Common mistakes property investors make
Making the move to expand your investment portfolio and lease a property can be a daunting decision – sometimes it feels like venturing into the unknown. Before making the commitment and accepting your first tenants, it’s a good idea to get an understanding of what being a landlord is really like.
We’ve compiled some of the issues we see causing upsets for new property owners – knowing these means you have realistic expectations about the renting process and aren’t likely to be disappointed.
General ‘wear and tear’
‘Wear and tear’ is what we call the allowance of some small bumps, stains or scratches to the property – like paintwork, woodwork or carpets. Small and gradual damage like this is pretty much unavoidable, and will require the odd bit of maintenance or touching up in between tenancies. We normally recommend property owners allow for carpet and flooring to be replaced every 10 years and paintwork every five years, which is important to factor into your budgeting.
The rent arrears process
If your tenant doesn’t pay their rent on the day agreed in their rental agreement, they become in arrears. It’s a good idea to get in touch with your tenant as soon as possible and discuss why they haven’t paid their rent, and how the problem might be resolved. We are a believer in the zero tolerance approach – strong and early intervention should mean that rent arrears don’t get out of hand. However, despite the best efforts, a tenant still may not pay and the situation heads towards eviction. This can be an incredibly frustrating and draining experience. Often, the rent left owing has exhausted the bond, and clean-up and re-letting expenses on top of that can result in a substantial financial loss.
We recommend quality landlord insurance to all of our landlords in case the worst happens. Having insurance means you are covered if your tenant is evicted and you will still receive the rent that is owing. Landlord insurance can also cover certain repairs that are needed on your property. Once you’ve set up a meeting with a property manager, speak to them about choosing the best insurance policy that will work for you.
Repairs and maintenance
If something in your property needs repairs or maintenance, it must be dealt with within a reasonable timeframe. If whatever is at fault can’t be repaired, it has to be replaced. Property owners can sometimes be taken by surprise by unexpected maintenance costs that they haven’t budgeted for, so it’s always important to have a well informed and up to date budget for all your properties. Have a look at our previous blog to learn more about budgeting for rental property maintenance.
With the threat of action by a tribunal and the compensation that can be awarded to a tenant if a repair isn’t dealt with, it is often cheaper and easier to quickly allow for repairs to happen. We look after this for our owners to avoid any unnecessary stress, and we normally recommend establishing a limit that can be authorised by us to get repairs sorted quickly. We’ll only contact you then if an expense is likely to exceed your limit, so we can get your opinion on the problem.
We’re always up for a chat, so whether you think your expectations of the ownership journey have you ready to rent, or if you still want some more clarification, get in touch. We’ll match you with one of our experienced property managers who can give you tailored advice for your property and help you to get your rental experience started.