7 Mistakes Landlords Make by MPM Property

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 seven property management mistakes:

1NOT ATTENDING TO REPAIRS As landlord, you hope tenants will look after your property and keep it in good condition. But wear and tear does happen over time, especially if you’ve invested in an older property. When repairs aren’t attended to early further damage inevitably occurs, creating frustrated tenants and a bigger bill. Also be mindful that tenants can seek rent reduction as per section 94 of the RTRA Act if there is a loss of an amenity or service at the property. The tenant may also seek compensation from the lessor due to breach of an agreement as per section 419, 420 and 421.

2 BEING TOO TRUSTING

When it comes down to it, you’re 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), 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.

After interviewing tenants at property viewings, our dedicated Property Managers make recommendations of people who have shown interest in the property. We then check reference checks and credit checks for the applicants to ensure they have good character, a positive financial history, and have had no issues with previous landlords.

3 CHARGING TOO MUCH

Undervaluing your rental properties can cost you a lot of money, but so can charging too much. It's important for landlords to research rates in their neighbourhoods to make sure they keep their prices competitive.

If the median rent in an area is $400 per week, then you'll have a difficult time finding a tenant willing to spend $500 for your investment property.

In the long run, asking for too much is just as damaging as asking for too little.

Strike a balance so you can keep your properties full while earning a good return on your investment.

4

NOT EMPLOYING A GOOD MANAGING AGENT Many landlords employ bad managing agents or don’t use one at all, which is particularly inadvisable when managing a property from interstate. “It is a business and properties need to be looked after and problems sorted out quickly,” A good managing agent will deal with problems, carry out regular inspections and ensure the landlord’s legal obligations are complied with. “They will also know when to serve the right notices and how to do so, a mistake that rookie landlords often make.”

5 NOT HAVING THE RIGHT INSURANCE Standard home insurance is not designed for rental properties.

Landlords will need to take out a landlords insurance policy that includes public liability cover, in case a tenant makes a claim against them for an accident they have in the property. Landlords insurance covers you for tenant-related risks including loss of rental income, and loss or damage by tenants to your building and contents.

3 CHARGING TOO MUCH

Undervaluing your rental properties can cost you a lot of money, but so can charging too much. It's important for landlords to research rates in their neighbourhoods to make sure they keep their prices competitive.

If the median rent in an area is $400 per week, then you'll have a difficult time finding a tenant willing to spend $500 for your investment property.

In the long run, asking for too much is just as damaging as asking for too little.

Strike a balance so you can keep your properties full while earning a good return on your investment.

6 FORGETTING LOCATION, LOCATION, LOCATION When the balancing act between supply and demand swings in favour of tenants, they will always opt for the property in the best location.

“Somewhere that appeals to a range of tenants – commuters, students, young professionals – is the best option to ensure minimal void periods and maximum letting potential.

7

POOR PRESENTATION AND POOR FURNITURE All sorts of people rent these days – some as a lifestyle choice, others because they can’t afford to buy – and many will be renting long-term. They want a property that feels like a home, not a stopgap, so if the property looks like a throwback to their student days, they will either treat it badly or find a better one. “Good photos stand the test of time and show off the property better,”

FINAL THOUGHTS 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.

All in all, these property management mistakes can be avoided and remedied. While it’s easy to stick to what you’re comfortable with, it’s important to embrace change and learn from mistakes.

If you enjoyed this report and you’d like any more help with property management, please don’t hesitate to contact us for help.