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<\/p>\nProperty is an excellent\u00a0source of passive income, which is why so many people get into this type of investment. However, it\u2019s not as easy as just buying a house and leaving it there to appreciate \u2013 the typical goal is to lease it out and profit from there. Thus, keeping a well maintained, safe home is vital to your investment journey and to your reputation in the property industry.<\/p>\n
As a landlord, you want to be able to offer prospective tenants a dwelling that is\u00a0comfortable and secure. You also want to safeguard your investment, especially since it is largely at the mercy of others. The possible issues for investors are generally related to upkeep, damage and tenants. All these things\u00a0can be costly, so it\u2019s best to be proactive and take preventive measures before they take a chunk out of your savings.<\/p>\n
Many of the big risks of property ownership can be easily rectified, reducing significant liability risks for\u00a0landlords. Let\u2019s look at a few of the biggest potential pitfalls and how to minimise the chances of a negative outcome.<\/p>\n
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RISK: DETERIORATION AND BREAKAGE<\/strong> Mitigation strategy: Regular maintenance and prompt repairs<\/strong> If you discover problems, always look to fix them as soon as possible. The longer you leave a problem, the more it will impact the value of the home.<\/p>\n RISK: FIRE DAMAGE<\/strong> Mitigation strategy: Up-to-date smoke alarms<\/strong> If there\u2019s a problem with the sensor, it\u2019s best to buy a new smoke alarm since they\u2019re not too expensive, and the small outlay is well worth the potential of risk of having a faulty alarm.<\/p>\n RISK: TENANCY DRAMA<\/strong> Mitigation strategy: Landlord insurance<\/strong> When getting landlord insurance, it\u2019s important to check not just the price, but also the provisions included. You\u2019ll also want to determine if you\u2019ll need special conditions related to the weather or to pets.<\/p>\n Landlord insurance is not just limited to long leases \u2013 policies have also been developed to cater to short-term rental properties like those on Airbnb and Stayz.<\/p>\n RISK: LACK OF PLANT MAINTENANCE<\/strong> Mitigation strategy: Know what you’re responsible for<\/strong> RISK: PEST DAMAGE<\/strong> Mitigation strategy: Regular inspections by pest control\u00a0<\/strong> Fleas and ticks can often breed in carpeting, especially if an occupant has dogs or cats. The property could also be harbouring spiders, especially if you live near bushland or cultivate plants. Rats and cockroaches typically go where\u00a0there\u2019s food, so you want to nip these infestations in the bud before they bring harm to tenants or drive potential ones away.<\/p>\n RISK: POOR PROPERTY MANAGEMENT<\/strong> Whether their client book is too large, their resources stretched or they just don\u2019t have their heart in it, these are the types of property managers you want to avoid at all costs.<\/p>\n
\nOver time, a property slowly deteriorates \u2013 that\u2019s why the government compensates investors for depreciation. As a property owner, it\u2019s important that you stay on top of repairs and conduct routine inspections to make\u00a0sure everything is in good condition, especially as it relates to the structure and foundation of the property.<\/p>\n
\nScheduling maintenance checks definitely will take time and money, but at least you can dictate the schedule, as opposed to having your day disrupted because you need to deal with an emergency repair. Parts of the home you\u00a0want to monitor include the plumbing, electrical works, the building materials and the appliances.<\/p>\n
\nThis is a major problem, especially if tenants cook or light candles, as fire can affect more than just your\u00a0property \u2013 if it gets out of hand, lives are at risk. So it\u2019s crucial to have fire safety procedures in place and to ensure that tenants are conscientious about keeping to regulations like making sure the gas is properly turned off.<\/p>\n
\nSmoke alarms have a typical lifespan of eight to 10 years, but the battery does need to be replaced once a year. It\u2019s a good practice to regularly make sure your property\u2019s smoke detector is working effectively, especially if a tenant has just departed. You can do so by lighting a candle under the sensor can detect it.<\/p>\n
\nEvery landlord hopes to get great tenants who are respectful, neat, quiet and pay rent on time. However, that\u2019s not always the case, and more often than not, you get tenants who give you\u00a0major headaches. So you definitely want to be ready for pet problems, roommate disagreements and, at worst, the possibility of eviction.<\/p>\n
\nTenant-related issues can be expensive, especially if legal expenses are necessary, so landlord insurance is a must-have. This insurance generally covers theft or burglary by tenants or their guests, malicious damage\u00a0or vandalism, loss on rent profits due to defaulted payment, and the legal expenses related to eviction. This insurance is tax-deductible because it is considered an investment expense.<\/p>\nEvery landlord hopes to get great tenants who are respectful,
\nneat, quiet and pay rent on time. However, that\u2019s not always the case.<\/em><\/h2>\n
\nIf your property has a lawn or a garden, there\u2019s a good chance you could come back to dead or overgrown landscaping, which could be troublesome if it lures in insects or other pests. It can also be disheartening, especially if you\u2019ve put a lot of effort into the upkeep.<\/p>\n
\nTenants are generally only required to maintain plants to the standard in which the landlord left them, but this is not a hard rule, so you\u2019ll want to make sure that the need for plant maintenance is specified in the tenancy\u00a0agreement. Moreover, tenants have no responsibility if the area has restrictions on the use of water. Finally, plants requiring special maintenance \u2013 such as tree removal \u2013 are definitely out of the tenant\u2019s hands.<\/p>\n
\nPest-related problems are common and should never be taken lightly because of the potential for significant damage. Termites are capable of destroying a property all the way down to the foundation, and an ant invasion can cause structural damage as well. In addition, infestations of cockroaches, rats and fleas can bring disease to the household.<\/p>\n
\nWhen looking for a pest control company, the main factor is to know exactly what kind of services\u00a0Mitigation strategy: Regular inspections by pest control When looking for a pest control company, the main factor is to know exactly what kind of services you’ll be getting. For instance, some firms might focus exclusively on wood destroyers like termites while you’re looking for a thorough inspection that covers all kinds of pests.<\/p>\n
\nAs with every profession, property management is not immune from \u2018dud\u2019 operators. Many property managers are experienced, professional and passionate about customer service, towards both the landlord as the client and the tenant as the paying customer. But some\u00a0simply do the bare minimum, meaning they collect they rent and that\u2019s about it. They don\u2019t perform regular inspections or communicate efficiently \u2013 some may even fail to follow the legal guidelines when it comes to bond lodgement and tenancy breaches, which is a huge no-no.<\/p>\n