Being a landlord isn’t just a case of sitting back and picking up the rent on a residential property. There’s a lot more to it, including legal compliance obligations. Below are the top 5 rookie landlord mistakes that we see in Greater Springfield (and how you can avoid them).
1. Not hiring a professional property manager
Professional property managers manage rental properties for a living. They keep up to date with the legal compliance requirements of landlords and lease agreements. When you hire a property manager, they can take care of important but time-consuming tasks for you. For example:
- Sourcing high-quality tenants,
- Preparing lease agreements,
- Ensuring tenant rent is paid on time, every time.
- Communicating with your tenants on your behalf,
- Doing regular property inspections,
- Organising for any necessary property repairs and maintenance to be done (with your approval) by high-quality tradespeople, and
- Retaining high-quality tenants.
The alternative is to do all these time-consuming tasks yourself. However, a good property manager will save you time and hassle. You should think of hiring a property manager as an investment rather than an expense, especially if you value your time and you want to ensure your legal compliance.
How to avoid this landlord mistake: It’s easy. Do your research and hire an experienced and local investment property management service, like our team at Purple Cow. We’re based in Springfield Lakes.
Not understanding the local market
This is especially important if you’re an out if town or interstate property investor who has bought (or is thinking of buying) an investment property in the booming Greater Springfield region in South East Queensland. You need to know local market conditions like current rent rates to maximise your ROI.
How to avoid this landlord mistake: Once again, a local Greater Springfield like our team at Purple Cow will always have the latest rent rate information at their fingertips to help when it comes time to draw up or renew a tenant lease.
Not having fixed-term leases
Fixed-term leases provide you with a guarantee of income (usually for six of 12 months).
How to avoid this mistake: Unless there is a very good reason not to, opt for fixed-term leases over the alternative of having a shorter term, month-to-month lease. They are usually more attractive to tenants anyway in the current housing crisis.
Not budgeting for repairs and maintenance
Keeping your property in good condition will not only help you to attract and retain good quality tenants, but it will also help in terms of the amount of rent you can charge and the market value of your property.
How to avoid this landlord mistake: Set aside a percentage of the rent you receive (say 10%) into a separate account for repairs and maintenance on your investment property. That way, you’ll always have funds available if or when you need them.
Not taking advantage of all the tax breaks
Any expense (including repairs and maintenance) on a Greater Springfield investment property is tax deductible. It’s crucial to remember that when you do your tax return, otherwise you’ll pay more tax than you should. Other common and tax-deductible investment property expenses include property manager fees, loan interest, council rates, insurance and depreciation.
How to avoid this landlord mistake: Make sure you get an accountant to do your tax return for you to maximise your eligible tax deductions and your ROI.
How our Purple Cow property management team can help you
If you have an investment property in the Greater Springfield area (or you are thinking of buying one), we would love to manage it for you. Or if you are keen to buy one, we can help you to find the right property and tenants to maximise your return.
Contact us today to find out how we can help you.
