Thought I'd put together a list of the Top 5 Landlord mistakes – and would like to hear from other landlords what lessons they have learnt from their experiences.
1. Not treating IP like a business. If you own an IP, you own a business.
2. Poor selection or improper screening of tenants.
3. Accepting late or partial rent payments (…and believing the 'excuses' given)
4. Undercharging rent vs market
5. Ignoring or delaying maintenance (small problems generally only turn into big problems!)
guilty of 3 & 4May I suggest a couple of things from the point of view of being a tenant? We are ex-home owners and investors and on the sidelines doing the wait thing. This forum is helping us tremendously so thank you everyone.
1. Taking advice from rental agents that you should only go with 6 month leases. We are good tenants, but don't even bother to look at a property if it has a 6 month lease. You'd have to be desperate, and lower quality tenant, to go with a 6 month.
2. Having an agent who seems to work hard for you, but actually treats the tenants like vermin.
Case in point – (just 1 example in a sea of blunders) front door lock failed on way to important job interview. House fairly open to busy street. Had to cancel interview and wait for 2 days for a locksmith who was always "just 5 minutes away".
I guess the poor old first IP buyers of this particular place will never know why their tenants don't renew their leases.
Lesson: analyse the language of the agent regarding tenants. What comes out of their mouths is also what tenants hear.
Hi Singer
I hear what you are saying but I would never sign a new tenant on for more than 6 months. As a landlord, it is too hard to get rid of difficult tenants so I only ever sign on initially for a maximum of 6 months (in Darwin, my initial lease is for 3 months). If the tenant is good then of course I extend the lease and don't normally up the rent. If a new tenant said to me (or my agent), it's 12 months or it is nothing, then I would let that tenant walk, no matter how good their references are.
Cheers
K
I'm a tenant and am getting sick of the agency trying to lock me into a new 6 month term. I feel I already served my time in the original 12 month lease, I have had a rent increase, but won't agree to any additional time locked in. If they insist I will look at moving from the property.
Matt, the lease is a double edged sword – in the first instance it gives the lessor the benefit of the knowledge that you will be hanging around for another six months, not leaving on a month's notice and for yourself, it means that you don't have a rent review during that period (unless you have agreed to one) and you can't be kicked out for another six months. If you have no intention of moving within the next 6 months, it shouldn't be an issue.
I always get my PM to sign the tenant up for a new term irrespective of how good their track record has been (or if I don't want them them to continue, have notice served at the appropriate time).
Hi, Is it not true that if you have to make a claim on your Landlords Insurance, you need to have a current valid lease agreement? This could be another reason why landlords like to get the tenant sign a new lease.
I have just returned from inspecting my IP at Redcliffe. The tenants moved out without doing any cleaning, leaving all unwanted stuff and rubbish behind, having not ventilated the house have got mould on the back verandah ceiling. I understand the agent has claimed all the bond but not received payment yet, signed up a new tenant and although new tenant demanded the property be cleaned before they could move in, was not done. Being the Easter weekend, the office was closed, I handed the tenant the key on Saturday and was disgusted in the way the property was handed over. I take pride in letting the IP I manage myself in top condition always freshly painted and everything in working order. The property was vacant for a whole month. I blame myself for not getting up there earlier and taking the agents word "There's nothing that needs doing for it to present well" Far from the truth.
I should have also gone there for an inspection during the lease term and raised concerns instead of taking the agents word.
The front hand rails that were freshly painted over a year ago was rusty, the front picket fence falling apart, the grass two feet high The hinge of the gate leading to storage under the house had the long screws taken out and missing, Not to mention the mould on the ceilings – How could the agent have been looking after any one else's interest but their own. Everyone knows that a well presented property will attract a better tenant willing to pay decent rent.
Lesson learned, inspect all managed properties in person to ensure tenant and agent are doing what they are supposed to be doing.Hi All,
After just having an experience similar to michaela_alvares, I'd like to add mistake number 6; not having a good property manager !
We 'inherited' the property manager when we bought the property, and given that we were new to the area kept them for a period. The tenant's just moved out without paying the final couple of weeks rent, the place was filthy, broken windows, furniture left behind, bottles and cans of beer left in the garden. Our agent 'didn't know anything about it'. Not surprisingly, we went up to the area, interviewed other agents and have just appointed a new one…..
If you're investing outside your local area, and can't keep an eye on your investment, your property manager has to be your eyes and ears. Make sure they look after YOUR investment.
Yes, I believe not having a good property manager is a great one that some landlords do go through.
I can't count the amount of properties I have had come to me that need a Property Manager that can actually do their job! This is why what you need to do is ask your Property Manager to take photos at the property and send to you if your not local to the IP.
If you are interstate, ask your Property Manager to take an external photo at their Routine Inspections and to take photos when the tenant has vacated. This way you will always know what it looks like.
When you call your Property Manager I have seen way too many times that the Property Manager will confuse some properties. When you think about it Property Managers standard of portfolio is about 100-150 properties… It is hard to remember each one. Having said that though, if the Property Manager has just completed a vacate there as the owner in Redcliffe, then it should be fresh in their mind. So they should know which property they are talking about.
Although, I believe there is a NUMBER 7 to be added to the list…..
7 – Not having adequate insurance (building and landlord) on their properties. Landlord insurance isn't that expensive and covers your for if the tenant abandons the property, damages the property, leaves owing rent, cleaning still remains and the list goes on… Think about it… The bond on a property is only 4 weeks rent, if the tenant leaves owing 3 weeks rent and didn't clean the place, it's going to cost more than 1 weeks rent to clean it. That's where Landlord Insurance steps in.
Do some research on your Property Managers before you pick them too….. soemtimes the agency might have a less name than the others, but there is a couple of good property managers there… Remember bad news travels faster than good, so research properly.
mouldy ceilings sounds more like a leaking roof than something a tenant may have done.
The rusty handrail is more likely poor surface preparation or no priming of welds.
Picket fence falling apart is again most likely age or lack of maintenance.
How are these items the fault of the tenant or the manager?
Many landlords on here expect to just sit back and accept the rent without having to do basic maintenance on the properties.
Landlords insurance is only as good as the company behind it. I am arguing with a company regarding damage to carpets. i have full landlords building and contents insurance and the company in question will not replace the cigarette burnt, motor oil stained carpet as it terms it "dirty living"
I agree that not doing your own inspections is just asking for trouble.
Cheers
guilty of 3 & 4
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