A leading insurance specialist has warned landlords that attempting to self-manage a property, failing to monitor arrears, and setting rent too low or too high, are three of the most common pitfalls likely to affect their pockets.
Carolyn Parrella, executive manager at Terri Scheer, also listed neglecting maintenance and inadequate insurance as two further financial traps landlords need to avoid.
Ms Parrella said setting the rent too high may result in limited interest from prospective tenants, while setting it too low may place the landlord under financial pressure, while also having the potential to attract unsuitable tenants.
“Look on real estate websites and through newspaper classifieds to find listings with similar features to your property, as this will give you a guide on the rental market in that area,” she said.
Terri Scheer has also advised that if a tenant falls behind with their rent, it can be a very long and costly process to resolve and could leave a landlord considerably out of pocket.
“If your tenant doesn’t pay on the due date, monitor your bank account on those days. If they fall into arrears, a breach of notice should be sent for non-payment of rent,” said Ms Parrella.
According to Ms Parrella, self-managing a rental property may be tempting to some landlords as a way to make a small saving. However, the benefits of appointing a property manager can far outweigh these costs.
“Property managers are able to conduct regular property inspections to identify maintenance issues, have systems in place to find and screen prospective tenants, and have access to databases that list tenants with a history of defaulting rental payments, damaging property and eviction,” she said.
Ms Parrella also warned that landlords neglecting maintenance on properties may be legally liable if a tenant happens to injure themselves.