Having a property to rent out and becoming a landlord apparently looks easy and very profitable. You have a constant stream of money flowing into your pocket while at the same time your property appreciates in market value. However, there are many problems that beset a landlord and can be financially and emotionally crippling if solutions are not put in place quickly.
Here are a few issues that landlords face and how they can be resolved with a little bit of planning and foresight.
- Bad tenants – This is the nightmare that haunts most landlords. There are tenants who don’t pay rent on time or those that damage property and create a disturbance in the neighbourhood. You might face all these problems which will be further compounded if you live in another city or town. Monitoring your rental property in such cases can become very difficult.
What you should do is thoroughly check the antecedents of prospective tenants before renting out to them. Have a police verification done if required and enquire at their stated workplace. Screen the tenants and be meticulous about the paperwork, hiring a property lawyer to take care of the preliminary issues if so required. Enforce a strict system of rent payments monthly. Avoid self collections and have the tenant instruct his/her bank to transfer the rental amount to your bank account every month.
- No tenants – Just as awful tenants are no good for you, no tenants is equally bad. For every month that your property stays vacant, you are incurring a loss on returns on investment. Think of the mortgages that you have to cover! Hence it is always recommended that you build a corpus fund to handle the expenses on your property till you find tenants. The way to get around this “no tenant” issue is to market your property well. Take the social media route or place advertisements in newspapers. Taking the help of friends and family is the best option as you will be recommended proven good tenants only by them.
If you feel that your property is going to be vacant for extended periods install home security alarm systems. This will help you monitor your property even if you stay elsewhere. Further, it will add value to your property and increase the quantum of rent. Contact onetecsecurity.com.au for top of the line intruder detection systems for your rental property.
- Your Liabilities – You expect your tenants to look after your property and pay the rents regularly. Similarly you should ensure that you comply strictly with federal or State statutory requirements for rental property. If you fail to meet these requirements, you can be made liable for damage should your tenants face any injury or ailments because of your property. The best way to guard against this possibility is to periodically inspect your premises as part of regular maintenance and ensure that it is structurally safe.
- Be prepared for unforseen expenses – It is true that it is not always possible to be prepared for all eventualities. Hence you should have reserve funds to meet unexpected circumstances. Inspections might show up problems with the foundation, plumbing or wiring, fixing of which can mean a sudden drain on your resources.
- Hire a property management company – This might not be economically feasible if you have one property to handle but is definitely preferable if there are a number of them to be monitored. A property management company will take care of your holdings, arrange for small in-house maintenance, collect rent and remit them to you. You can also entrust complete management to them including looking after your mortgage payments and other bookkeeping matters. This becomes crucial when you are located at a place other than where your property is.
Keep these factors in mind and you should have no problems in managing your rental property.