A Few Pointers for Private Landlords
Alright, we all know how difficult it is to stay on top of everything, especially when life is coming at you from all angles. But, let us take a step back and analyse the most common mistakes we make when managing rental properties. These mistakes more often than not can transcend into an ungodly cost for landlords; what started out as an easy fix spirals into another problem and another.
This week, we take a closer look at what mistakes you can prevent, helping you avoid unnecessary expenses and improve the cash-flow in your greatest investment – property.
This is a big one amongst rentals that weren’t state of the art to begin with, as a landlord, you hope tenants will look after your property and keep it in good condition. Sometimes, you buy a rental property with high intentions of improvements and over time you tend to forget or ignore the simple things. We must acknowledge that wear and tear does happen over time, especially if you’ve invested in an older property (or you’ve got a few rough tenants). If we ignore the initial issue we tend to find that further damage is usually inevitable. So, what happens? This causes a knock on effect with our tenants, who are now frustrated, what’s worse; An even larger bill than we thought – that leak in the roof? Yeah, that’s now come through and has damaged the ceiling. Obviously, we all know that its significantly cheaper to replace a roof, than it is to replace the roof AND pay for the extensive water damage throughout the property from the ongoing leaking.
Let us not forget that landlords can even be fined up to $4000 for failing to meet their obligations in respect to maintenance, smoke alarms or insulation under Section 45 (1A) – take it from us, you’ll want to avoid this one.
Let’s look at FACTS; when it comes down to it, you’re letting strangers live in your investment property. Before they move in, what would you assume would be the most crucial stage? Reference checking! Then, why does it seem to be the process most skipped by private landlords. Finding great tenants is essential to your property being well looked after (reducing maintenance costs), ensuring rent is paid on time with no rent arrears occurring, and finding people who will be easy to work with when it comes to maintenance and property inspections.
With the Quinovic Wellington Team, we interview each of our tenants at property viewings, our showings team make recommendations of people who have shown interest in the property. We then immediately conduct triple reference checks and work credit checks on the applicants to ensure they have good character, a positive financial history, and have had no issues with previous landlords.
Bookkeeping is essential! Any novice business man could tell you that. So, you’d never run a business without at least one spreadsheet, the same should be with your property portfolio. Being relaxed about admin can lead to big expenses and losses that could have been foreseen if you had a spreadsheet. Maintaining an updated spreadsheet allows you to identify rent arrears, keep track of expenses, follow the property’s success as a rental, and know when you can next adjust the property’s rent. Our systems take care of admin from checking rents received to recording maintenance costs and documenting inspections.
When do you draw the line, well, let’s see. Repairs are expected and necessary in investment properties., it’s a way of life. However sometimes people expect more, and demand what most would consider as luxuries. When the line has been overstepped, a good approach is simply contacting the tenant and politely explaining the situation. Most tenants will be considerate of your perspective, some might even know they’re asking for more than is reasonable.
In a market where rents are rising, and where rents can only be increased every 6 months, naturally a large percentage of tenants will be paying less than the current market rent. As we’ve discussed previously, rent can be increased every 180 days, enabling landlords to once again be able to achieve the best rent from their property in the current market. At Quinovic Wellington Property Management Specialists, we conduct a rent review on all properties every 6 months to ensure our owners are receiving the best rent in the current market – something that a private landlord may tend to forget as time goes on.
Expenses happen, but there will always be a way to minimise them. None of our tips are huge or difficult to follow, yet together they can significantly reduce your expenses, creating better cash-flow and a more successful investment. A constant and disciplined attention to detail ensures the best outcomes.