5 Common Mistakes Property Investors Make
We all know that mistakes are a fact of life but some mistakes are much more costly than others.
As a Property Investor, a mistake made by you or your Property Manager could mean time and money spent chasing tenants, appeasing clients or even facing a lawsuit.
To save yourself from these headaches, be sure to avoid these 5 Property Management tips.
1. Not attending to repairs
As a Landlord, you hope that your Tenants will look after your property and treat it as if it were their own. But wear and tear does happen. When repairs are not attended to early, further damage inevitably occurs, creating frustrated tenants and possibly a bigger repair bill. Keep in mind that the tenants can seek a rent reduction if there is a loss of amenity or service to the property, and even seek further compensation – which costs the Landlord more money, than just the initial repair itself.
2. Being too trusting
When it comes down to it, you are letting strangers live in your investment property. Yet reference checking seems to be the process most skipped by private Landlords. Finding great tenants is essential to your property being well looked after (reducing maintenance costs).
If you have a Property Manager in place, do you know who they are – they are looking after your rights as a Landlord and managing your most valuable asset. You need a Property Manager to be proactive and not reactive. You need a Property Manager to be knowledgeable, thorough and meticulous.
We often hear from Landlords who have joined our team say, “I assumed the Property Manager…” or “I haven’t heard from the Property Manager in awhile….” or “I am not sure who is my Property Manager”
A good Property Manager gives you regular communication all the time.
3. Lack of rental knowledge
Some private Landlords do not realize, that they have the same legislation to abide by, as properties managed by a Property Manager. Tenancy legislation is a complex and specialized, there are certain rules and timeframes that need to be adhered to ensure you as meeting all your legal obligations.
4. Charging too much or too less
Undervaluing your property can cost you a lot of money, but so can charging too much. It is important for landlords to do their homework on the market value – e.g. if the average rent for similar properties is $400 per week, you will have a difficult time trying to find a tenant who is willing pay $500 a week, which means your property will remain vacant for longer than it should – costing you money.
5. Not having the right insurance
Standard home insurance is not designed for rental properties. Landlords will need to take out Landlords insurance that cover tenant related risks including loss of rental income, damage or loss caused by the tenant to your building and contents, and you need to ensure you have public liability cover, incase a tenant makes a claim against you for an accident they may have at the property.
Expenses happen, but there will always be a way to minimise them. The above mentioned is easy to follow and all 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 Landlord the best outcome.
All these mistakes can be avoided and remedied. While its easy to stick to what you are comfortable with. Its important to embrace change and learn from mistakes – Nothing Changes if Nothing Changes.