Owning a property is a great opportunity to grow your finances but as with any financial investment, there are things that you can do right, and things you can do not so right. We wanted to go over some of the key pitfalls that a landlord can stumble into in the hopes that it helps you to avoid them.
Common Landlord Pitfalls
1. Not making sure the lease expires at peak times
If your lease isn’t expiring in peak times, then it’s likely that you aren’t going to be making as much money as you could be otherwise. Your property manager needs to be trying to ensure that your property becomes vacant in peak season when people are looking for new properties.
Don’t have your property lease ending at a time of year that puts you at more risk of vacancy. Your ultimate goal is to operate your property with little to no downtime because this means you won’t miss out on any income.
2. Not increasing your rent when you can
Many property owners are hesitant to increase their rent because they worry about their tenant staying. But regular small increases are easy for a tenant to budget for and agree to – for instance a small increase every year is better than a larger increase every 3rd year.
A good property agent is going to be keeping records and making sure that they are increasing the rent when it is recommended, and talking you through the current market conditions and strategies to keep rent at optimal levels without risking vacancy costs.
You don’t want to miss any opportunities to make a little more money on your property, especially if you are making improvements to the property such as air conditioning.
3. Not maintaining your property and keeping it in great order
A key part of your property is your tenant. If they are happy in your home, they are going to want to stay and will be happy with rent increases whenever they occur. You need to keep your property in great order – which means that you are performing regular maintenance and updates when required.
Your property manager will be able to inform you of anything that may have potential issues and will keep you updated with tenancy movements so you know when you can paint or revamp your property.
4. Keeping the rent too high when the property is vacant
You have just had a tenant move out, and you’re looking to get someone else in – but before you know it, three weeks have gone by and no tenant. Every day of vacancy means you’re going to be losing more money than you want to – so it’s best to take a cut on the rent and lower it to the point where someone will be happy to move in rather than lose any more money.
After all, $10 per week is only $520 over a year – and if your property usually rents for $400 and you drop it down to $390 to secure a tenant you only need to have your property vacant for 10 days for the loss to equal any extra you would have made.
5. Not presenting your property properly to the market
How are your property photos? Did you take them yourself with your phone? Or did your property manager take some professional photos with a professional photographer and bring your property to market with a description that sells your property to a prospective tenant?
While you might think that people don’t place too much value on the pictures and description, the fact is that it’s this that sells your property and gets someone to call to view it.
Are you making any of these mistakes? Don’t make them any longer — call us now for advice and guidance on managing your property on (07) 3188 7651.