101 Tips For Landlords
1. Remember you are exchanging accommodation for money, Don't get caught up in tearful tenant stories. No rent - no accommodation.
2. A good property manager may cost 1% more (often less than $5 a week), but it's worth every cent when a bad agent may cost you thousands.
3. Be carful of pervious agents' references for tenants. There is a chance they want to move them on. All application should have multiple checkpoints that are cross-referenced.
4. Accompany your agent on at least one inspection. You should see your investment property every year.
5. Have professional pest control completed the first time you rent out a property.
6. Have professional carpet cleaning completed the first time you rent out a property.
7. Smoke alarms are required by law. Use a smoke alarm contractor to ensure you meet the current legislation. If there is a fire, you will be forever thankful you did.
8. Make sure you have landlord protection insurance.
9. Allow for two weeks of vacancy per year when doing the numbers on a potential property.
10. Price your property to the market and get the pick of the tenants. Although it may seem counterintuitive, it's usually true that a cheaper rent attracts a better tenant. Over price it and you attract tenants rejected by others.
11. Havae your agent use a professional photography, it's usually as little as $100 and worth every cent.
12. Do regular maintenance. A well-kept property costs less in the long run.
13. Professionally clean your investment property for the initial lease. Future tenants are obligated to return it in the same condition upon exit.
14. Pets or not pets? Many families have a pet. Allowing pets widens your choice of tenants. Have your agent arrange a separate pet agreement.
15. Have your gutter cleaned annually.
16. Pick an agent who promptly returnes your calls/emails. A same-day call-back is a minimum standard to expect.
17. Remember people judge properties the same as they judge people. First impressions count.
18. After purchasing a new investment, allow surplus funds for go-wrongs, Its amazing how many owners need new hot water systems within months. Houses seem to know they have a new owner!
19. If your property is still vacant after ten days, reduce the rental price. Instant feedback on price is now available due to online marketing.
20. If your property is not renting, reduce the rent by $10 a week. Remember, one vacant week at $400 takes 40 weeks at $390 to make up the loss. A $10 reduction in advertised rent can make a huge difference to potential tenants.
21. Noel Whittaker says, "The golden rule is that you always invest on the strength of the investment alone- any tax benefits that go with it should be regarded as icing on the cake."
22. Remember, the agent works for you, the owner. They should always represent your best interests. After all, you're the one paying them.
23. Focus on the long term when investing in property.
24. When you start investing in property, ensure your will is up to date.
25. Got a good tenant? Then take it easy on rent increases. Long-run returnes are far better with stable long-term tenants looking after your property.
26. If you are selling with a tenant in place, offer them compensation to keep the property neat and tidy and to ensure they allow easy access. Maybe a reduced rent?
27. Have a tax depreciatuib schedule done. This often makes a significant difference to your tax obilgations at the end of the year.
28. Take the time to select the right tenant, not the first tenant.
29. A cheap agent is often a poor agent. Chances are the cheap agency is understaffed. Even with modern technology, understaffed agencies provide poor services to both landlords and tenants.
30. There are lots of property management agencies, just not many good ones.
31. Every cent counts when investing. One of the hidden advantages of an agent is that all expenses and outgoings are automatically recorded for your tax purposes.
32. Remember all the agency's costs are tax deductible.
33. Residential property management is governed by various state government acts and regulations. The benefit of a good agent is that they, not you, are responsible for upholding the law on your behalf.
34. Conducting regular inpsections and documenting the information can alleviate potential problems.
35. Have the goal of positive cash flow, but don't expect to be purchasing a new yacht at year's end. If you keep your expectations in check, you won't be tempted to jack up the rent and push out good tenants.
36. Landlord protection insurance is an absolute must for property investors, providing financial security against the potential risks of leasing, such as damage, rent defaults or theft. Shop around for the best value cover possible and be wary of exclusions. Not all providers cover the same things and you won't want to be left with any nasty surprises at claims time.
37. Employing an experienced property manager who knows the area your property is in intimately, will be for great benefit in the long term. A good property manager will collect the rent, handle maintenace issues and liaise with the tenants on your behalf. Best of all, they will do it all within the parameters of the laws pertaining to rentals and in a professional manner.
38. By handing your asset over to a property manager and paying a small, tax deductible fee for their services, you will ultimately free up your own invaluable time to do what matters most - finding more lucrative rental properties to add to your portfolio.
39. Ensure that your agent has a dedicated property management department.
40. The agency which sold you the investment property is not necessarily the best to manage it - it is wirth actively reviewing your choices in the local ara, rather than just taking the most obvious option.
41. Even if you go to a great deal of effort to select an individual property manager, it's also vital to assess their agency as a whole. Many agencies have high rates of staff turnover but good business systems help ensure consistency regardless of which manager looks after you.
42. The best property managers do more than collect the rent and organise repairs. For example, they can alert you to the benefits offered by depreciation schedules, suggest high-return improvements and make sure you are aware of your options when it comes to landlord protection insurance.
43. Property agencies should be judged on quality not just price. The advantage of a silghtly lower management fee will quickly be eroded if there's an unnecessary vacancy or a badly-prepared tribunal appearance.
44. Consider doing some mystery shopping before deciding on an agency. Inspect the quality of 'for lease' ads and photography, checking how long it takes for calls to be returned and even turn up to an open for inspection.
45. While property managers are on 'your side', they also have a professional duty of care towards tenants and a responsibility to ensure relevant legal rules are followed.
46. Property managers need to be able to negotiate in a firm but peronsable manner with tenants and landlords - so when they say you can't make DIY electrical repairs, for example, don't take it the wrong way!
47. Property management is not an easy job. Think twice before taking on the role yourself - poor quaility tenants often target DIY landlords because they know a professional will screen them out.
48. It's no coincidence that the landlords in tears on current affairs television over their 'trashed house' are almost always managing their property themselves. Even with professional managers, there are no guarantees but, if worst comes to worst, they are better equipped to deal with eviction process.
49. Property managers usually have access to a network of quality, responsive tradesmen. These may not always be the cheapest in town, but have proven their ability to get the job done reliably.
50. If the quote provided really is over the top, take the time to do some research on alternatives - and be polite in raising the matter. Set aside some of the rent you receive so that you can afford repairs.
51. Read your annual rental statements with an eye for what's missing as well as what's there - has money been taken out for pool maintenance, gutter clearing and the like? If not, ask why.
52. Property managers can make your investment journey easier and smoother, but the buck stops with you - it's up to you to carefully select your property manager, resoind to their queries, monitor their performance and practively change managers if necessary.
53. Ensure your agent inspects your property at least two times per year. A lot can happen in a year.
54. Never let keys be handed out to potential tenants. Inspects should always be carried out with agent.
55. Trust imperative with your property manager. Do you instinctively trust yours to do the right thing?
56. Does your property manager undertake training on a regular basis? Are they up to date with all the State Government acts and regulations?
57. Remember the underestimate/ overestimate theory. Always underestimate your income and overestimate your outgoings. Instead of bill shock, you'll get a pleasant surprise when the accounts are done.
58. 'Negative gearing' - careful, there's a clue in the name.
59. When considering selling an investment property, instruct your agent to keep the tenancy on a periodic lease. A fixed term lease may keep the tenant in place but it makes the property much harder to sell.
60. Check your landlord protection insurance includes accidental damage - not just malicious damage.
61.Check your landlord protection insurance includes pet cover - even if the pet was not on the lease.
62. After you have chosen an agent, let them do their job. if you are uncomfortable with that, then you have chosen the wrong agent.
63. Check out the agent's office. Does it seem organised and efficient? Good real estate offices hum, they don't appear hectic.
64. Over the long term, it's nice to have an investment in bricks and mortar.
65. If you select the wrong agent, you may not know it for years. Poor agents don't reveal their true colours until a poor tenant tests them.
66. Tenants get lots of free advice and information. Make sure you also get good advice and information from the agent you are paying.
67. Get everything in writing with your property manager. Email is sufficient.
68. Potential tenants should always be checked on one or both of these tenant databases: TICA and NTD
69. Get a building inspection on every property you purchase. Look for maintenance issues and structural defects.
70. Got a good tenant? Buy them a Christmas hamper and have it delivered. Everyone like to be appreciated.
71. Choose a good agency to manage your property investment, not a good individual. Even good property mamangers shift jobs. If you choose an individual, there is no guarantee they will be looking after your property over the long term. Choose an excellent agency and there will be continuity for you and the tenant.
72. If your agent hides behind the 'email wall', be wary. Good agents call, then email.
73. Make the decision WHEN you want to sell an investment property. Don't leave it until you HAVE to sell.
74. Check your monthly statement carefully. Ask your agent for clarification if needed.
75. If you discover your property manager has lied to you, terminate their services immediately.
76. What's the difference between a maintenace expense and a capital expense? Maintenace expensies can be immediately claimed against income. Capital expenses may be depreciated over time.
77. Ask your agent to check out the car a potential tenant drives. It doesn't have to be expensive, just well maintained.
78. Never buy an investment property based on current government legislation. Governments change and so do the rules. Buy an investment property because it's the right deal for you.
79. Don't spend money advertising for a tenant in the newspaper. The internet will do the job.
80. When employing an agent to manage a property, do your best to meet your property manager.
81. Bad tenants cost landlords thousands of dollars in missing rent and repairs every day. Select a tenant who cares.
82. As Noel Whittaker says, 'Buy in gloom, sell in bloom.'
83. Investments can look attractive with a high gross return. It's best to check that the numbers work on the net return also.
84. Ask these questions before employing an agent: 'Are you the property manager who'll be looking after my property? And if not, who will be?' 'How many properties do you personally (as well as the company) currently manage? 'How many tenants on your books are currently in arrears and what action do ou take if a tenant is behind in rent?' 'How can you ensure the best returns from my property? And what else can you do that another property manager can't?'
85. Stability in a property management department is a good indicator of the quaility of that business.
86. Organise your own building insurance.
87. The more you learn, the more you earn. Keep studying and learning skills of property investment. The same as with any endeavour, you will become better at it. Knowledge is power in property investment. You can never do too much research.
88. Don't believe the myth of house prices doubling every seven years. The average house in Melbourne in 1973 was $19,800. If prices had have doubled every seven years, in 2014 the average price would have been $1,267,200, whereas in 2015, it was $668,030, around half that.
89. Buying off the plan? Make sure the numbers stack up on current valuations. If the deal relies on capital growth, the purchase becomes a speculation rather than an investment. That's fine, as long as the distinction is known.
90. Focus on the positive but be prepared for the negatives! Ensure that your cash flow is protected if times get tough. By having a cash reserve set up properly from the start through a line of credit or redraw facility you have this buffer in place to give yourself peace of mind.
91. The biggest finance tip is to have the right experienced and connected mortage broker which specialises in investment property on your team.
92. Hire an agency with high standards, so they set the standard for your property from the start.
93. To maximise the returns from your rental property it is necessary to focus on the annual return rather than the weekly return.
94. Your Property Manager is an Expert - listen to them!
95. Rent levels are influenced by several things, but as in all markets the main factor is supply and demand.
96. When buying a home, about 90% of your purchasing decision will be based on emotion and only 10% on logic.
97. You should always buy an investment property based on analytical research.
98.Avoid major costly repairs by tending to minor repair items.
99. Althought sometimes difficult, it is a good idea not to become emotionally attached to your property.
100. Maintain a professional relationship with your tenant, to avoid any misunderstandings.
101. Your job as a landlord is to be fair, not to be nice. Being 'nice' will give your tenants and others the invitation to walk all over you and take advantage at every turn.
102. The property manager/landlord is responsible for keeping the property in good condition and fit for the tenant to live in. The tenant is responsible for looking after the property and keeping it clean and free from damage.