Many landlords make some genuine mistakes when they are renting their homes out. Landlords provide an essential service (housing) to renters, and as with all services, the consumers of that service (renters) have rights - and landlords, responsibilities. These are mostly geared around the landlord's responsibility to provide a safe environment for their tenant, to respect their privacy and to tend to repairs promptly. For tenants, it's important to always pay the rent on time, look after the property and report any repairs / maintenance immediately.
Some common mistakes that landlords make:
1. Rushing to accept a tenant without insisting on proper screening
It is very difficult to evict tenants. As tempting as it may seem to accept the first person who applies, it's important that thorough checks are carried out, both by the agent and by the landlord. Poor screening could mean ending up with a tenant who doesn't pay their rent, damages the property and won't leave.
2. Delaying repairs and failing to maintain the property in good condition
All this does is increase costs for the landlord in the longer-term. Repairs that are left become more expensive as time goes by, and a property that is not maintained in good condition will not achieve the best possible rental return. As well as this, failure by the landlord to carry out necessary repairs and maintenance is grounds for the tenant to issue a termination notice.
3. Discrimination
It's illegal for landlords to discriminate against a group of tenants, for example due to ethnicity, sexual preference, religion, marital status, children and so on. Application approvals need to be on the relative strength of the application in relation to the other applications that are received. The main things that the landlord should look for in applications is the tenant's demonstrated ability to pay the rent and their demonstrated ability to look after the property.
4. Scrimping on landlord insurance
I am genuinely shocked that some landlords don't have landlord insurance, assuming that because there's a bond, they are safe. In many instances, the damage / loss of rent from a tenant far exceeds the amount of the bond that has been paid, and this is where landlord insurance comes into play. But, not all insurance is created equally. It's important to look through the fine print and work out what is covered, what's not covered, and what amounts the insurance will pay out for each item. There's a big different between only 6 weeks cover for loss of rent, vs 52 weeks. Shop around and compare your options. But whatever you do, get insurance!
Melissa Maimann is a licenced Buyer's Agent in Sydney. She assists home owners and investors alike with an affordable service that empowers you to make smart purchase decisions. Melissa's service is fast, efficient and accurate. If you need a hand with your next purchase, don't hesitate to make contact.