TEN COMMON MISTAKES MADE BY LANDLORDS

1. Under rent the property and fail to keep pace with the increasing market.

When interest rates, strata levies and land tax rise, the landlord is left to carry the extra burden. It is only fair and sensible to ensure that the income the property generates is at the market rate and not significantly below.

2. Fail to spend money on minor maintenance that ultimately avoids major works.

When it comes to repairs, a little expenditure today can save a lot tomorrow. Good quality properties attract good quality tenants and vice versa.  A happy tenant is more likely to be a good payer. If the landlord does not look after the property, why should the tenant? Both the landlord and the tenant have a mutual interest in maintaining the standard of the property

3. Attempt to lease a vacant property for a prolonged period at above market price.

Trying to increase the rent by a small amount can add up to a lot if the property sits vacant. Better to have a payer at a fair price than nothing at a dream price.

4. Increase the rent on existing tenants so high that the tenant leaves.

Your rental property is your investment and as such you need to be getting the correct market rent for your property. However if you increase the rent above market rent you may find that your tenant leaves and find your property vacant for an extended period. A stable tenant that looks after the property as if it was their own and pays on time is far more valuable than a sloppy non-payer.

5. Failure to Know About Tax Rulings and Tenancy Legislation

Ensure you seek financial advice before entering the rental market from your accountant.

Ensure you are up to date with the current tenancy legislation as this could end up costing you a fortune if you make a mistake.

6. Failure to take out Landlord Insurance

Your building insurance will not cover you in the unfortunate event that your tenant defaults with their rent or causes any damage to your property. While it is not a legal requirement that you take out a Landlord Insurance Policy, it is strongly recommend that you do so as soon as possible.

 

7. Get emotional about the property and overlook the fact it is an investment.

An investment property should be treated as such. Some landlords treat it as though someone else is living in their home and become too emotional about the property. Consider your investment property as a ‘Bricks & Mortar’ savings account.

8. Don’t check the prospective tenant’s references and history.

People don’t become non-payers overnight, they usually have a history. In the rush to get someone into the property, the prospective tenant’s references and history can be overlooked. It is better to have a vacant property than a non-payer that abuses the property.

9. Too Casual a Landlord/Tenant Relationship
It is in your best interest to always uphold a professional relationship with your tenants to avoid any potential communication issues that may arise. Remember, they are the ones paying the rent. And you want to keep them paying the rent!

10. Not engaging the services of a professional Property Management Company

By engaging the services of a Professional Property Management Company you can take all the hassle out of managing your investment property and make sure you get the most out of your investment.