The purchasing of investment properties remains the practice of those with a bit of capital and the ability to access home loans. Once the investment property has been purchased most owners offer it up as a rental because in this way they can cover their home loan repayments or use the rental as a source of passive income.
Sounds great right? Well, it is but it’s also hard work and you must find the right type of tenant
Many people are unaware of just how much of your time a second investment property can take up.
Screening your tenants is crucial to your sanity. Stories of bad tenants abound on the internet and speak to any rentals agent and the will tell you the veritable horrors they’ve had to deal with. Tenants aren’t likely to look after your property the way you would. If they happen to have some personal finance issues or family problems you never know if they are going to up and leave in the middle of the night. A bad tenant will tend to allow furnishings to become delapidated and structural damage to occur before letting you know about it. Trying to prove that the damage is their fault or having them replace furnishings is a difficult undertaking. Of course, there are some tenants who are great and will look after everything as if it belongs to them. Finding these tenants is the challenge.
Rentals agents can assist with finding excellent tenants
Making use of a rentals agency to vett the tenants, draw up the lease agreement and run the mandatory checks is ideal. They will handle all the paperwork at the beginning of the lease agreement, draw up the inventory list and conduct the suggested six month inspections on your behalf. Also, they are well connected to those who can advise you if things really become nasty and you need to remove tenants or chase for your money.
When having a rental property you also need to have expendable money available for any emergencies
And the emergencies can come quick and fast at times. Replacing a geyser, oven or resealing windows for example are not cheap reparations to make and you cannot get away with a quick fix. If the tenant complains about something in the property that is causing them distress or lack of comfort the onus is on the owner to fix it. Alternatively, a proactive tenant will fix the problem themselves but demand the money to be returned to them as the expense is certainly the property owner’s issue.
We have only unpacked a couple of the concerns that investment property owners face when renting their properties out but there are many more to consider. You can read more about being a landlord here.