At the end of the day, most investors are renting out their properties to cover their investment mortgages or to increase their personal wealth.
However, a lot of landlords make some fairly common mistakes that end up costing them a lot of money.
At Hutton & Hutton, we believe in keeping our landlords happy, and we know you’re usually happy when you’re in the black! Therefore, we’ve compiled this list of really common mistakes we’ve seen landlords make that end up coming back to bite them and their wallets.
(Credit: Tim Gouw on Unsplash) The following frustrating expenses can be easily avoided!
1. DIY property management or using an inexperienced or overloaded team
We see the logic in thinking you can manage your own property. Cut out the middleman and save yourself a few dollars down the track right?
How much experience do you have in property management though? Are you up to date on all the current legislation and laws in Queensland? Are you complying with due diligence?
Unless you have a property management history, you could be overlooking something small but very important that could land you in a world of legal troubles down the track. Hiring a property manager works out to be cheaper for you in the long-term as they will do everything for you including advertising, lodging lease agreements and bond forms, screening tenants, conducting inspections, chasing rent, organising repairs, and even paying bills on your behalf. It’s a small price to pay for a job well done!
On the other side of the coin, you have landlords who hand their properties over to inexperienced or overloaded agents. Inexperience will see you getting into similar strife we mentioned earlier with legal ramifications. However, an overloaded agent is also dangerous. These agents often have hundreds, if not thousands, of properties in their rent roll all at once. You’ll be nothing but a number to them, and you won’t even be a number they’ll remember! If they make an error, it will be harder for them to find the time to amend it and pay attention to your property, meaning you’ll be haemorrhaging money.
At H & H, we believe in quality over quantity. Our lease listings are smaller so we can pay undivided attention to you. Trust us, experience and attention to detail save money!
(Credit: Pixabay on Pixabay) Overloaded property managers are drowning in work
2. ‘Cutting costs’ isn’t really saving you long-term
Speaking of attention to detail, tenants notice the little things. You think that going cheap by passing on the stainless steel appliances will save you money, you’re right. It will in the short-term. However, tenants will actually pay more for ‘luxury items’ and you could be missing an opportunity to ask for a bit more rent. That appliance will pay for itself!
Another common appliance landlords overlook is the humble air conditioner. We don’t realise how much we appreciate it until we’re stuck in a Queenslander in the middle of a 40 degree January afternoon. Tenants are willing to pay more for comfort! So pay that little bit of money now and save yourself tons down the track.
(Credit: Oleg Koval on Unsplash) Air conditioning units will pay for themselves later!
3. Not getting landlord insurance
Landlord insurance is crucial. Yes, it’s an initial outlay, but you’re really better to be safe than sorry. After all, are you a strong enough financial position to cover yourself for prolonged periods of vacancy? What if your tenants are in arrears? Or if upon exit you find there is malicious property damage?
It may seem expensive when you initially outlay the money, however, if and when the worst happens you will be thanking yourself for having the foresight. Not to mention, your bank account will be much, much happier.
(Credit: Cytonn Photography on Pexels) Good insurance is worth it, trust us!
4. Pricing a property above market value
Even if your family lived in your property for 20 years before you converted it into a rental, your property is your investment and your business. Therefore, you need to treat it as such and this is important when selecting an amount to ask for rent. Although you may think no number is high enough, we can promise you there is such a thing as asking too much.
At H & H, we take appraisals very seriously and we want to get you the best price we possibly can for your investment. To do this, we conduct thorough market research and we get to know every aspect of your property. After we feel like we know your property as well as we do our own, we then get an understanding of your ideal tenant. We learn who they are, where they work, what they look for in a rental, and how much they earn. From there, we can give you a recommendation with certainty that we’ve covered all our bases.
(Credit: Brisbane Local Marketing on Unsplash) We know Brisbane well so your appraisal will be accurate
5. Discriminating against potential tenants
This is an important and ongoing issue in Australia. Potential dream tenants (that is long-term, respectful, cooperative tenants) are being overlooked due to factors such as race, gender, sexuality, age, and religion.
H & H know that’s entirely unacceptable. A good tenant is a good tenant regardless.
That’s why we only look at the details that truly matter in selecting and screening potential tenants. These factors are income, rental history, and suitability for your property.
When people submit applications with H & H, they can be assured they will be treated with the utmost respect and consideration, and you can be sure when we forward on an application that we think they are the perfect tenant for you.
(Credit: PhotoMIX Ltd on Pexels) We want your property leased as quickly as possible, so discriminating on superficial reasons makes no sense to us at all