We all know that investing in the property market can be a fast track to a lucrative retirement.
Unfortunately, most have us have also heard the horror stories about tenants who destroy property, don’t pay the rent or both. Further complicating matters for property owners is the Residential Tenancy Act, which can be confusing and difficult to navigate for the layman.
These issues have made many potential investors wary of property as a reliable way of generating a set and forget income. By pinpointing the pitfalls which are ready to jeopardise your foray into investment property and implementing strategies which will avoid these, you can optimise your chances of a successful tenancy – minus the hassle and stress.
Hand over the reins
A common theme amongst many property investors is a reluctance to pass the responsibility of handling the day-to-day management of a property, over to a third party.
The reasons for reticence can be many; including cost, loss of transparency and perhaps control. What many are failing to realise is that they are often acting against their best interests in all these areas.
Industry professionals who have extensive knowledge and experience of the market, are not your average property managers and they can provide landlords with higher rental yields, better tenants and an open line of communication with a clear window to all aspects of the tenancy through:
- Optimising marketing through photography, online and traditional advertising
- Access to a superior pool of tenants
- Stringent screening of potential tenants
- Regular property inspections
- Detailed monthly statements
- Thorough understanding of residential tenancy regulations
- Prompt actioning of maintenance and repairs
The philosophy of “the more you have, the more you have to lose” comes into play when renting out a property. Fancy gardens, fragile furnishings or delicate finishes such as polished floorboards, can be a recipe for disaster when renting out your property.
Spend money thoughtfully when preparing a house for tenancy. Invest in materials which require little upkeep but will withstand the rigours of family life. Even the best tenants are unlikely to treat a property with the care an owner/occupier would. The key is to keep everything low maintenance. Surfaces should be durable and hard wearing, while gardens should be populated with drought-resistant plants.
As an example, it can be false economy to cut corners by installing laminate benchtops which tenants will likely damage or leave score marks in. Stone benchtops may be a greater initial outlay but will withstand far harsher treatment, for longer than less expensive finishes. Conversely protect delicate surfaces such as timber flooring through the use of neutral, long wearing carpeting.
As a landlord, you have a legal obligation to ensure that your tenant has a level of comfort and that basic amenities such as plumbing and electrics are in good working order. To minimise outlay and hassle caused by constant repairs, organise servicing to things like ducted heating, hot water systems and plumbing, prior to the tenancy and rectify any issues or upgrades which may be recommended.
Tenants have a right to authorise some urgent repairs to be carried out up to a value of $1,800, and this can be costly in an emergency situation. By foreseeing and preventing these issues before they occur, you can save both time and inconvenience to both yourself and the tenant.
Above are just a selection of ideas which should be implemented prior to hanging out your ‘for rent’ shingle. By sourcing a reliable and knowledgeable local agent, having a solid property on offer and preparing it well, you can minimise the stress involved in renting out your home for profit. It is a formula which has been used by myriads of investors in the past, to ensure a lucrative, comfortable retirement – so why not begin your journey today?