Five Common Landlord Mistakes to Avoid
A lot goes into building and maintaining an investment property portfolio. Whether you have one property or ten, there are common mistakes that you should avoid to give yourself the best chance of success and make sure your properties are properly managed. Keep reading below for five common landlord mistakes to avoid.
Not staying updated on regulations
Tenancy regulations are constantly changing. From allowing pets and minor changes to properties to how often and by how much you can increase your rent, having a property manager who is across all the changes in the jurisdictions where you own investment properties is critical. This will help you ensure your property always complies with the relevant regulations and that you can proactively plan for anything you need to do due to amendments to the law.
Rushing to find tenants
Having a vacant property can be stressful, especially when you need to keep up with the mortgage payments. However, you also need to be patient and take the time to thoroughly vet tenants to make sure you find a great (ideally long-term) fit. A good property manager knows what to look out for in finding quality tenants to ensure there is stability with your property.
Not budgeting for maintenance
Keeping your investment property in good condition not only helps attract better tenants but can also help you maximise the rent you charge. Make sure you budget for things like re-painting, replacing the carpet, updating appliances, and ensuring waterproofing is effective.
Being underinsured
As a property investor, you need building insurance to cover the structure of your property. But you also need landlord insurance to ensure you’re covered in the event of losses caused by the tenant. Think things such as damage to the property or loss of rental income due to the tenant not paying their rent.
Not maximising deductions
If you don’t keep records of your property-related expenses, you could miss out on thousands of dollars each year in tax deductions. Make sure you keep records so you can deduct expenses such as body corporate fees, council and water rates, property management fees, depreciation and interest on your home loan, to name a few.
Property investment can be a great way to build wealth through both income and capital growth, but you need to be prepared. To avoid any problems, avoid these mistakes and make sure you get help from qualified professionals throughout your investing journey.
Remember, this article is general in nature and is not financial or legal advice. Please consult your professional financial and legal advisors before making any decisions for yourself.