When a landlord has decided to start the property journey, they must be ready to invest a lot of money, time and effort. This will apply whether one has invested in an income-generating rental property or as an owner letting their property. It could also be a spare room in the home or a garden cottage.
Property is a long-term investment; if managed correctly, it will become a resourceful foundation for creating wealth for future generations; however, this process takes a while. An investment property can pay for itself when the landlord has repaid the bond or if the property market booms. But, landlords should also consider that the income they earn from the property will be affected by the rising interest rates, insurance, maintenance and repairs.
Repaying the bond is only one of the costs of having a property. Funds should also be available for general upkeep, protection, rates and taxes. Planning well for these expenses will help allocate and keep track of the property expenses, leading to easy payments of taxes. In addition, it is always a good idea to have savings which will be issued to the property for any emergency.
Not only does a landlord have to consider the financial aspect, but also the legalities when renting out a property. It is imperative that the landlord and tenant must understand the lease agreement before signing this legal document. All details entered must be detailed and correct, such as the property address, lease start and end dates, and the annual rental escalation percentage. The landlord must also present the Body Corporate rules to the tenant. Misconceptions of a lease agreement’s clauses can lead to disputes and financial loss.
Furthermore, the landlord is responsible for doing a thorough walk-through of the property with the new tenant before handing over the keys. The incoming inspection should consist of a detailed checklist and clear photos of all the snags in the property. A few examples a landlord should note are the state of the plugs and switches, any water leaks, and whether the oven and stove are working. Once the inspection is done, the report must be signed by both the landlord and tenant. Without a signed report, the landlord cannot claim any damages at the end of the lease period.
It can become tedious for a landlord to remember all the checks that need to be considered. Luckily, a landlord can turn to a rental management agency for assistance, and Preferental can do just that. When signing up with Preferental, we will be happy to assist with the following:
- Listing and advertising of properties
- Comprehensive tenant vetting
- Lease agreements
- Monthly invoicing
- Guaranteed rental payments on the first of every month
- Eviction cover and professional lawyers
- Property damage payment benefit
Using a reputable property management company is always advisable if the landlord is a first-time landlord and still needs to catch the drift of the property game. Preferental provides peace of mind knowing that the landlord’s property is taken care of with minimum risk on the horizon.