Whether they own one investment property or an entire portfolio of homes and apartments, landlords have a variety of common concerns when it comes to renting out their properties.
Let’s explore six of the biggest worries for landlords and how property managers can help.
1. Finding and retaining a long-term tenant
Given the global disruption over the past two years, it’s more important than ever for landlords to have a steady income stream from their investment properties. The best way to do that is undoubtedly to attract and retain a quality long-term tenant. In fact, this is such a top concern for landlords that there’s been peer-reviewed research into landlord–renter relationships in Australia post-pandemic.
There are various ways you can encourage renters to become long-term tenants, whether that’s keeping the rental price steady or ensuring they have any maintenance needs addressed quickly. But it’s also a good idea to have a professional property manager act as an intermediary and take care of all their needs in a timely manner without interfering with your day-to-day life.
2. Dealing with damage to the property
Damage a tenant may cause is a big worry for landlords. Landlords never want to see their valuable assets damaged – and neither do we. When you’re dealing with something as important as an investment property, keeping it in good condition is important to maintain its value, appeal and the return on investment.
Extensive damage to rental properties is actually quite rare, but it’s wise to take out the appropriate level of insurance – from general home insurance to landlords insurance. Property owners should also vet prospective tenants carefully, and stay abreast of regulations and the state government’s advice on damage to rental properties. Again, an experienced property manager will be able to advise you on your rights and responsibilities and what constitutes “fair wear and tear” versus damage.
3. Vacancy rates
Understandably, landlords are concerned about vacancy rates. If a suburb’s vacancy rate is high, it means there are more properties on the market than there are willing tenants – and if a property sits unrented for too long, it can end up costing landlords a significant amount of money in lost rent.
Fortunately, vacancy rates are very low right now (around 0.9% in late 2021), which places landlords in a great position. It really is a landlord’s market as we enter 2022. But regardless, whether you have just one investment property, it really does pay to get the support of an experienced property manager who can rent your home to the right tenants, at the right price in a timely manner, in all market conditions.
4. Tax
No one likes doing their taxes but a landlord’s financials begin to get complicated with multiple assets and investments. There are many tax benefits to being a property investor, but from paying land tax to capital gains, or understanding how a Tax Depreciation Schedule can be of benefit, things can also get complicated fast when it comes to investment properties.
We usually recommend that any property investor – whether they are just thinking about buying another home or apartment, or have been an investor for decades – get an accountant or financial adviser to provide them with expert advice relevant to their particular circumstances.
5. Adding value
If your property is looking a bit tired or isn’t getting good applications from tenants, should you spend a bit of money on cosmetic changes to attract more renters? Should you invest in a larger renovation at the risk of losing several months’ worth of rental income? Would putting built-in wardrobes or air-conditioning raise the rent more than a kitchen reno? And most importantly, at what point do you run the risk of overcapitalising?
While some landlords are happy to set-and-forget, others are more interested in growing their wealth by adding value to their properties. With an experienced property manager at your side, you can get expert advice on the right changes to make and the right times to do them to maximise your return on investment.
6. Misuse of the property
For new property investors especially, it’s easy to get swept up in the rumours around bad tenants. While there will always be bad – and even criminal – tenants, the truth is that the vast majority of people simply want a place to call home that meets their needs and is within their budget.
Concerns about your investment property being used as a drug farm are usually more fantasy than truth, but it still pays to conduct a thorough screening check of any prospective tenant. Experienced property managers know the right questions to ask and can get the relevant history on applications so landlords won’t have to worry.
Article Source: www.rentwest.com.au
