#1 – Not conducting a thorough reference check:
Failing to carry out a thorough reference check on potential tenants is a common mistake people make when self-managing their investment property.
Whether the applicant is a friend of a friend, or they have put in a good application (or so it seems) there is no reason that you should not be thorough. This means checking their rental history and references. By doing a property background check (digging deep) you can avoid problematic tenants who may not pay rent or time, damage the property, or not comply with their Residential Tenancy Agreement.
Could you identify a fake reference? Having a licensed property manager managing your property is worth the investment – they have the experience, software access and ability to properly screen applications for your investment property.
#2 – Not keeping correct financial records:
It’s not enough just to have a date and amount when recording rent payments. Avoid confusion later on and record your financial records correctly from the start. By not keeping a correct tenant ledger (records of rental payments) you are in breach of the Residential Tenancy Act. Another thing that seems to be overlooked is keeping an accurate record of maintenance work carried out at the property. At tax time having all of the income and expenses recorded for the property makes your accountant’s job that much easier (and yours).
Our property management team at South Coast Realty use outstanding software so that you can access your financial records when you need them.
#3 – Not responding to tenant requests in a timely manner:
Failing to act on maintenance requests in a reasonable time frame can cause friction between the Landlord and the tenant. If you have a really good tenant, it may even cause them to move on from the property. You could also be in breach of the Residential Tenancy Act. Many Landlords do not have a thorough understanding of their obligations in regard to responding to maintenance requests and it can end up resulting in communication and access issues between both parties.
At South Coast Realty we have software that allows for maintenance to be reported by the tenant, our property management team send it off to the owners for approval (and we follow up if we don’t get a response in a reasonable time frame). Unless of course it is an emergency we don’t approve the required works without the owner’s permission. We then organize for approved suppliers to attend to the request. It takes the stress out for Landlords and keeps the tenants happy as they don’t have to wait for their requests to be followed up. It’s a win win.
#4 – Not conducting regular inspections:
Not carrying out regular inspections can lead to major maintenance issues. By inspecting the property regularly, it gives you the opportunity to notice minor maintenance. By acting on these issues early it not only stops them from being a major issue, but it can also save you money as well.
It’s not only maintenance that inspections are useful for. They also give you the opportunity to notice any other issues with the property and the tenant (such as unpermitted pets, damage to the home etc.).
We carry out inspections on our properties 3-4 times a year. When we sign up a new tenant, we advise them exactly what is expected of them when we inspect the home. They are reminded about their obligations when they receive notification of their upcoming inspection. We also provide our clients with an inspection report alerting them to any potential maintenance or issues.
#5 – Not having sufficient insurance (or worse – no insurance at all!)
If you don’t have the correct Landlord insurance and building insurance, then you could potentially incur a major financial loss if your tenant is hurt, or your property is damaged. Fires, flooding, and storm damage are surprisingly common.
Properties can be damaged intentionally or unintentionally by tenants as well (reference check anyone?) which makes having the right cover imperative.
The South Coast Realty Property Management team can provide you with current insurance suppliers who specifically cover investment properties. Be sure to check the fine print of your insurance to make sure you have appropriate cover.
Are you a landlord who is making one of these common mistakes? Maybe it’s time that you invest in your investment by contacting our property management team today.
