When it comes to renting a property for the first time, new Property Investors can make some big mistakes that can cost them dearly later on.
So to help you make the right decisions upfront, here are FIVE MASSIVE mistakes to avoid:
Don't Choose Your Agent on Cheap Fees.
As the saying goes, cheap fees are for a reason. And if you've selected an agent because they're more affordable than others, just remember that they priced themselves cheaper, knowing full well what their competition charges and have done so because they believe their services are likely inferior to that of the other agent. Therefore, fee-charging levels give a good indication of agency quality and their belief in what they deliver.
Don't try and save a few dollars at the start of the relationship only to lose thousands later through agent negligence and cheap service.
Not Having Quality Landlord Protection Insurance
Insurance covers unforeseen and unexpected losses, and you can stand to lose a small fortune without the right insurance cover.
Whether you need to protect your rental income against financial hardship of the tenant (their circumstances can change at any time), damage and re-renovation due to methamphetamine drug production, loss of rent from the death of a tenant, to malicious and intentional damage and the list can go on.
Your standard building insurance will not cover you for tenant-related matters, and you also need to avoid taking out inferior landlord insurance cover through a financial institution or even at the supermarket.
Only agents can give you access to quality cover (so speak with us today on this).
Renting to Family and Friends (with or without an agent)
Property investment should be 'strictly business', and renting to family and friends spells trouble! Getting emotionally involved or being taken advantage of by a family member or friend can quickly turn into a financial loss, leaving you with regret wishing you never rented to family or friends in the first place.
Renting Property Privately
Did you know that bad tenants avoid renting through an agent and instead target private owners because they know they lack experience and don't have stringent checking on a tenancy application form (if they take one)?
If they have something to hide, in most cases, this will get overlooked or missed by a property owner trying to save a few dollars, NOT hiring an agent.
Property Management is not for the inexperienced or unwary and can quickly turn into a nightmare should a wrong decision be made.
Not Putting Money Back Into the Property
An investment property needs to be kept in good condition to attract and keep a quality tenant.
Every five to seven years, it will need new paint, carpets will likely need replacing every ten years, and now and again, it may need woodwork being painted and the general look and upkeep of the property kept in good condition.
When it comes to selling time, you want your property to be in the best condition possible to make it easier to sell it quickly at the best market price you can get.
Click here to discuss your property management needs.
JR Landing Green Square - Finalist in REB (Real Estate Business) Awards Property Management Office of the Year 2021 & 2022