The top 5 landlord mistakes and how to avoid them
Being a landlord isn’t just a case of sitting back and picking up the rent on a residential or commercial investment property. There’s a lot more to it, including legal compliance obligations. Below are our top 5 Mt Isa landlord mistakes (and how you can avoid them).
Mistake #1: Not hiring a professional property manager
Professional property managers manage investment properties for a living. They keep up to date with the legal compliance requirements of landlords and lease agreements. When you hire a property manager, they can take care of important but time-consuming tasks for you. For example:
- sourcing quality tenants,
- preparing lease agreements,
- ensuring tenant rent is paid on time,
- communicating with tenants,
- doing regular property inspections, and
- organising for any necessary property repairs and maintenance to be done (with your approval).
The alternative is to do all these time-consuming tasks yourself. However, a good property manager will save you time and hassle. You should think of hiring a property manager as an investment rather than an expense, especially if you value your time and you want to ensure your legal compliance.
How to avoid it: It’s easy. Do your research and hire an experienced and local Mt Isa investment property management service, like our team at Jays Real Estate.
Mistake #2: Not understanding the local market
This is especially important in Mount Isa if you’re a residential or commercial property landlord who isn’t based here. It’s important to understand local market conditions like current rent and vacancy rates. The lower the vacancy rates, the more rent you can usually charge (and vice versa).
How to avoid it: Once again, a local Mount Isa property manager like our team at Jays Real Estate will always have the latest information at their fingertips to help when it comes time to draw up or renew a tenant lease.
Mistake #3: Not having fixed term leases
Fixed term leases provide you with a guarantee of income (usually for six of 12 months on residential properties, and longer on commercial properties).
How to avoid it: Unless there is a very good reason not to, opt for fixed term leases over the alternative of having a shorter term, month-to-month lease.
Mistake #4: Not budgeting for repairs and maintenance
This is another investment property expense that you should look at as an investment. Keeping your property in good condition will not only help you to attract and retain good quality tenants, it will also help in terms of the amount of rent you can charge and the value of your property.
How to avoid it: Set aside a percentage of the rent you receive (say 10%) into a separate account for repairs and maintenance. That way, you’ll always have funds available if or when you need it.
Mistake #5: Not taking advantage of all the tax breaks
Any expense (including repairs and maintenance) on a Mount Isa investment property is tax deductible. It’s crucial to remember that when you do your tax return, otherwise you’ll pay more tax than you should. Other common and tax-deductible investment property expenses include property manager fees, loan interest, council rates and insurance.
How to avoid it: Make sure you get an accountant to do your tax return for you to maximise your tax deductions.
If you’re a Mount Isa landlord and you need your residential or commercial property professionally managed, then contact our team today for an obligation-free chat! You should also contact us if you’re thinking about buying, selling, leasing or renting any Mt Isa property.
We’d be happy to provide you with advice and to answer any questions you have.