10 Myths About Investment Properties – Did You Know?
When it comes to rental properties, there are common misconceptions for both owners and renters that can prove costly or embarrassing without the right knowledge in place.
To make it easier, we have broken down our top five for each. Let’s start with owners.
Property managers don’t set the rental market. They can give you their best estimate of the rent that you could reasonably ask for, but this isn’t a guarantee.
The rent is set by the demand of the prospective tenants out there. Your property is only worth what someone is willing to pay for it.
Professional agents use recent local examples to come up with an estimated rent, so if you think your property is worth more, it’s your word against the data! Set an asking price too high and you could end up with a costly vacancy period.
Property managers are not qualified trades. So when they conduct inspections, they can only report what they see. If there are visible problems, like damaged walls, they will sort you out. And rest assured, a good manager will be thorough, you only have to look at their inspection checklist to see how detailed they get.
However, they don’t have X-ray vision and are therefore not going to spot a leaking pipe through a wall, so expect professionalism, but not miracles.
If managers find maintenance issues they will let you know ASAP. This doesn’t mean you can pick and choose whether to have the maintenance done. Owners have a legal obligation to make sure the property is in working order, safe to live in and up to the standard signed off on in the lease. And remember, quotes aren’t free. Tradies charge you for their time just like everyone else.
Property managers aren’t your accountants or bookkeepers. They can only pay bills if they receive them and there are sufficient funds to pay by the due date. Managers are also unable to force your tenants to pay on time or ask them to pay in advance.
If you have a strata property, you are not as free to make decisions as you would be in a freestanding house. Body corporate by-laws are just as important as legislation. You can’t simply approve pets, or renovation work, there are approval processes that you must satisfy.
Your rent is payable on or before the due date. It’s important you understand this so you’re never late with rent. Your rental payment history will affect your ability to get a loan in the future, as tenancy ledgers are often requested by lenders during the application process. It may also affect your ability to get another rental … tenants with a spotless ledger will always be given preference over those with a history of late payments. Remember to allow for public holidays, bank holidays, or even online system outages, which may delay your transaction.
Not all upkeep is the owner’s responsibility. Tenants renting someone else’s home must keep it clean to the same standard it was when moving in. So grab the vacuum and duster, but don’t forget window glass, tracks and ledges, light switches, taps, walls/architraves, skirting boards, ovens, door handles and door faces/ledges, toilets (around the hinges and behind the cistern), showers and baths. Without regular cleaning, these items can deteriorate badly and may need to be replaced at the end of your tenancy at your expense.
Having carpets professionally cleaned regularly will help keep them up to standard, while it’s important to remember the outside counts as well. Upkeep of lawn, gardens and other outside spaces is part of the deal.
You are not alone. Property managers are actually here to help. If you have concerns or minor issues that could become major ones later – whether maintenance, or financial hurdles in your life – flag them right away. It’s better for all parties if you are honest and communicate freely so problems can be ironed out. Remember, it’s a condition of your contract that you report damage/maintenance ASAP and in writing except in the case of an emergency.
Agents don’t own the property. So when you make a request, a property manager passes it on and then has to wait for an answer from the landlord. As soon as they know, they’ll let you know. And managers are humans too, so even if frustrated, try not to lose your cool. Some situations may be sorted out faster than others. Also, ‘improvements’ you make without permission are in breach of your tenancy contract. Remember to seek permission before installing that gate.
Don’t move animals in without receiving written approval from the property manager on behalf of the owner. This could be a breach of your contract and could end in your pet being evicted, which is a heart breaking outcome for tenants. Some strata/body corporates don’t allow pets at all, so seek information and permission first.