Managing your own investment property might seem like a great way to save money, but it comes with serious risks. From the lack of understanding of the legal requirements to financial losses, self-managing can turn into a full-time job—one that many investment owners aren’t prepared for.
From compliance issues to unexpected expenses, self-management comes with hidden risks that can quickly turn an investment into a liability. Before you take it on yourself, consider these key risks:
✔ The legislation is complex – Failing to meet the legal requirements could result in significant penalties and compensation payable.
✔ Finding the right renter isn’t easy – Without proper screening, you could end up with unpaid rent or damage to the property.
✔ Disputes and evictions are stressful – A legal technicality could drag an eviction out for months.
✔ Managing repairs can be time consuming – Are you prepared to spend time managing maintenance.
✔ It often costs more in the long run – The lack of access to industry platforms and tools can lead to costly mistakes that include extended vacancies, unpaid rent, and unexpected maintenance expenses.
If you’re considering self-managing, it’s important to weigh up the risks. Let’s break down what can go wrong and how to avoid a costly mistake.
1. Understanding the Complex Legislation
Victoria’s tenancy laws are strict and constantly evolving. Missing a key obligation—such as failing to lodge a bond correctly or not addressing urgent repairs—could result in financial penalties. Even something as simple as entering the property without proper notice can land you in legal trouble. Without in-depth knowledge of tenancy regulations, self-managing owners risk non-compliance, disputes, and again, financial penalties.
💡 Solution: Stay updated on tenancy laws or engage a property manager who understands the legal landscape.
2. Choosing the Wrong Renter
A thorough screening process is crucial to avoid unreliable renters. Without access to background checks, rental history databases, and tenant ledgers, you could unknowingly approve a renter with a history of unpaid rent or property damage. A undesirable renter can mean months of stress, costly repairs, and legal proceedings to regain control of your property.
💡 Solution: Conduct rigorous screening of the applicant or let a property manager handle it for you.
3. Handling Rent Disputes & Evictions
Disputes and evictions require strict adherence to legal processes. In Victoria, incorrectly issuing a notice or mishandling an eviction could delay proceedings for at worst, your matter is stuck out due to a technicality. Attending a VCAT hearing unprepared can result in an unfavourable outcome, leaving you financially vulnerable. Self-managing owners often underestimate the complexity and stress involved in resolving tenancy disputes.
💡 Solution: A property manager is equipped to handle disputes, issue proper notices, and represent you at VCAT if needed.
4. The Emotional Toll of Self-Management
Property management is more than just paperwork—it can be emotionally exhausting. Chasing rent, managing maintenance, and resolving disputes take time and patience. It’s easy to become personally involved, making it harder to enforce rules and maintain professional boundaries. Many owners find self-management takes a significant mental toll, adding stress to an already busy life.
💡 Solution: A professional property manager gives you back your time, keeping your investment stress-free.
Final Thoughts: Is Self-Management Really Worth It?
For some owners, self-management works—but for many, the risks outweigh the rewards. From complex legislation to financial losses, the potential downsides can quickly turn an investment property into a liability.
The good news? You don’t have to do it alone. A skilled property manager can take care of the hard work, A skilled property manager can help safeguard your investment by having access to more reliable renters, to maintain a steady rental income.
If you’re currently self-managing and feeling overwhelmed, it might be time to reconsider. Want to learn more about how a professional property manager can help? Contact Bendigo Real Estate today—we’re here to make your investment experience stress-free and successful.
Disclaimer: This blog post is for informational purposes only and does not constitute tax, financial, or legal advice. Bendigo Real Estate recommends consulting with a qualified property depreciation specialist or tax professional to discuss your specific circumstances. We are not responsible for reliance on this information. Ensure you comply with current Australian tax laws and guidelines by seeking professional advice to maximise tax benefits.
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