Common Mistakes Property Owners Make and How to Avoid Them
Find out some of the most common mistakes property owners make when it comes to renting out their property.
Owning an investment property can be a very rewarding experience but like any business, it requires following best practices to help to ensure it’s a successful venture. In this article, we’re exploring some of the common mistakes that property owners make and how you can avoid them.
Pricing the Property
One of the most common mistakes that property owners make at the beginning of their self-management journey is in the advertising stage. Understanding the market rates for the area a property is in is crucial to success. If a property is priced too high, it’s likely to stay vacant for longer resulting in lost income.
Holding out for an extra $20 per week is usually not worth the longer vacancy period. In the case of a property renting for $500 per week, two weeks of vacancy would result in a rental loss of $1,000, which is also equal to $20 per week.
Determining the right price for your property can be tricky. Find out how much weekly rent you can expect for your property through RentBetter. We’ll instantly deliver you a full report, including property information and up-to-date local market data.
Get your free rental estimate report here.
Tenant Screening
The tenant importance of the tenant screening process is often underestimated by property owners. Choosing the wrong tenant can have a huge impact on your investment property, earnings and experience as a landlord.
It is important to screen tenants thoroughly before signing a rental agreement with them because it can save you a lot of time and money in the future. Failure to complete tenant screening before signing a rental agreement can cause lost income from unreliable tenants who don’t pay the rent or damage the property. Something that no landlord wants!
On RentBetter, you can run a comprehensive digital tenancy check for only $25 (or $18 if you’re a customer).
RentBetter uses the National Tenancy Database, the market-leading solution by Equifax to check the background of your prospective tenant. This is the most extensive database of tenant information in Australia.
Read more about Tenant Checks.
Repairs and Maintenance
When you don't have to deal with rental property maintenance and repairs on a daily basis, it is tempting to put them off. If left unattended, a small repair problem today can snowball into a huge bill later.
It can also be a costly mistake that may cause tenants to move out, leaving your property vacant, thus hurting your pockets. Responding in a timely manner shows that you care - If you look after your tenants, they are much more likely to stay on in your property longer and treat with greater respect.
To help property owners stay on top of maintenance, the RentBetter platform allows owners and tenants to upload maintenance requests and track their progress. You can even hire a local tradesperson to complete the job and ensure everything stays up to scratch.
Read more about how maintenance is handled.
Rent Increases
Understanding when the right time to do a rental increase can be a challenge. Increasing the rent every 12 months without any financial argument for an increase can push out good long-term tenants from your property.
As a landlord, you should of course be reviewing the rent on your investment property and respond to all major changes in the rental market but it should be done so with care.
The goal of regular rent reviews is not about being greedy, but to be practical. As well as all the normal expenses that come with owning a home, investment properties often require renovations and repairs so it’s important to maintain the rent at an appropriate level.
Read more about Rental Increases.
If you’re using the RentBetter platform to manage your property you can keep track of your rental history and adjust your lease and any rental rate changes online. The system will notify your tenant when you want to make a change to the rent which they are able to accept with the click of a button.
Vacancy Periods
Owning an investment property means ensuring you have done your financial due diligence and can pay the mortgage in the event you don’t have a tenant in your property.
While the cost of living tends to increase each year, don't risk financial ruin because you failed to do a cash flow analysis and maintain sufficient funds to cover the mortgage payments when your property is not tenanted.
Rental Inspections
It's understandable to be nervous and wary, especially if you’re a first-time landlord - you want to ensure your tenants are taking care of your pride and joy! But there are limits to the number of inspections you can do throughout the term of the tenancy.
Ideally, you want to be doing two inspections throughout the year - once every 6 months. This should be more than enough to ensure that your property is being looked after and you’re not missing any maintenance or repair issues.
See our state-by-state guide on the number of routine inspections you can conduct for your property.
Inspections are facilitated through Condition Reports which record the state of the property at the beginning, middle and end of the lease.
There are two ways that you can do your inspections through RentBetter:
- by completing a digital condition report yourself inside the platform, or
- by hiring a professional to conduct an in-person inspection for you
Find out how you can book an inspection for your Property Condition Report.
Lease Terms
Whilst periodic (month-to-month) agreements offer flexibility for both parties, they are more uncertain with the tenant able to leave at any time. For most property owners, it’s wise to lock in your tenants for a fixed period to ensure that you have a stable income.
Fixed term agreements help by enabling you to budget for expenses and any rent increases can be pre-written into the tenancy agreement.
You can also ensure that you end your agreements at a time when the market is at its premium, thereby giving you greater control.
Create, view, send & sign your lease agreement online via RentBetter.
Easily enter your tenant’s details and the lease terms, then click a button to send a copy directly to your tenant. Both you and your tenant will be able to digitally sign your lease and have things sorted in minutes.
You’re in Control.
One of the major perks of self-managing your property other than the financial benefits is having complete control of your property and how you do things. When you’re first learning the ropes it can certainly feel overwhelming to know how to handle different aspects of your property.
RentBetter is here to help property owners and that platform has all the features you need to manage your investment successfully. You’re not alone either - our friendly team are on hand to help with advice along the way.
To find out more click Get Started and sign up for free!
