The requirements for property management can vary depending on the state or territory in which you operate. But generally, yes, a real estate agent’s licence is required for most property management activities.
However, if you’re the owner, you can fully manage a property without a real estate licence. But should you do that, though?
This guide shows you all the ins and outs of property management in Australia and why hiring a reliable property manager can make your life a lot easier.
Real Estate Licence: An Overview
A real estate licence is a credential granted by a governing authority, typically at the state level, that permits individuals to legally engage in real estate transactions.
It serves as evidence that the holder has undergone the necessary education and training to understand the complexities of the real estate market and possesses the required knowledge to represent buyers, sellers, landlords, or tenants in real estate transactions.
The necessity of a real estate licence hinges on the specific laws and regulations of the jurisdiction in which one intends to operate. In most regions, engaging in real estate activities without a valid licence is illegal and can lead to severe penalties, including fines and even criminal charges.
Keep in mind that, despite being needed in most cases, having a real estate licence isn’t the sole requirement in some states.
For example:
- New South Wales (NSW): In NSW, property managers are required to hold a real estate licence or be a registered real estate agent.
- Victoria: Property managers in Victoria must hold a real estate agent’s licence or be employed by a licensed estate agent.
- Queensland: Property managers in Queensland are also required to hold a real estate licence.
- Western Australia (WA): In WA, property managers must be registered with the Department of Mines, Industry Regulation and Safety (DMIRS) and work under the supervision of a licensed real estate agent.
- South Australia (SA), Tasmania, Northern Territory (NT), and Australian Capital Territory (ACT): In these jurisdictions, property management regulations may also require individuals to hold a real estate licence or operate under the supervision of a licensed real estate agent.
Should You Manage Your Real Estate Property by Yourself?
Managing a real estate property independently, while feasible, can present significant challenges. While some individuals may opt for self-management to retain control or reduce costs, it’s essential to recognise the complexities involved in effectively overseeing a property.
Advantages of Managing Your Own Property
Here’s why some property owners prefer to manage them on their own:
1. Direct Control and Reduced Cost
Managing your own property provides direct oversight over every aspect of its operations, giving you the ability to make decisions swiftly and effectively.
By handling management tasks yourself, you can potentially reduce costs associated with hiring a professional property manager.
2. Potentially Better Profit
Self-management offers the opportunity for potentially better profitability, provided you have a solid understanding of the real estate market and property management principles.
Taking an active role in managing your property will allow you to implement strategies to optimise rental income, minimise expenses, and maximise overall profitability.
3. Flexibility
One of the key advantages of managing your own property is the flexibility it affords you in decision-making and scheduling.
Without the constraints of third-party management, you have the freedom to tailor your management approach to align with your personal preferences and priorities.
Whether it’s setting rental rates, negotiating lease terms, or scheduling property maintenance, you have the autonomy to make choices that best suit your needs and goals.
Disadvantages of Managing Your Own Property
The following are the cons of handling your own property without a property management company:
1. Highly Time-consuming
Managing your own property demands a significant investment of time and effort. From advertising vacancies and screening tenants to handling maintenance requests and addressing tenant concerns, the responsibilities can quickly accumulate.
Without the support of a professional property manager, you may find yourself dedicating a substantial portion of your time to property-related tasks, potentially detracting from other personal or professional commitments.
2. Risk of Low Profit
While self-management offers the potential for increased profitability, it also entails the risk of lower profits if not executed effectively.
Inadequate financial management or misjudged investment decisions can result in diminished profitability and hinder the long-term success of your property investment.
3. Requires Extensive Knowledge
Successful property management requires a deep understanding of various disciplines, including real estate law, finance, marketing, and maintenance.
From drafting legally compliant lease agreements to identifying cost-effective maintenance solutions, the ability to make informed decisions hinges on possessing extensive knowledge of the intricacies of property management.
4. Emergency Responses Can Be Daunting
As the sole manager of your property, you are responsible for promptly addressing any emergencies that arise, regardless of the time or day.
Emergencies can occur unexpectedly and require immediate attention, and being on-call 24/7 can be physically and emotionally taxing.
5. Limited Network
Self-management may limit your access to a broader network of industry professionals and resources that can be beneficial for property management.
Additionally, a limited network may restrict your access to valuable insights and opportunities within the real estate market, potentially hindering the growth and profitability of your property portfolio.
Why Should You Hire a Reliable Property Manager?
Hiring a reliable property manager offers numerous advantages and can be a smart investment for property owners looking to streamline operations, maximise profitability, and minimise stress.
Expertise and Experience
Property managers bring extensive knowledge and experience to the table, having dealt with a wide range of property management challenges and scenarios. Their expertise can help optimise property performance and mitigate risks.
Also, property managers can initiate the eviction process if the tenant is violating any of the agreement terms.
Time and Resource Savings
Delegating day-to-day management tasks to a property manager frees up your time and resources, allowing you to focus on other priorities or pursue additional investment opportunities.
With a property manager handling tenant inquiries, maintenance requests, and financial transactions, you can enjoy greater peace of mind and a more balanced lifestyle.
Tenant Screening and Management
Property managers are skilled at screening prospective tenants, conducting background checks, and managing lease agreements.
By ensuring that tenants are reliable and financially stable, property managers help minimise vacancies, reduce turnover, and mitigate the risk of late payments or property damage.
Efficient Maintenance and Repairs
Property managers have established relationships with trusted contractors, vendors, and maintenance professionals.
They can quickly address maintenance issues, coordinate repairs, and ensure that the property remains in optimal condition.
Rent Collection and Financial Management
Property management companies handle rent collection, financial reporting, and budgeting. They can even negotiate the rent with the tenants on behalf of the owners.
Their expertise in financial management ensures timely rent payments, accurate accounting, and transparent communication regarding property finances.
Additionally, property managers can help identify opportunities for cost savings and revenue optimisation.
Legal Compliance and Risk Management
Staying abreast of the always-changing legal regulations and compliance requirements is crucial for property owners.
Property managers possess in-depth knowledge of rental laws, fair housing regulations, and eviction procedures, helping property owners avoid legal pitfalls and minimise liability.
24/7 Emergency Response
Reliable property managers provide round-the-clock emergency response services, ensuring that issues such as maintenance emergencies or tenant crises are addressed promptly and efficiently.
This availability and responsiveness help maintain tenant satisfaction and protect the property’s value.
The Verdict
A real estate licence is almost always mandatory if you’re intending to manage a property that’s not yours. In some states, you might even need more requirements.
Still, while you can manage your own property without a licence, having a dedicated company do it for you can save you a lot of time and stress.