We all love it when we own a rental property and all’s going well. When the tenant is paying on time and looking after the place and no repairs are required and the property is going up in value – we wish we had another ten properties! But when things are not going so smoothly it is a different story!
This month we have lived through the frustrations of things not going well for one of our owners and I would like to share some of the learning’s from this experience for everyone to consider.
1. Furnished properties – not something I would consider or recommend. If something like a fridge breaks down, no matter how new it was, you will need to replace or fix it. And if any of your furniture is damaged accidentally it is unlikely your insurance will cover you. As one of our owners discovered this month.
2. Landlord Protection Insurance – Please check your policies!! There are so many different policies and exclusion clauses you need to be sure that the policy you have will protect you for what your needs are: such as loss of rent if the tenant is behind. You don’t want to find that your policy only covers you if your tenant is more than 5 weeks behind as this owner did! Also, you need to be covered for accidental damage. It is rare that tenants intentionally damage your property and it is more likely to be accidental so check that you’re protected.
No one likes it if a tenant does not pay rent on time. If the problem becomes a consistent one than you need to strongly consider if you want to continue the frustration of not knowing when you will receive your rent. Unless your property is hard to rent (in which case you need to consider other factors) I highly recommend giving the tenants notice (two months) at the end of their lease and finding another tenant. I would also recommend that you give notice to vacate if breach notices are not remedied by the due date to minimise your loss of rent. Failure to do so can also void your insurance policies.
The above comments may seem hard and please be sure that I empathise with any tenant or landlord going through difficult times. We do not want to see any of our customers and clients in this situation. However,in acting for you, our landlords, it’s important to me to provide you with advice that will protect your interests.