One in two property investors hand over full control of portfolio to property managers: survey

Half of all property investors hand over the entire management of their rental properties to an estate agent, according to a survey by consultants BDRC Jones Donald.

The landlords are better informed and have more profitable investments as a result, the survey concluded. 

Overall, more than three-quarters (77%) of landlords involve a property manager in some aspect of their rental portfolio and tenant management with less a quarter self-managing their investments and tenants.

Around 12% of landlords surveyed said they used a property manager just to collect the rent.

On average, landlords that use a property manager are better informed of the return they are getting from their investments than those that self-manage their investments - though in both cases a high proportion of property investors have no idea of the rental yield their properties are achieving.

Just less than a third (32%) of the landlords surveyed that said they did use a property manager said they were unaware of the rental yield on their investment, compared with 40% of landlords that self-manage their rental properties.

The survey also suggests that landlords that use a property manager are better off financially, finding that a higher proportion (51%) of property investors that use a professional property manager achieve a positive yield on their investments compared with 36% of self-managing investors who achieve a positive yield.

In addition, property investors that use a professional property manager are more likely to earn a positive cash flow stream from their investments.

“The Australian Private Property Investor Study found that the majority of private investors rely on the professional advice and support of real estate agents to maximise their investment returns,” says BDRC Jones Donald managing director, Dr Roger Donbavand.

“When you consider that Australian investors have seen five changes to the official cash rate in the last two years and the poorest super returns since 2007, it’s no wonder landlords are reaching out to professionals to ensure investment success,” he says.

One in four of the 500 landlords surveyed by BDRC Jones Donald plan to increase their rent over the next six months, with almost half of those surveyed noticing an increase in tenant demand and an increase in rents in other rental properties in their market.

The full report can be purchased from BDRC Jones Donald.