Mistakes when managing rental properties all to easily become costly for landlords. Below we’ve outlined what mistakes you can prevent, helping you avoid unnecessary expenses and improve the cash-flow in your Wellington investment property.
Not Attending Repairs
As landlord, you hope tenants will look after your property and keep it in good condition. But wear and tear does happen over time, especially if you’ve invested in an older property.
When repairs aren’t attended to early further damage inevitably occurs, creating frustrated tenants and a bigger bill. After all its significantly cheaper to replace a roof, than it is to replace the roof AND pay for the extensive water damage throughout the property from the ongoing leaking. Also be mindful that landlords can be fined of up to $4000 for failing to meet their obligations in respect to maintenance, smoke alarms or insulation under Section 45 (1A) – another expense you'll be keen to avoid.
Being Too Trusting
When it comes down to it, you’re letting strangers live in your investment property. Yet reference checking seems to be the process most skipped by private landlords. Finding great tenants is essential to your property being well looked after (reducing maintenance costs), ensuring rent is paid on time with no rent arrears occurring, and finding people who will be easy to work with when it comes to maintenance and property inspections.
After interviewing tenants at property viewings, our showings team make recommendations of people who have shown interest in the property. We then immediately triple reference checks and credit checks the applicants to ensure they have good character, a positive financial history, and have had no issues with previous landlords.
Relaxing on Admin
You’d never run a business without at least one spreadsheet, the same should be with your property portfolio. Being relaxed about admin can lead to big expenses and losses that could have been foreseen if you had a spreadsheet. Maintaining an updated spreadsheet allows you to identify rent arrears, keep track of expenses, follow the property’s success as a rental, and know when you can next adjust the property’s rent. Our systems take care of admin from checking rents received to recording maintenance costs and documenting inspections.
Not Knowing How To Draw The Line
Repairs are expected and necessary in investment properties. However sometimes people expect more, and demand what most would consider as luxuries. When the line has been overstepped, a good approach is simply contacting the tenant and politely explaining the situation. Most tenants will be considerate of your perspective, some might even know they’re asking for more than is reasonable.
Failing to Adjust Rent
In a market where rents are rising, and where rents can only be increased every 6 months, naturally a large percentage of tenants will be paying less than the current market rent. Section 24 allows rent to be adjusted every 180 days, enabling landlords to once again be able to achieve the best rent from their property in the current market. Our Quinovic team conduct a rent review on all properties every 6 months to ensure our owners are receiving the best rent in the current market.
Expenses happen, but there will always be a way to minimise them. None of our tips are huge or difficult to follow, yet together they can significantly reduce your expenses, creating better cash-flow and a more successful investment. A constant and disciplined attention to detail ensures the best outcomes.