Over the years I’ve met quite a few landlords who have saved money by managing their own investment properties.
There was the couple that leased their home to a work colleague who seemed really nice at work. When the tenants marriage broke down and the wife moved out, the landlords where left with a tenant who they didn’t know, no written lease agreement and no condition report. The house went from being immaculately presented family home to a drop-in bachelor pad. When we finally got vacant possession for the owners there was a lot of damage and the few photos that the investors had were from when they bought the property and not dated. The owner just assumed they could charge all of this to the tenant from their bond. I advised they couldn’t as there was no in-going report to refer to. I also asked how often they did routine inspections, as the damage should have been picked up earlier. I was advised that the landlord had never completed an inspection in the year that the tenants lived there because they felt awkward asking if they could come through. The rent that the tenants were paying was also well below market rent. Not only did this client have repairs and damages that they now needed to fix out of their own pocket, but they were also not achieving the potential rent they could have been.
There was also a lovely older man who liked to manage his own properties and took great pride in doing the gardens (because then he could check on the tenants and make sure everything was ok) until he was taken to tribunal by the tenants for harassment.
And the owner who had great tenant living in the property, who had been there for years and “treated it like it was their own” and didn’t cause her any grief at all. Until the penny dropped that they were paying her $250.00 per week for a home with a rental potential of $550.00. She didn’t know how to increase the rent and over the years she had begun to feel obligated to the tenants. Honestly no matter how nice the tenants are, I would prefer that $15000.00 per annum in rent to be in my investors pocket !
Then there are the stories ( many many stories) of investors providing tenants with their personal phone numbers “call me if there are any problems………….”
- the hot water isn’t hot enough (11.30pm)
- 7 am on a Sunday morning – the blind in my bedroom is broken, can I get it replaced with a blockout blind because I like to sleep in on weekends?
- I’ve locked my keys inside, can you drive over and let me back in.
- I paid rent 2 Tuesdays ago and I gave you $100 in cash the last time I saw you – am I still 2 weeks in advance?
- Can I get a dog,
- a cat,
- a rabbit,
- a bird,
- can my boyfriend move in,
- can I pay next week,
- my mother’s friends father died so I need to go to Qld for a week and I can’t pay rent, is that ok ?
- my rego is due, so I can only pay half
The average property investment in Newcastle is $500 000, that’s a ½ million dollar business. As an investor you role is to ensure that you are doing everything to protect and grow that asset, trying to saving $100 a month and leaving your investment exposed to damage or loss is just crazy.