Many people may be under the impression that being a landlord is so easy. After all, they can just sit back and relax while waiting to receive the monthly rent, correct? This couldn’t be farther from the truth. Being a private landlord is a tough job. In addition to making sure the property is in its best condition, it also involves managing tenants, paperwork, and other various responsibilities that the landlord must adhere to throughout the residential tenancy.
While property investment remains one of the safest long-term wealth creation strategies, managing a property comes with many challenges. Many landlords choose to manage their property on their own without the help of a professional property manager, but they may find themselves fraught with problems they didn’t expect. In this article, we explore the different challenges that private landlords may be up against.
This is perhaps the biggest challenge for private landlords. Across Australia, there is state-specific legislation which protects landlord rights as well as the tenant’s. As investment property owners, landlords are obliged to abide by state law. However, legislation is often amended, especially as rental markets change.
In Victoria, the state government is in the process of reviewing and potentially changing legislation on property and renting. Some of the possible changes may include long-term leases of up to 10 years, extending the eviction period to 182 days, and allowing for “non-structural modifications” to be made to the property without the landlord’s consent. For landlords, these changes in legislation can make effective property management all the more difficult.
Finding the right tenant
How can landlords select the right tenant for their property? Aside from conducting comprehensive identification and reference checks to ensure a potential tenant has good rental history, a landlord is also expected to comply with the Equal Opportunity Act, which states that applicants must not be discriminated against based on gender, age, race, religion, and other factors. With all these considerations, finding the right tenant for your property can be a headache!
In addition, landlords may also want to consider doing character checks on a prospective tenant to ensure that they are honest people. There are shady individuals out there who may be intentionally avoiding dealing with professional property managers. This tenant type may target private landlords knowing that they will most likely be accepted on face value. When the landlord realises that they’ve been renting to bad tenants, it may be too late as significant financial and even legal issues may have already occurred.
In the landlord-tenant relationship, disputes may arise. Any breach on the tenancy agreement whether it is damage to property, loss of landlord’s goods, unpaid rent, unpaid bills, repairs to the property, or making claims on the rental bond, disputes can cause massive stress to both the landlord and tenant. Disputes may be presented to the Tribunal, who will then decide on a resolution.
Keeping open communication lines
Landlords have the responsibility to attend to urgent repairs such as burst water pipes, gas or roof leaks, electrical breakdowns, flooding or storm damage, and any damage that results in the property being unsafe or not secure. If they are not dealt with right away, the tenant has the right to organise a qualified professional to complete repairs, up to the amount specified in the tenancy agreement. Non-urgent repairs may also be requested by the tenant, which usually must be completed in 14 days.
Effective communication between the tenant and landlord is key in being able to action on urgent repairs. If for whatever reason the tenant can’t report the issue promptly to the landlord, then the urgent repair might not be addressed immediately, which may stress the landlord-tenant relationship and result in a case being put forward to the Tribunal.
The advantages of working with a professional Property Manager
Property managers can take the stress out of managing properties. During a residential tenancy, landlords have a number of responsibilities to their tenants, which are stated in state-specific legislation. When a private landlord decides to work with a property manager, the property manager can manage these responsibilities on the landlord’s behalf. A property manager uses their experience and skills to find quality tenants, minimise vacancies and handle marketing, repairs, maintenance, accounting and legal compliance efficiently and cost-effectively.
Is getting a Property Manager worth it?
Working with a property manager means that all contact with the tenant is done through them, sparing the landlord from the day to day hassles of managing tenants, completing agreements, organising maintenance, and if necessary, sorting out problems at the Tribunal. To maintain good communication in cases of emergencies, professional property managers also have well-developed systems for tenants to report any urgent repairs or damage, which can then be remedied by whichever party is responsible by agreement.
With so many pieces of legislation regulating the landlord rights and responsibilities, it makes sense to have a professional on your side who can help maximise your investment returns and minimise your headaches, so your property investment journey can be as successful and stress-free as possible.
Category: Property Management
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