Legal risks and liabilities: the real cost of self-managing your property

Are you considering self-managing your property portfolio?

The decision to do so may prove significantly more costly than you think.

It’s not uncommon for novice investors to consider managing their own portfolios, particularly if they only own 1 or 2 properties.June 2013 Property Investment prices

However, by taking on the responsibility to self-manage, you’re also likely to be taking on more risk, not only financially, but legally as well.

So what are the risks if you decide to forego professional property management?

Firstly, and perhaps most importantly, self-managing landlords are susceptible to legal action if they don’t fully understand the legal requirements for leasing a property.

This can include the requirements for installing smoke alarms or ensuring minimum security obligations, among many other issues.

Furthermore, self-managing landlords may also be vulnerable if they don’t understand their own rights and the rights of the tenant.

It’s not uncommon to hear stories of tenants who stop paying their rent or who’ve trashed their rental property.

In such circumstances a professional property manager will mitigate the risk of this occurring by compressively screening applicants and understanding the legal recourses should such incidents occur. 

Self-managing landlords who haven’t followed proper procedures may find that their landlord insurance company either discounts or refuses to pay a claim.

Should the need arise to go to court, a good property manager is able to act on the owners behalf, will know how to adequately prepare for a hearing and have supporting evidence and information to back up their case.

It’s important to remember, also, that the cost of hiring a property manager is tax deductable, so any perceived savings from self-managing are likely to be negligible.

Subsequently, the real savings made from self-managing don’t outweigh the benefits of engaging a professional property manager.

Want more of this type of information?

Damian Collins


Damian is managing director of Momentum Wealth, a Perth based property investment consultancy firm. A successful property investor in his own right, Damian formed Momentum Wealth to assist time poor investors in building their portfolios and applies his many years of experience to help clients accelerate their wealth creation. Visit

'Legal risks and liabilities: the real cost of self-managing your property' have 2 comments

  1. May 14, 2016 @ 9:18 am vincent tomazin

    i have managed all my properties since i bought my first one in 1980, except for a short period of time where an agent was managing it. after a month I took the property back to manage it myself. I have also done repairs, were I can and without breaking the law. I estimate i have saved over 100-150k over the 35 years and 6 properties I rent. Even in the current rental market in perth, one property was only vacant for 2 days before i found a new tenant about a month ago. I have had my ups and downs, but overall, im glad i manage them myself. One advantage is the rent goes into your account every week or fortnight, as opposed to after eom. You need to keep uptodate with legislation and not be afraid to talk to your tenants.


    • May 14, 2016 @ 4:53 pm Michael Yardney

      Well done Vincent
      Clearly self management has worked for you, but I agree with Damian – in general it’s not a smart idea. I’ve seen so many investors get themselves into trouble managing their own properties


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