Priorities of Any Landlord
Landlords dream of high rental yield and a positive cash flow for their properties. While there is nothing wrong with having a landlord’s appetite, it is important not to err along the way and keep focus on the priorities. We have seen ample instances of landlords failing to do the right things. Let me take you through a few mistakes that the fraternity will do well to avoid.
High rent/low rent trap
Landlords often get lured into the trap of “high rent”. While high rent can definitely boost rental returns, it may also increase the vacancy period. Similarly, giving lease incentives or decreasing the rents far too much may affect the cash flow.
It is significant to get the landlord-tenant rapport established but at the same time a landlord must disengage himself emotionally from his tenant. It is important to be forthright while giving the tenant’s conduct diary and talking about the the protocols that the tenants must observe.
It is also important to ask the tenant to conduct his own inspection and bring any irregularity that he finds on the table before cutting the deal. This prohibits a tenant from saying something like this on a later day, “I found that your window panes are broken.” or “I find that your toilet-flush is not operating.” Oftentimes, tenants damage a certain fit-out and blame it on the landlord. The pre-lease inspection prevents this scenario.
I always recommend thorough landlord insurance. Such insurance must cover third-party injuries via liability insurance, property against theft, arson, and vandalism and also cover rental arrears in case of a defaulting tenant. It may be a crucial mistake not to rope in such insurance.
I have also found many landlords attempting to manage their own property in a bid to save some money. This can be suicidal. After all, property managers are professionals and they are well-versed in the intricacy of managing your investment portfolio. Do you expect to know all about maintenance, repairs, rental arrears, local council mandates and what’s more- have you got the time to manage your property?
Buying a property and giving it out on rent can be lucrative but not if you do not consider the above issues.
Do you employ a property manager?