One of the first decisions every landlord faces is whether to manage their rental property themselves or hire a property manager. Both approaches have their merits, and the right choice depends on your circumstances, skills, and how much time you can dedicate to being a landlord.
This is not a decision to take lightly. Property management affects your tenant relationships, your legal compliance, your cashflow, and ultimately your investment returns. Let us walk through what each option involves so you can make an informed choice.
What Property Managers Actually Do
A property management company handles the day-to-day running of your rental property. Their services typically include finding and vetting tenants, conducting regular inspections, coordinating maintenance and repairs, collecting rent and chasing arrears, handling tenant issues and disputes, ensuring Healthy Homes compliance, preparing for and attending Tenancy Tribunal if needed, and managing the end-of-tenancy process including bond returns.
Most property managers charge between 7% and 10% of the weekly rent plus GST. On a property renting for $600 per week, that works out to roughly $48-69 per week (including GST) or around $2,500-3,600 per year. Some managers charge additional fees for letting (finding new tenants), typically around one to two weeks' rent, plus inspection fees and other administrative charges.
Before signing with any manager, get a full breakdown of their fee structure. The headline management percentage does not tell the whole story.
The True Cost of Self-Management
Managing a property yourself eliminates those management fees, but it is not free. Your time has value, and self-management requires more of it than many new landlords expect.
You will need to advertise the property and conduct viewings, screen tenants and check references, prepare and sign tenancy agreements, conduct regular inspections and document them properly, respond to maintenance requests and coordinate tradespeople, chase rent if tenants fall behind, stay across changing tenancy law and Healthy Homes requirements, and handle disputes and potentially attend Tribunal hearings.
A well-running tenancy might only require a few hours per month. But finding new tenants can consume entire weekends. Dealing with a problem tenant or major maintenance issue can take over your life for weeks. The time commitment is unpredictable.
You also need to factor in the cost of getting things wrong. A self-managing landlord who does not understand their legal obligations can face Tribunal penalties of thousands of dollars. Mistakes in tenant selection can lead to months of unpaid rent and property damage.
When Self-Management Makes Sense
Managing your own property works well in certain circumstances.
If you only have one or two properties, the time commitment is usually manageable. Many landlords successfully self-manage their first property while learning the ropes. Having your rental property close to where you live makes a significant difference, particularly when responding to urgent maintenance issues.
Self-management suits people who enjoy the hands-on aspect of property ownership. If you take satisfaction in maintaining property, building relationships with tenants, and handling problems directly, you may find property management rewarding rather than burdensome.
A background in trades, building, or property can help immensely. Understanding what maintenance is reasonable, what repairs should cost, and how to assess property condition makes you better equipped to manage effectively.
Finally, cashflow sensitivity matters. On a marginally cashflow-positive property, the 8-10% management fee might be the difference between positive and negative returns. Doing it yourself preserves more of your rental income.
When a Property Manager Makes Sense
Professional management becomes more valuable as circumstances change.
Once you own multiple investment properties, the time demands of self-management multiply. Many investors find that somewhere between two and four properties, the accumulated management tasks become unsustainable alongside full-time work and family life.
Distance creates obvious challenges. If your rental is in another city, attending viewings, inspections, and emergency callouts becomes impractical. A local property manager with established tradesperson networks can respond faster and more cost-effectively than you can from afar.
If you travel frequently for work or simply value your weekends, paying for management buys back significant time. Many landlords find the fee worthwhile simply to avoid the mental load of being on call for tenant issues.
Property managers also add value in tenant selection. Experienced managers have seen thousands of applications and can often spot warning signs that inexperienced landlords miss. A bad tenant can cost far more than years of management fees.
Finally, if you find property management stressful or simply do not enjoy it, that is reason enough to outsource it. Investing should build wealth without making you miserable.
Questions to Ask a Property Manager
If you decide to use professional management, interview several companies before choosing. Ask how many properties they manage per staff member - if it is more than 100-120, response times may suffer. Find out their process for tenant selection and what checks they conduct. Ask how they handle maintenance requests and whether they have preferred tradespeople or get multiple quotes.
Understand their communication style. How will they keep you informed about your property? What reports will you receive and how often? Ask about their experience with Tenancy Tribunal and how many hearings they have attended in the past year.
Request a full fee schedule in writing, including any additional charges beyond the headline management percentage. And ask for references from other landlords they manage properties for.
The Hybrid Approach
Some landlords take a middle path. They might use a property manager for tenant finding (letting) but self-manage once a good tenant is in place. This captures the value of professional tenant screening while reducing ongoing costs.
Others self-manage for years, then switch to professional management when their portfolio grows or life circumstances change. There is no rule saying you must stick with one approach forever.
Making Your Decision
The management question ultimately comes down to three factors: your available time, your proximity to the property, and whether you enjoy the hands-on aspects of landlording.
If you have the time and inclination, self-management for your first property is a valuable learning experience. You will understand your investment more deeply and appreciate what property managers do - useful knowledge even if you later choose to outsource.
If time is scarce, distance is a factor, or you simply want the peace of mind that comes from professional management, the 8-10% fee is often money well spent. A good property manager earns their fee through better tenant selection, faster vacancy filling, and fewer costly mistakes.
Whatever you choose, the important thing is making a conscious decision rather than drifting into self-management by default. Know what you are taking on, and be honest about whether you can sustain it long-term.
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