Avoid These Traps And Enjoy Property Investment Success!
Saturday, 20th Feb 2016
Many people consider owning a rental property to be a low risk option to increase their cash flow. However, a bad decision here or there or lack of planning can turn your investment into a whole lot of financial trouble.
Enjoy and reap the benefits of property investment by avoiding these traps.
1. Setting the rent too high (or too low) - By setting the rent too high, you'll narrow down your prospective tenant pool and if left vacant, you can be creating unnessessary financial stress for yourself. Those bills still need to be paid, whether you have a tenant or not. Set the rent too LOW and again, you'll be putting yourself under financial pressure. You may also find you'll be attracting unsuitable tenants.
2. Allowing tenants to fall behind in their rent - By failing to monitor arrears, it can be an expensive process to resolve. Check your bank account on the days the rent is due. A polite reminder may be all that's needed. But if they fall into arrears, a breach notice should be sent in a professional, timely manner.
3. Neglecting Maintenance - Fix the little things before they become big, costly issues. It is usually easier, cheaper and quicker to fix a problem when it is small. Failure to attend to maintenance issues could give your tenant the impression you don't care about the property, so why should they? And, if you fail or are slow to fix an issue, you may be legally liable if your tenant injures themselves as a result of the maintenance issue.
4. Incorrect Insurance (or worse, no insurance) - Make sure you're covered for loss of rent, damage to your property and legal liability. General Home and Contents insurance doesn't cover these scenarios, you'll need Landlord Insurance.
5. Self Managing Your Property - It may sound an easy and cheap option at first but do you really have the time, resources or skills to carry out inspections, fix issues, organise repairs, serve breach notices, carry out evictions, advertise & screen tenants? Qualified Property Managers are trained and experienced to work through each of these tasks. They have systems in place to screen potential tenants, are able to access data bases which list tenants' rental history and understand market trends and pricing to be able to rent your property at a decent price.