If you’re a landlord or looking to become one after purchasing a rental property, there are many different aspects of the process that you need to pay attention to. New landlords often make mistakes that can end up being incredibly costly. To help get you started with your property management, we’ll cover some of the most common mistakes that new landlords make.
Getting the wrong property
If you’re investing in real estate, your main goal is to create a long-term profitable venture. Buying the right property is the most important step in this process. The way real estate works can be deceiving, and many new Australian landlords invest in the wrong property and end up losing money over time.
You can rationalise it by thinking that the value will go up and lead to higher profits, but this isn’t always the case. If you need to put in a lot of effort just to make the numbers work, it might be time to consider another property.
Upgrading unnecessarily
Upgrading your property is a great way to increase value and comfort for tenants. However, you shouldn’t get too excited when it comes to making changes. Plenty of new landlords go overboard with the upgrades, which can end up costing them in the long run.
Rent prices are determined mostly by square footage and local market conditions. Upgrades can cost you a pretty penny, and they may not always be worth the trouble.
Not checking on tenants
You should check up on your tenants every once in a while. If they’re on time with all of their payments, you might be tempted to just collect the money and leave them alone for long periods. While there may not be any reason to check up on them, it can give you crucial information about the state of the property, as well as any repairs that might be necessary.
Nobody likes to spend time and money on repairs, but taking care of issues early can help you avoid future issues that may be more expensive.
Working alone
Being a landlord can be pretty simple, but it can also get quite complicated. This is especially true if you manage multiple properties, or if you own strata properties. Keeping track of multiple tenants and the many different rules surrounding specific types of properties can be exhausting.
Doing everything alone could end up costing you lots of time and money in the long run. This is why it can be beneficial to seek out professional help. Most strata owners in Australia turn to strata management in Northern Beaches to more easily deal with their properties and better follow local by-laws. You can use experienced property managers to deal with various day-to-day management tasks and increase your profits by quite a bit.
Avoiding leases
Leases are crucial documents for both tenants and landlords. You want to make sure that you’re getting a favourable deal, and that you don’t have to search for a tenant right after making a deal. The default rules that you must follow if there’s no lease are set by the local state laws. In most cases, tenancy becomes a month-to-month deal, so the tenant may leave with a month’s notice.
Create a lease with terms and conditions that suit you, and you won’t have to worry about searching for tenants frequently. At the same time, you’ll have a stable relationship with your tenants if they agree with the terms of the lease.
Conclusion
New landlords can find it difficult to adapt to the many responsibilities that come with their investment properties. Because of this, getting familiar with the best landlord practices can help you make good decisions as you enter the business. Consider some of the aforementioned mistakes we’ve mentioned and try to avoid them.