Only 7.9 percent of Australians work in property management, so owning a rental property is a notable accomplishment there.
Even while it can be intimidating for first-time property investors, there are some things you should know that will position you for excellent profits and stress-free tenancies well into the future.
There are several things I've learnt from my more than ten years of experience dealing closely with real estate investors and owning an investment property.
Here are some pointers to help you establish yourself as a knowledgeable landlord right away.
1. Maximise your rental return
Rent is the revenue of owning an investment property, which is similar to running a business. Ensure that your rent is paid on time and concentrate on boosting your rental returns. Make sure that late rental payments don't hinder the cash flow of your investment property because you will have expenses (mortgage repayments, council fees, insurance, maintenance, etc.).
The majority of renters will pay their rent on time, but you must keep track of them when they don't and be prepared to begin the eviction procedure if the behaviour persists.
2. Thorough tenancy checks
Your investment could succeed or fail, depending on your tenant. A good renter will ensure an easy, stress-free tenancy, but a bad one can be quite expensive and time-consuming.
Don't be afraid to hop online and search social media for any further hints about the person you're about to let live in your property. Take the time to look into each applicant's work and renting history.
Be cautious if past agents provide you feedback about a tenant's history of late rent payments or property damage because those behaviours are unlikely to alter.
Additionally, watch out for tenants who use friends or relatives as their agent or job.
3. Consider the Pro’s and Con’s of accepting pets
Is your place a pet-friendly place? Some of my clients are adamantly opposed to renting to pet owners, while others are delighted to do so. There are undoubtedly advantages and disadvantages to each, but there is no right or wrong answer.
Pros:
- There is a huge demand for pet-friendly properties.
- Most leases will have special terms to include any damage caused by pets because pet owners prefer to use properties for longer periods of time.
- You're dramatically expanding the pool of potential tenants, which could shorten your times of vacant housing.
Cons:
- Pets can harm homes, particularly the flooring and gardens.
- Accommodations that allow pets may deter potential tenants with pet allergies.
- Some pet odours might be quite challenging to get rid of.
4. Look at other income opportunities
After purchasing their home, most landlords will offer it for a long-term lease and then neglect the property throughout the lease. Other possibilities exist, depending on how hands-on you want to be:
- Short-term lease – AirBNB
- Long-term furnished property
Although not all investors or properties may be a good fit for these possibilities, it's still worth looking into them or discussing them with your agent.
5. Know the Law
To avoid getting yourself into an expensive and maybe embarrassing situation, it's crucial to understand your rights and obligations as a landlord. It's critical to understand your rights and obligations when managing a property on your own and what to do in the event of a crisis.
6. Present your property to attract the tenant you want
Good tenants will be drawn to good buildings. I don't mean good as cheap, but rather as kept up, tidy, well-presented.
Your property should be portrayed as clean and well-maintained if you want to draw tenants who will keep it that way. Finding decent tenants will be aided by touching up paint, cleaning the place thoroughly, and removing odours. Additionally, you'll draw in tenants of a higher calibre, yet your house will stand out in a crowded market.
7. Don’t over-capitalise
This has happened so frequently that I've given it the label "The Block Effect."
When remodelling an investment property, it's quite simple to go over budget, but it's crucial to remember to consider your return. It might be challenging to balance spending responsibly and avoid overspending. The key is to save money where you can while investing it where it will have the biggest impact.
The plan for my customers is to research what is already being leased in the neighbourhood at or around the rental price they hope to obtain after the refurbishment. This helps them determine how much money they need to invest and which areas of the house need repair in order to receive the desired returns. This makes it simple to compare cost and return and defend every dollar spent.
8. Have a great team
"Wait until you hire an amateur if you think it's pricey to hire an expert to do the task."
Find a reputable accountant, property manager, and mortgage broker by taking your time. Your value will be increased right away by a good team's hints, tips, and expert counsel.
9. Good marketing is essential
If no one knows about your property, you won't be able to lease it. Having a solid marketing strategy for your property will help you avoid lengthy and expensive vacancy periods and attract many qualified renters.
The greatest way to increase your chances of swiftly leasing your property is to invest in high-resolution professional images and effective advertising packages on real estate platforms.
10. Regular inspections are a must
Most rental properties owners who manage them are reluctant to allow a routine examination. Although it may seem intrusive and like you are invading, it is crucial to ensure your investment property is maintained and cared for.
Every six months, you should inspect the property to look for signs of building problems (cracks in the walls, creaky floorboards, building movement), excessive wear and tear, or uncaring tenants.
When thinking about whether to give the tenants a longer lease or raise the rent in the future, you should evaluate the state of the property.
Five tips to be the best landlord
You've arrived at the proper location. But first, why is mastering the position of the landlord so crucial?
1. Find an expert property manager
First, spend money on Valentic, a qualified property manager with experience and a proven track record.
Look for someone who is knowledgeable about the rental market, the law, and that particular suburb.
Make sure they can identify good quality tenants who have been thoroughly verified, and that they can accurately price your property—not underprice it or overprice it.
You should ensure that the property management you select to work with can maintain the property well and that they have a good and professional demeanour in all communications with the renters throughout the lease.
2. Opt for professional photos
Get quality photos taken, spend time writing a solid home description, and display the floor plan upfront as further investments.
When marketing your property, use good pictures and a descriptive description that makes sense.
The first photo is crucial because more tenants are now using mobile devices to conduct online searches. Depending on that, customers will either click through or simply browse down to view more properties.
A floor plan, some images, and a description are fantastic long-term investments. Every time your home becomes available for rent, it will continue to pay off.
3. Invest in your property
According to Valentic, you should also make improvements to the property itself if you want to draw in quality tenants. Consider installing heating and cooling systems; heating is especially important in Melbourne.
Long-term investments that will help you recruit and retain high-calibre renters include installing dishwashers, repainting, installing top-quality blinds, and making sure the flooring are in good condition.
4. Have a financial buffer
Remembering that your real estate investment is a company, you should make sure that you always have a financial safety nett. You shouldn't constantly be under financial strain. Additionally, if your rent is not being paid, you do not want to put your credit rating at risk by defaulting on your mortgage.
A great long-term plan is to have a buffer to get you through temporary hiccups. Additionally, having an insurance policy to support you only balances that out.
5. Maintain your property
And finally, a crucial long-term plan is to maintain your property throughout the tenancy.
In the long run, it really costs you money as a real estate investor to turn down tenant requests for maintenance, despite what you might think. "You must watch out for the condition of your property and continue to take care of maintenance issues as they arise.
Long-term benefits come from making investments along the road to keep your tenants satisfied. Avoiding maintenance is a short-term strategy to save money.
4 Tips To Educate Landlords About Maintenance
Although upkeep is a big part of the job of a property manager, landlords frequently don't think it's important. Unfortunately, this does not mean that it should be ignored; by law, tenants are entitled to a safe and liveable environment, and property upkeep is crucial to provide them with this. The value of that investment property, which is typically your landlord's most valuable asset, will be preserved by maintaining it well-maintained.
We wanted to share our best advice for educating your landlords so that you may have this crucial talk with any of them who may be neglecting their maintenance duties.
1. Understand Your Local Laws
It's important to start with a strong foundation if you want to be able to instruct your landlords on how to maintain their properties. And the law serves as that foundation. Although the statutory legislation and upkeep requirements vary from state to state, all of them call for landlords to keep their properties in excellent condition. Start by reviewing their legally mandated obligations and evaluating the consequences of failing to fulfil them.
2. Discuss the Benefits of Property Maintenance
There are a number of other advantages you may highlight for your landlords, in addition to the legal need, that might encourage them to perform routine maintenance on their buildings.
- You can prevent worse issues down the road by performing routine maintenance (minor fixes, low expense) (big fixes, big costs)
- While a home in disrepair may have good tenants wishing to leave or attract tenants who don't care for the property either, a well-maintained property can draw high-quality tenants and keep them on for an extended period of time.
- The investment's value and prospective rental revenue can both rise with regular care.
- The time between tenancies will be shortened because quality tenants are more likely to quickly snap up a well-maintained property.
- Regular maintenance may make claims easier to approve because many landlord insurance carriers demand homeowners to maintain the property to a specific quality. If these standards are not met, claims may be denied.
- Avoid having extended voids in between tenants; it is most economical to perform maintenance while a tenant is occupying the space and paying the rent. If you wait until the rental property is empty, it may take longer to find new renters while the property is being repaired up.
It can be helpful to have concrete examples from your prior experience to back up your arguments when discussing these topics with your landlords. These examples can be any situations in which you are aware that routine maintenance could have saved the landlord money by preventing the need for expensive emergency repairs or where the landlord experienced a protracted period of vacant occupancy while attending to extensive repairs.
Putting more emphasis on the advantages than the disadvantages might also be beneficial. Reduced maintenance costs, a rise in property value, dependable tenants, etc. The drawbacks may be so frightening and overwhelming to landlords that they decide not to even start the dialogue.
3. Make the Process Easy
Describe how you will make the process simple for your landlords by looking for immediate repair needs as well as potential future maintenance jobs while performing your already scheduled property inspection. Let your landlords know they will benefit from your regular inspections when it comes to maintenance.
This will enable you to show how you are safeguarding their asset and seeking out any possible problems that require maintenance action before they worsen.
Some property managers find it helpful to include their more hands-on landlords in a routine inspection so they may observe the property while it is occupied and learn what you look for.
Alternatively, you might offer your landlord that you arrange for them to come for an annual regular maintenance inspection and work with a tradesperson on a pre-determined checklist. Busy landlords are more likely to be on your side when it comes to property maintenance the easier the procedure is for them.
4. Communicate
From making sure your tenants understand exactly what is expected of them regarding maintaining the property to receive their bond back when they move out to having the landlord agree on a checklist of maintenance inspections conducted at regular intervals, communication is essential throughout the process.
The process will go much more smoothly if you provide simple methods for tenants to report any difficulties, checklists and templates to follow, and regular communication with your landlords in the manner they prefer to be contacted (phone, email, text).
You can use these few pointers to help you and your landlord have a maintenance conversation. Showing them you have their best interests in mind and will complete the task as quickly and routinely as possible, at the lowest feasible cost, while protecting their investment will help you win their support.
- Going it alone. ...
- Find trustworthy handymen and tradespeople for the jobs you can't do. ...
- Find good tenants. ...
- Use a property management service. ...
- Renting out your own home. ...
- Get property insurance. ...
- Comply with your legal obligations.
- Invest in the right properties. There's a saying in real estate that you make your money when you buy. ...
- Purchase good insurance. ...
- Meticulously screen tenants. ...
- Streamline rent collection. ...
- Partner with the right professionals. ...
- Keep good records. ...
- Supercharge your ROI.
- Make sure the rental property is safe. Safety is paramount. ...
- Arrange an EPC. ...
- How to Rent Guide. ...
- Give your property the right exposure. ...
- Carry out a Right to Rent check. ...
- Reference your tenants. ...
- Arrange a tenancy agreement. ...
- Check your landlord insurance.