August 2016 :: Market Updates
LANDLORDS TOP 5 CONCERNS
Owning an investment property or portfolio is a substantial commitment but can provide many benefits, if managed correctly and thoughtfully.
Owning an investment property or portfolio is a substantial commitment but can provide many benefits, if managed correctly and thoughtfully. According to landlord insurance specialist, Terri Scheer Insurance, concerns over unpaid rent, unoccupied property and unruly tenants rank the highest among worries that concern landlords.
Here is a list of a landlords top 5 concerns:
Concern 1: UNPAID RENT
Concerns over rent being paid on time can become a major stress point for property owners relying on the income. Typically, with Industrial property it’s not the first mortgage owners have but a second or third and they rely on timely payment to ensure their financial situation is not disrupted.
Brianna Jacobs, Rutherfords Real Estate Property Manager said “If the tenant falls into arrears, a breach notice will be sent for non-payment of the rent. If the tenant still doesn’t pay rent after receiving a second notice steps will be taken to default the tenant and lock them out of our landlord’s property.” She continues to explain “We minimize any circumstance where our landlords might be stuck in a difficult situation by having proven methods in place to handle situations like this. Usually we can tell if a tenant is not a good applicant in the screening process.”
Concern 2: THE PROPERTY BEING VACANT
Having a rental property vacant can have a significant strain on an owner’s cash flow. This can be combatted by presenting a well-managed to help broaden the pool of prospective tenants, reduce time and money spent on advertising. Listening to your Property Manager and their feedback from inspections with potential tenants can help gauge if the property is properly priced or if there are any aspects of the property that can be improved or added to appeal more to a potential tenant.
Concern 3: PAPERWORK
“There is a lot of paperwork that goes along with being a landlord and anything left unchecked can severely impact you later if you’re caught in an awkward situation” Brianna explains “a good property manager can save landlords many headaches by managing the administrative side of the investment for them and ensures their property is up to date with current legislation.”
realcommercial.com.au conducted a recent study that showed 4 out of 10 portfolio owners self-manage their portfolio. This leaves room for error and many of these landlords are not managing their property professionally to maximise their return or minimize their risk of non-compliance with current legislation.
Concern 4: MAINTENANCE
Every lease varies with maintenance responsibilities in the industrial industry and much of the maintenance can be looked after by the tenant if stipulated in the contract by the leasing agent. Drew Williams, Director at Rutherfords Real Estate explains “if you use an agent who has experience in these kind of negotiations you won’t be stuck paying for maintenance issues months or years down the track. It’s essential to make it clear from the beginning so you are not stuck with these costs later on”
Concern 5: UNRULY TENANTS
As much as you pray as a landlord you do not have such tenants occupying your property sometimes you get the raw end of the stick. Brianna Jacobs explains “While majority of our tenants do the right thing there have been situations in the past where a small minority have violated their lease agreements by behaving poorly to even undertaking illegal activity in the property. We combat this by conducting routine inspections and identifying these problems before they escalate.”
Knowledgeable and experienced experts in the industry are essential to ensuring you no longer have to worry about such concerns regarding your portfolio. Taking the responsibility out of your hands and entrusting it with professionals will give you and your family the peace of mind they deserve.
