REDUCE YOUR INVESTMENT RISKS.
The two biggest risks identified in renting your property is:
1.Vacancy = no rental income.
2.Defaulting tenants = non-payment of rent.
The first step is to identify what you can control with regard to the above, then what can you do about it? You probably cannot directly control our economy, the financial well-being of your tenant or the supply of new property into the rental market. You can however control how competitive your property is with regards to the rental amount that you charge, how appealing your property is to tenants in your market and how you treat your tenants.
How to prevent your Rental Property from standing Vacant.
Know your market, suburb and complex with regards to competitive current rentals being charged, rental increases and the rental demand. Be realistic about the rental you want to achieve.
Make your property desirable – Make it look and feel modern, neat and tidy. Do you have 10 year old grubby carpets in every room or nice and appealing wooden floors or at least laminate flooring? What does your kitchen look like, would you like to cook in there? When last did you give the property a good coat of paint? Intrinsic to owning a rental property is the need to spend money upgrading your property from time to time, especially when the market is tough. Spending money on maintenance and upgrades can also be tax deductible, so contact your tax adviser in this regard.
Look after good tenants – If your tenant is a good tenant, pays their rent on time and looks after your property, return that with interest by looking after them. Be responsive to their communication, be considerate to their requests for maintenance and be reasonable with renewals of the lease and rental increases. Communicate professionally, politely and show respect. It is almost always better to renew a lease with a good tenant, even without a rental increase, than to start over looking for a new tenant.
Maintain your property – know what your responsibility is with regards to maintenance and do it! At the same time understand what you tenant is liable for and be firm about this too. Click here to see what maintenance you are legally responsible for. One of the biggest complaints from tenants that we deal with on a daily basis in landlords that refuse to take responsibility and do the maintenance and repairs that they are obliged to do.
How to guard against non-payment of rent
Screen tenants properly before signing a lease and allowing them to take occupation and control over your property. Make sure that they can afford the rent, verify their income & employment and get a reference from their previous landlord. Be aware of scam artists, there are many out there!
Be fair and reasonable when dealing with requests (or fair demands) from your tenant.
Monitor your tenant’s payment behavior and be quick to respond and rectify it if you need to. Follow the correct legal steps when your tenant stops paying rent or defaults. In this situation, unless you know exactly what to do, get legal advice quickly.