So you’ve bought your first investment property and decided to become a landlord – congratulations! But what now?
Property investment can be challenging at times, and if not executed properly, have dire financial implications. The team at Johnson Real Estate have put together their top six tips for landlords just starting out in the investment property world:
Do your own research
Agents will often quote exaggerated returns in an attempt to win your business. Anyone can quote you a high rental return, it’s another story to actually achieve it. Do your own research to see what similar properties in your area are renting for. Investing is a numbers game and relying on an inflated return is risky business.
Having a trusted property management team looking after your investment property
If you have no prior experience with investing and you’re not sure what the process entails, having a trusted property management team in place is a must. Not only will they be able to set you up correctly from the very beginning, they’ll also be able to explain your rights and responsibilities as a landlord and handle all payments, entries and exits, inspections, maintenance request and fill vacancies. If you try to handle it alone, chances are mistakes will be made and it will cost you more in the long-term.
Make sure to research potential agencies and choose one which you feel is the most capable. Your property management team should look after your property as if it was their own.
Take out landlord insurance
Although landlord insurance may not be compulsory, the Johnson Real Estate property management team highly recommend taking out cover. You may have a fantastic tenant in place, however it doesn’t guarantee things won’t go wrong in the future.
Landlord insurance protects your pocket so that you’re not out of pocket. This includes anything from malicious or accidental damage to rent arrears. Could you afford your mortgage repayments if your tenant was unable to afford their rent?
As the old adage goes, it’s better to be safe than sorry.
Be courteous to your tenants
There are just as many horror stories about terrible landlords as there is about nightmare tenants. Good landlords create an environment where tenants feel like they are truly home while maintaining a professional relationship and transaction. A good tenant is worth their weight in gold.
Have an emergency fund
Things have a tendency of going wrong when you least expect it. It can be a good idea to have an emergency fund to cover things such as new hot water systems, leaks and other repairs. Approximately between 2 to 4 weeks’ worth of rent is a good figure to have to cover unexpected costs.
Don’t underestimate getting your property ready for rent
Getting your investment property ready for tenants is commonly underestimated by landlords. Properties should be thoroughly cleaned (to a bond clean standard) to set a high standard from the very beginning. This includes everything from tops of fans, window tracks, carpet cleaning, ovens and more – the place should be immaculate. It is highly advisable to get professional cleaners in. It is also smart to be proactive and get a property management team involved as soon as you know when you would like to rent your property out. By getting a property management team involved earlier, you can reduce your vacancy and gets ads and photos organised in advance.