What Does it Mean to Rent Out My Own Property?
Thinking of renting out your property? Read these facts first.
What does it really mean to rent out your own property?
Renting out a property is so misunderstood (sometimes even by professionals in the industry) that there is a desperate need for an answer to the question - What does it really mean to rent out my own property?
Outside of real estate there are few professions that cause people to have such an extreme reaction. Everyone has an opinion on how you should do it but let's dive in to some of the stats and history on the topic.
A short history of a highly charged topic
Part of the great Australian dream is owning your own property and the roof over your head. And Australians are pretty good at it.
For the better part of the last 50 years, about 70% of occupied private dwellings have been owned by their occupants. That means a lot of us own property – mums, dads, professionals, tradies, and everyone in between.
We are a lucky country in that so many people participate in home and property ownership, and we are even luckier that immigration and foreign investment into the property market have driven up prices over time.
As a result of the high participation rate, a lot of people interact with agents (and their fee structures) on a regular basis. Whilst engagement is a good thing in any business or industry, it also forces a question about the value delivered for the cost incurred.
The negative perception of Real Estate Agents
In the 2021 Roy Morgan Image of Professions Survey, Real Estate Agents once again scored near the bottom of the pack. In fact over the past 20 years of survey results, they have not scored higher than a 12 (nurses scored 88).
To be fair to agents, there are a lot of them - a recent IBIS report suggests 110k people employed in Real Estate across 40k businesses – that is a lot of people businesses – that is a lot of people to judge with one survey score.
But one thing the survey does tell us, is that the general perception and image of agents is fairly low when compared to other professions. Uber, AirBnB, Carsales.com.au, Expedia and other online businesses are good examples of what can happen in an industry when consumers are not happy.
What can we learn from a Marketing Guru?
Not to get too academic, but we wanted to introduce some concepts from Philip Kotler as a way to potentially explain some of the negative perceptions associated with agents.
You may not have heard of him, but he is a marketing guru. One of the many ideas credited to him, is using both price and value as a way of deciding whether you are meeting your objectives and if perception is reality.
Originally there were 9 different boxes, but we adapted this slightly to make it easier to work with.
The four boxes are combinations of whether you pay a high price or a low price, and feel you get a lot of value or a little value for what you pay. As you can see, when you pay a high price for little value you fall squarely in the rip-off category, but when you pay a low price and get a lot of value, you are onto a winner.
We speak to a lot of property owners and receive feedback on where they believe they fit in this diagram over the last 10-20 years. They are now taking steps to change this to move to a ‘winner’ for good!
So let’s get back to the original question - What exactly does it mean to rent out your property?
The short answer is it is not a mystery. It requires a little bit of effort mixed with a little bit of know-how, which is exactly why we produced this guide.
As with anything, the first time you try something new it can seem daunting but here are the 3 main points you should take away from this before renting out your property.
Know Your Market
- A lot of Australians own property and interact with agents.
- ~70% of occupied private dwellings have been owned by their occupants in the last 50 years.
- Outstanding question about the value delivered for the cost incurred.
Learn the Facts
The general perception and image of agents is fairly low when compared to other professions.
If the facts tell you that there is general dissatisfaction in dealing with agents, it might be time to consider proceeding with finding and managing tenants without using an agent.
Price and Value
- Familiarise yourself with the price/value table.
- Think about what really matters to you.
- Be sure to take steps to. move to a 'winner' for good.
- What exactly does it mean to rent out your property?
Download the Self-Management eBook.
Want to understand how to rent out and self-manage your property? Start here - Your step-by-step guide to renting out your own property will include:
- How to rent out your property - Six simple steps from advertising your property through to signing a lease and managing rental payments.
- How to start your lease - State-by-state guide for setting up you lease, collecting bond, conducting a condition report & more.
- Inspection checklist - Everything you need to do to organise and manage inspections.
- What to do if a tenant doesn’t pay? - What to do next and which state-based laws apply.
- How to advertise your property - What to include in your property ad to make it stand out.
- How to select a tenant - What questions to ask and background checks to make.
- How to collect rent - Payment schedules, rental ledgers, receipts & more.
