Questions For Your Existing Investment Property
In the last 18 months or so rental returns have come up a long way. Yet, many landlords, unaware of the situation keep charging rents a lot below market standards. I know a few people who are happily paying meagre rents praying each day that their landlords do not come to know of the existing market rates.
This is not the only aspect which a landlord should be informed about. In addition, he should know everything about the tenancy agreement, history of rent payments, council compliance reports and so on. The job is willingly undertaken by a property manager if you have employed one. If not, it falls within your ambit of diligence. Let me take you through a few facets of landlord-ship.
Comparable rent report
As a landlord you should get deep into data which shows a comparable rent report for your neighbourhood. It will give you an idea of the existing market rate for rents. You can jolly well go up to the tenants and seek a rent hike from them if you think you are undercharging them.
History of rent payments
Have you taken time to understand if your tenant has been good with the rent payments so far? Is he an individual who comes up with a dispute every now and then? He might just be a case of “tenant hardship”?. However it might pan out, things will only be resolved once you make it a point to learn about them.
Frequency of inspection
It is a landlord’s duty to inspect his property every so often. In case he fails to dispose off this duty well he will find deterioration rapidly creeping into the property. Unanswered maintenance and repair concerns open roads to structural weaknesses in an investment property.
You might also suffer from nefarious tenants who do deliberate damage to your property. However, to take them to task you will first need to look around your property. The more regularly you do so the better.
Sometimes we are lucky to get long-term tenants who pay fixed rents and do not cause any friction. If you are not that lucky, you will have moving tenants. They will keep coming and going. The idea is to keep a very low vacancy rate. This is achievable if you manage the vacancy well and do your bit to entice new tenants.
You must have your investment property adequately insured. Such insurance should include both property and liability insurance. The idea is to cover yourself for any accidental third-party damage too apart from the general run of losses.
Have you done your bit of research on your tenants?