Too often rental properties are seen as a foolproof source of steady income where the investor "can't lose" This is often not true.
Many novice landlords are not aware of the costs incurred throughout the investment and don't take advantage of all the benefits.
Some of the biggest costs for landlords are incurred before finding tenants - in safety items such as smoke alarms and circuit breakers as well as insurance.
Statements of agent fees can often appear complex and confusing. Rental income can quickly evaporate when subject to management fees, letting fees, marketing fees, strata levies and even a fee for the statement itself.
Cameron Anderson of Silverhall says, landlords often make the mistake of choosing the cheapest property manager.
"A good property manager should be making sure you have properly managed tenants, timely inspections and communicate with the landlord at the right times. Good property managers will inform the landlord when a lease is due for renewal to ensure the new lease period reflects the proper market rent. I see too many times property managers not communicating with landlords and accepting less than market rent.”
Management fees vary between states. This is usually a factor of supply and demand of property managers for a particular area.
Landlords need to ensure agents demand punctual rental payments to avoid extra loan interest.
It's also important to recognise the value of further investment in the property, which can attract higher-quality tenants and is often tax deductible. However, be careful not to overcapitalise.
Better tenants mean lower arrears, higher rent and less maintenance costs.
For more information on property investment strategies, check out Silverhall’s range of FREE informative ebooks, or contact us on 1300 662 143.