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On Becoming a Landlord: C&G’s Guide to Risks and Rewards.
For some investors, taking on the dual roles of landlord and property manager seems like a logical move – often one motivated by a desire to save money in the short term. Becoming a landlord is a heavy responsibility - and it is important to recognise that a well-managed property and tenant relationship comes from both expertise and hard-won experience. Before you decide to go down the DIY property management path, let C&G give you an insight into the world of a property manager, and share with you some of the risks that can arise when self-managing an investment.
If you are considering managing your own rental property, it is essential that you consider all possible pitfalls. Yes, you may initially save on management fees by undertaking the responsibility yourself - however if you overlook the risks, you may find yourself wishing you had saved yourself the extra headaches! Here are some possible self-management issues to be aware of:
Placing the right tenants.
This may sound like an easy enough task. They sound right on paper, they interview well – why wouldn’t you accept them? Candidates looking for private rentals often don’t have the best leasing history, and are aware that private landlords are not as thorough in checking their histories as experienced agents are. The wrong tenants can lead to late rent, management issues, property vandalism and other expensive, time consuming problems.
Knowing your responsibilities
If you are going to be a self-managing landlord, it is essential that you are well versed in obligations to your tenants, and theirs to you. Outline what is expected early on to ensure that there is a mutual understanding, and observe all legislation in relation to bond lodgment.
For more info, click here.
If you do decide to self-manage, you need to know your stuff! There are strict laws which you must abide by in order to ensure that you, your tenants and your property are protected under any circumstance. The bottom line? Property management isn’t an easy task! Chisholm & Gamon always recommend using a professional property manager. If landlords don’t comply with legislation - it can lead to major fines, so keep the following in mind:
Property inspection without correct notice:
Tenancy laws in each state are different and stipulate how often inspections can occur and how much notice must be given to tenants. Failing to issue correct notice can be costly!
This is a legal document designed to protect the interest of both parties, outlining the conditions a property is found in so that it can be returned to the owner in good repair.
This is a security deposit held by the RTBA. This deposit is drawn upon should the tenant fail to meet their obligations under the tenancy agreement - for example failing to pay rent or damaging property.
For more information on tenancy legislation, click here.