Advice from a Real Estate Agent about the
Common Mistakes Made by New Landlords
If you own an investment property it is a little like owning a business, there are things you will know going into the enterprise and other things you will learn along the way. Some of the problems that new investment property owners can run into are easily fixed and others may end up being a costly mistake, so the best advice is to do as much research and be as informed as you can be. A Real Estate Agent whom you know and trust will more than likely help you out with some advice along the way if you just ask them. Remember a Real Estate Agent spends a lot of time studying at college to earn a Diploma in Real Estate, so they have a lot of knowledge on the subject and are up to date with all the new laws and requirements that need to be carried out by landlords and the tenants. A real estate agent really is a walking encyclopedia on Real Estate at times if he has kept his own knowledge updated.
Common mistakes that new landlords can make are:
The Legal Stuff
Ensure that you are familiar with all of the current rights and responsibilities that you, the landlord are obligated to follow and also make yourself aware of those of the tenant to ensure that you both enter into a legally binding agreement, that you don't infringe any of the rights of your tenant, and that you are full aware of your tenants obligations too, in case they are unfamiliar with them. If you are unsure of any of these requirements that you or your prospective tenant are required to follow, then just seek the advice of your local Real estate Agent, advice is usually free, so just ask!
Whilst you will need to get your tenant to complete a Residential Tenancy Agreement and a Bond Lodgment Form, you also need to ensure that all of the information your tenant has given you is correct, therefore asking for a copy of their drivers licence and/or passport should be part of your tenancy process. This is a back-up for you in case the tenancy does not work out as it should. Keeping thorough documentation is part of running a business so create a file to record all of the correspondence, maintenance, and other information related to the house. A Real Estate Agent who works in property management would be the best to enquire from if you are unsure of what records you are required to keep.
Ensure that your insurance broker or insurance company has your property listed as a rental property as you will require a different cover to the home in which you live. It is also beneficial to encourage your tenant to have tenants insurance as this will cover them for any damage they may cause the property, whether through accident or neglect. This will assist both parties in the unlikely event that there is a loss. If you are unsure of what type of insurance you may require then ask a Real Estate Agent who deals in property management, he will be able to advise you on your requirements’ and may even have the name of a reputable insurance broker or insurance company who specializes in landlord and tenant insurance.
Ask The Professionals
A new business owner is unlikely to purchase or start a business without some professional advice whether it is from an accountant, lawyer, or an industry authority, and it is the same for anyone buying a property investment. Engage the services a Real Estate property management company, or if the property is a strata style of property seek the services of a reputable Strata Management company they will be able to advise you on your requirements there as well. They can assist you with ensuring you start your new enterprise on the right foot, ensuring minimal mistakes, plenty of professional advice, and peace of mind for you, the new landlord that your investment is being looked after competently and professionally.