PROPERTY INVESTORS – MANAGE RISK, PROTECT ASSET

Investing in property has the ability to improve your bank account — but as a landlord, it is your responsibility to provide safe accommodation.

It’s essential that you manage the following risks and hazards within your investment property to protect both your asset and its residents. 

Property is an excellent source of passive income, which is why so many people get into this type of investment. 

However, it’s not as easy as just buying a house and leaving it to appreciate — the typical goals are to lease it out and profit from it. Thus, keeping a well-maintained, safe home is vital to your investment journey and to your reputation in the property industry.

As a landlord, you want to be able to offer prospective tenants a dwelling that is comfortable, easy to maintain and secure.

You also want to safeguard your investment, especially since it is largely at the mercy of others. The possible issues for investors are generally related to upkeep, damage and tenants. All these things can be costly, so it’s best to be proactive and take preventative measures before they take a chunk out of your savings. Many of the big risks of property ownership can be easily rectified, reducing significant liability risks for landlords.

Let’s look at a few of the biggest potential pitfalls and how to minimise the chances of a negative outcome.

All properties slowly deteriorate over time — that’s why the government compensates investors for depreciation.

Protection Strategy:  Regular maintenance and prompt repairs

As an investment property owner, it’s important that you stay on top of repairs and conduct routine inspections and schedule maintenance checks, including monitoring plumbing, electrical and structural works to make sure everything is in good condition, especially as it relates to the structure and foundation of the property.

If you discover problems, always look to fix them as soon as possible. The longer you leave a problem, the more it will impact the value of the home.

This is a major problem, if fire gets out of control, it can not only damage the property but it can also put lives at risk.

Protection Strategy:  Install and maintain smoke alarms

It’s crucial, and a legal requirement, that landlords annually check the smoke alarms in their investment properties. Smoke alarms have a typical lifespan of eight to ten years, but the battery does need to be replaced once a year.

It is well worth the small outlay, to prevent, what could be, a very hazardous outcome.

Every landlord hopes to get great tenants who are respectful, neat, quiet and pay rent on time. However, that’s not always the case. You can get tenants who give you major headaches.

Protection Strategy:  Landlord Insurance

Tenant-related issues can be expensive, especially if they include legal issues, so landlord insurance is a must-have. When getting landlord insurance, it’s important to not only check the price, but also all the provisions included in the cover. You’ll also want to determine if you’ll need special conditions related to the weather (flood and fire) or to pets.

This insurance is tax-deductible because it is considered an investment expense.

Pest-related problems are common and should never be taken lightly because of the potential for significant damage. Termites are capable of destroying a property all the way down to the foundation, and an ant invasion can cause structural damage as well. In addition, infestations of cockroaches, rats and fleas can bring disease to the household.

Protection Strategy:  Regular pest control inspections

When looking for a pest control company, the main factor is to know exactly what kind of services you’ll be getting. You are looking for a firm who performs thorough inspections and eliminate all kinds of pests – not only termites and ants but fleas, spiders, cockroaches and rats.

As with every profession, property management is not immune from ‘dud’ operators.

Make sure you hire a property manager who is experienced, professional and passionate about customer service, towards both the landlord as the client and the tenant as the paying customer.

Protection Strategy:  Manage your managers

Ideally, once you have an A-grade property manager in place, they should manage your investment without too much input from you. However, make sure you have a clear understanding of the services they have to offer and that you have openly communicated your needs and expectations.

PROPERTY PROTECTION ESSENTIALS

Protecting your property investment is all about planning for the best while anticipating the worst. So to sum up, have:

  • Landlord Insurance— It not only protects you against property damage and theft, but can help cover your rent if your tenant does a runner.
  • Professional Experts —A good property manager, an accountant with property investment experience and a mortgage broker are all essential team members.
  • Savings —All property investors should have a small buffer account of at least $5,000 per property to manage emergency expenses.

                              email: kooweerup@oneagency.com.au                    web: oneagencykooweerup.com.au

Landlord Property Management Tenant
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PROPERTY INVESTORS – MANAGE RISK, PROTECT ASSET