Sydney-based investor David Conroy decided to self-manage his property when agency fees threatened to derail his budget – but the property is in Perth and he'd never leased a property before. How did he make it work?
It all started at the age of 21 when my brother took me to Perth. My brother has a passion for property, and he wanted to share his wisdom with me. My first purchase was an off-the-plan one-bedroom unit in Northbridge, Western Australia.
As the property was getting close to completion, I knew my budget was going to be tight. I decided to call the real-estate agents in the local area, and tried to get a good price for property management to lease out my unit. I was getting quotes back then for 10-12% just to look after my unit, and an additional one to two weeks’ rent after they found me a new tenant. I had previously factored in letting rates at 7%: however, I was soon realised that WA property management costs were a lot higher then NSW.
I knew I had to come up with a way to cut my costs down. The only thing to do was to manage my own property. Four weeks later, my first property advert was online with Domain. As soon as the property was completed, I flew to Western Australia and slept in a sleeping bag on the floor of my unit. The next day, I got up early to clean, and make sure that it was well presented.
I had already arranged appointments with some potential tenants. There I was, standing in front of my door, waiting for my first property inspection. I was nervous and excited, as I did not know what to expect. I had 3 bookings – one at 9am, 10am and 11am.
The first scheduled booking didn’t turn up.
The second was one got lost and couldn’t find the place.
The last one cancelled.
I thought to myself that I could not go home without finding a tenant. I had already paid around $200 on a Domain advert and $600 on return flights. I was getting stressed, thinking that maybe I should have listened to the real estate agents when they told me that it wasn’t easy. After standing in front of my unit, waiting patiently for potential tenants, I decided to go downstairs and sit next to the pool and have a drink.
While I was sitting next to my pool trying to cool down, I started to re-think my strategy. I got a phone call from a real estate agent asking me if I would like his help. He said to me that a lot of people think it’s easy to lease the unit and that people always try, and when they come back to senses, they go back to him. He said that someone young like me, with no experience, would find it hard to lease the property.
That made me angry, as he essentially was laughing at me, saying, “I told you so”. I said to him I will lease this property myself.
The unit complex had around 150 units for lease, and as it was the first week since completion, I noticed there were a lot of real estate agents showing units. So I decided to go to each showing, to see the completion and to ‘steal’ potential tenants.
My selling point was to the was, “If you like the unit, I will sign you up on the Monday after I complete your reference checks. You will not have to deal with another annoying real estate agent treating you like a number and not returning your calls.”
I’m glad to say, I leased the property to a young couple that day. They were having problems trying to lease a place as they were young like me, had been together for less than a year, and kept getting knocked back because they had no prior rental history.
Since that experience, I have realised that you can do anything, as long as you are the prepared to think outside the square.
To find out more about the rest of David’s investment journey, see the November issue of Your Investment Property, on sale now!
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