First time landlords

If you could, what would you tell your ‘pre-landlord self’?

If you were to have your time over, there may be a few things you would do differently to save yourself some stress and/or money. However, would it be fair to say that ensuring you have the right team in place, with the right information, from the start, is what sets you on the right path as a landlord?

Tips for first-time landlords:

1.  Understand tenancy laws. Australia has state-specific tenancy laws, so it is a good idea to familiarise yourself with the tenancy laws which are relevant to your new investment property. There has been a rise in the number of interstate landlords, so it is important to understand that what might be law where you live, may differ where your property is located.
2.  Surround yourself with a good team. You will no doubt have done your due diligence when in it came to the purchasing of your property, gaining the right advice and professional help when required. For such an important investment, extending that professional advice to the management of the property will help ensure your property is working positively for you. Property managers have a wealth of experience, knowledge and tools at hand to successfully help manage a property from vacancy through tenancy and everything in between.
3.  Make sure your insurance is right. Ensuring your property is correctly insured should be one of the first things you do. As well as building insurance, do your due diligence when it comes to landlord insurance. No two policies are the same and it’s important to consider what is and isn’t covered to determine if the right policy is in place. Common terms of landlord insurance include loss of income, rent default, damage to property – either malicious or accidental, and natural events – such as floods, storm or bushfires – rendering the property uninhabitable.
4.  The right marketing can make a difference. Finding the right tenant for your property is important, after all you want your property leased as quickly as possible and cared for by the right person. Determining your tenancy pool and following through with correct reference checks is vital and is a process in which your property manager will follow thoroughly. Tenancy agreements should cover all aspect of the property and what is required.
5.   Get organised early. Good record keeping from the beginning is important. Set a process which works for you and stick with it. Not only will it make information easily accessible for review, it will also help streamline processes if/when required. Engage with your team – property managers, accountants, financial advisors etc – to confirm important dates and what is required to ensure the administration side of your landlord business is kept up to date.
6.  Following on from that, consider your property a business. It can be easy to let the emotional side of renting your property to others become an emotional one. You want your property to work for you and ideally generate an income, so it’s important to carefully consider your expenses to ensure you are not overcapitalising on the property. There will no doubt be expenses you will need to make to the property to keep it to a standard, be aware of what can and cannot be claimed as a deduction come tax time.

Becoming a landlord for the first time is an exciting step – it often marks the beginning of your property portfolio journey and often the purchase of an investment property will be but a small step in an otherwise long-range forecast wealth/retirement plan.