First time investors are often nervous about the prospect of owning an investment property. Of their concerns and worries not having a tenant is one of the biggest concerns.
We have all heard the rental horror stories yet in my own experience and in my experience working with clients in the investment sphere the last 16 years horror tenants and experiences are the exception, not the norm. Providing you get the 7 key steps right.
If you get the key 7 steps right owning a property should feel no different than your life did before you owned an investment property. You should literally almost forget you own one (two, three or five). (At least that’s how I feel anyway…until tax time! I hate paper work!!!!)
So let’s look at the key areas where things go wrong and what you should experience if you are on the right track.
If the correct asset has been selected and the right area pinpointed rental vacancies should be no more than a week or two each time a tenant moves out. Add a top tier property manager to the mix and in many cases you will have a new tenant ready to move in before the old tenant moves out
As a landlord you should expect some minor and some more significant maintenance items to occur during a 10 year period of owning your investment. They should not be an issue for you providing you have adequately planned for your investment purchase and factored these costs into your projections right form the beginning and in many cases these items can be foreseen and often avoided.
Here are the common maintenance issues you should expect during the life of your investment property:
- hot water heaters breaking (if old when property was purchased)
- upgrade to electrical circuit board and installation of safety switches
- doors/Windows sticking and jamming (due to movement in the house)
- air con’s and gas heaters breaking
- leaking taps
- stove/oven knobs broken or stove/oven stops working
- leaking roof
- leaking eaves or down pipes
You can avoid or at least minimize many of these items by selecting a good property from the beginning. Of course if you pick up an absolute bargain knowing what maintenance lays ahead of you and you have planned for the expenses this is great too!
In many instances you will be able to plan ahead and know roughly when to expect some of these expenses to arise. If you don’t know speak with your property manager and ask them to conduct a “future maintenance” inspection for you.
Another money drain is tenants who ask for and complain about a lot of things expecting the landlord to provide them. To ensure you are not spending money on your investment unnecessarily It’s always a good idea to ask the property manager if you are required by law to attend to the maintenance request or if it is a “nice to have” item. You are under no obligation to provide ‘nice to haves” and unless you are giving it to reward./thank a great tenant or because it will add value to your property or the rent its best not to do it at all.
These two items (rental vacancies and maintenance issues) are the two areas which cause the most headaches and drain finances for investors.
They are a part of being a landlord, however they shouldn’t be so time consuming and financially draining that you feel that property investing is a negative experience.
In reality you should hear from your property manager a few times per year at most. If there are ongoing problems the two key areas I find are usually contributing:
- Poor property management (or self management)
- Poor asset selection in the beginning
Both of these are easy to correct so you can get your investing back on track. If you have poor property management fix this by learning how to manage your relationships with property managers better and how to interview and what to look for in a property manager.
If Poor Asset Selection is the cause you have two options.
- Consider if you can turn the property into a better class of property and if that will resolve the issues keep the property.
- Cut your losses, take the learning with you and buy another property with the new acquired knowledge you have learnt through this experience. (Or have a professional assist you next purchase).
If you are yet to purchase an investment you are in a great position because you can get help (or education) right off the bat to ensure all of these factors are minimized right from the beginning.
Property Investing should be a breeze most of the time if done correctly from the beginning and managed properly throughout the process. Learning how to manage and maintain expectations , boundaries and having clear communication goes a really long way to a great experience also.
To ensure your experience is a breeze make sure you;
- Choose the right property in the right area
- Select outstanding managers to manage your investment
Let’s get together
Ready to discuss how we can make home buying or investing in property a breeze for you? Fill out the form below and our team will be in touch with you shortly.