questions you can ask a prospective property manager:

  • What services do you provide?
  • How much experience do you have?
  • Are there any other properties you manage in the local area? Can you provide any references?
  • How many properties do you manage at any one time?
  • Will there be one person in charge of managing my property or will it be managed by a team?
  • How will you determine the rental value?
  • How will you find and assess potential tenants?
  • If a matter concerning difficult tenants is taken to court, will you represent me?
  • How often will you contact me about my property? What sort of communication will you provide?
  • How much does your service cost?

When you find a property manager who provides satisfactory answers to your questions, it’s time to think about handing over the keys.

The choice is yours

The right way to manage an investment property is up to you. In the end, your decision could come down to something as simple as how close the property is located to your own home or how willing you are to pay an ongoing fee.

Weigh up the merits of each approach before making your final decision. This will ensure that your property is managed effectively and efficiently, giving you the best possible return on your investment.

Need a real estate agent? Start comparing your options

Provider Details Get in touch
OpenAgent

OpenAgent logo

  • Compare 30,000+ real estate agents
  • Find the right agent and maximise your results
  • Get a free property valuation
Go to siteMore info
Commingle

Logo for Commingle

  • Compare proposals from qualified professionals
  • Access over 45,000 real estate agents
  • Free property valuation profile
Enquire nowMore info
Conveyancing Logo

Fill in your details to get free real estate agent proposals with Commingle

Receive a free property valuation, compare agent commissions and fees and choose the best real estate agent for you with Commingle.

  • Save time and money finding the right agent to sell your property.
  • Commingle is a free service that can negotiate on your behalf to get the best deal.
  • All your details will remain confidential.

Start comparing loans for property investment today

Rates last updated December 10th, 2018
$
Loan purpose
Offset account
Loan type
Repayment type
Your filter criteria do not match any product
Name Product Interest Rate (p.a.) Comp Rate^ (p.a.) Application Fee Ongoing Fees Max LVR Monthly Payment Short Description
3.99%
3.99%
$0
$0 p.a.
80%
Get a discounted, low-fee investor loan from a convenient online lender. 20% deposit required.
3.89%
4.24%
$0
$0 p.a.
80%
Fix your rate and minimise repayments for 2 years with this interest-only investor mortgage.
3.99%
4.13%
$0
$10 monthly ($120 p.a.)
80%
A competitive variable rate home loan with no application fee.
3.84%
3.91%
$0
$0 p.a.
80%
Get instant online approval and flexible repayment options with this fixed rate mortgage for investing.
3.98%
5.01%
$0
$395 p.a.
90%
Fix the rate on your investment property for 2 years with this competitive home loan package.
3.79%
3.82%
$0
$0 p.a.
80%
An essentials variable investor mortgage with a high borrowing amount so you can fund a large purchase.
3.94%
3.94%
$0
$0 p.a.
70%
Investors with a 30% deposit can get this low rate loan to fund their property portfolio. Take advantage of split and redraw facilities.
3.74%
3.79%
$499
$0 p.a.
80%
Competitive variable investor mortgage to fund your property portfolio. You can add a 100% offset account for just $10 a month.
3.93%
3.94%
$0
$0 p.a.
80%
This investment loan keeps fees low, has a sharp interest rate and comes with a 100% offset account.
4.03%
3.92%
$499
$0 p.a.
80%
A competitive 3 year investor rate with principal and interest repayments. Optional offset account with a $10 monthly fee.
4.05%
4.22%
$0
$10 monthly ($120 p.a.)
90%
Lock in your interest rate on your investment property for 2 years. Earn Velocity Frequent Flyer Points.
3.91%
3.92%
$0
$0 p.a.
80%
Investors can go from application to approval in as little as 20 minutes with this innovative online lender.
3.98%
3.98%
$0
$0 p.a.
70%
Investors can get a 100% offset account and a low rate if they have a big deposit. 100% online application process.
4.09%
4.87%
$0
$395 p.a.
90%
Buy your investment property and set your repayments for the first year. Available in QLD, NSW and ACT only.
3.99%
3.94%
$0
$0 p.a.
80%
Buy an investment property and enjoy the certainty of a 3-year fixed rate with interest-only payments.
4.09%
4.40%
$0
$0 p.a.
70%
Forget about rate rises for two years and minimise your investment repayments with this interest only mortgage. Requires a 30% deposit.
4.54%
4.59%
$600
$0 p.a.
80%
An investment loan for new Heritage Bank customers. Low fees and interest-only repayments.
3.97%
3.99%
$0
$0 p.a.
80%
Package your owner occupied loan with investment loan and receive a discounted investment rate. 100% offset account included.
4.29%
5.33%
$0
$395 p.a.
90%
Lock in a competitive investment rate and combine your loan with a credit card and transaction account for extra savings. Package fee applies.
3.99%
4.62%
$395
$0 p.a.
80%
Investors can enjoy flexible repayments and an easy application process with this pioneering online lender.
4.29%
4.31%
$0
$0 p.a.
80%
Investors will pay no application or ongoing fees for this interest-only loan.
4.18%
4.18%
$0
$0 p.a.
80%
Investors get a 100% offset account and pay no application or ongoing fees on this loan from an innovative online lender.
3.89%
3.91%
$0
$0 p.a.
80%
Investors can go from application to full approval in as little as 20 minutes with this innovative online lender.
4.13%
4.14%
$0
$0 p.a.
90%
Access a fee-free offset account and a special interest rate for investors.
4.29%
4.31%
$0
$0 p.a.
80%
A simple, variable rate investor loan from an online lender that keeps fees to a minimum.
3.99%
4.62%
$395
$0 p.a.
80%
Investors can enjoy flexible repayments and an easy application process with this pioneering online lender.
4.90%
4.31%
$0
$0 p.a.
80%
Lock in a fixed rate for 5 years and make interest-only payments with this investment loan.
4.24%
4.68%
$0
$0 p.a.
90%
Fix your investment repayments for 1 year. You can get this loan with a 10% deposit. Available in QLD, NSW and ACT only.
4.18%
4.19%
$0
$0 p.a.
80%
Investors can easily access their equity using BPAY, a debit Master Card or cheque book with this interest-only line of credit.
4.64%
5.39%
$0
$395 p.a.
90%
Pay off your investment knowing your exact repayments for the first 4 years. Get this loan with a 10% deposit.
3.99%
3.92%
$0
$0 p.a.
80%
A variable interest-only loan for investors. Fast application, low fees, optional offset account. 100% online lender.
4.29%
4.27%
$0
$198 p.a.
70%
Fund your property portfolio with this fixed rate mortgage which includes a 100% offset account. 30% deposit required.
3.89%
3.91%
$0
$0 p.a.
80%
Lock in your interest rate for 2 years and enjoy flexibility, an optional offset account and a fast online application process.

Compare up to 4 providers

Aussie Home Loans Logo

Enter your details below to receive an obligation-free quote from an Aussie home loans expert today

By submitting this form, you agree to the Finder Privacy and Cookies Policy and Terms of Use

Applications are subject to approval. Conditions, fees and charges apply. Please note that you need to be an Australian citizen or permanent resident to apply.

Credit services for Aussie Select, Aussie IQ and Aussie Optimizer products are provided by AHL Investments Pty Ltd ACN 105 265 861 Australian Credit Licence 246786 ("Aussie"), and its appointed credit representatives. Credit for Aussie Select products is provided by Residential Mortgage Group Pty Ltd ACN 152 378 133 Australian Credit Licence 414133 (“RMG”). RMG is a wholly-owned subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL and Australian Credit Licence 234945. Credit for Aussie Optimizer products is provided by Perpetual Limited ABN 86 000 431 827 (Lender). Credit for Aussie IQ is provided by Macquarie Bank Limited ABN 46 008 583 542 AFSL and Australian Credit Licence 237502. Home loans issued by the Lender are serviced by Macquarie Securitisation Limited ABN 16 003 297 336, Australian Credit Licence 237863 (MSL).

Aussie is a trade mark of AHL Investments Pty Ltd. Aussie is a subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124. ©2018 AHL Investments Pty Ltd ABN 27 105 265 861 Australian Credit Licence 246786.

By submitting this form, you agree to the finder.com.au Privacy and Cookies Policy, Terms of Use, Disclaimer & Privacy Policy and the Aussie privacy policy.

Aussie Home Loans is both a lender and a mortgage broker, and offers a range of services.

  • FREE Suburb and Property Report with every appointment.
  • Access 3,000+ loans from over 20 lenders.
  • Get expert help with your loan application, including paperwork and eligibility.
  • Over 1000 brokers who are able to help you in your local area.

Aussie Home Loans Lender Logos

The Adviser’s number 1 placed mortgage broker 5 years running (2013-2017)

Belinda Punshon

Belinda is a journalist here at finder.com.au. Specialising in the home loans and property sections, she is passionate about helping Australians improve their financial wellbeing.

Was this content helpful to you? No  Yes

Related Posts

Ask an Expert

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms of Use, Disclaimer & Privacy Policy and Privacy & Cookies Policy.
Ask a question
Go to site