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Common Mistakes Property Investors Make

Mistake Four- Different Expectations

The need for the right expectations

Being a property investor brings many rewards as well as a sense of achievement; having attained something that most people in society have always said they would like to do and dream about, but never actually attain the status of becoming a property investor.

However the need for income comes with the need to rent out the property to (usually) a total stranger in good faith that they will pay the rent on time and look after the property.

If something occurs outside of what we expected, this can lead to annoyance and upset. However if something occurs within our expectations, we usually we react in a way with much less likelihood of upset and stress.

What are some of the expectations a property investor should have?

When it comes to property management, it is good to have the right understanding and expectation. Here are some common areas that can cause conflict and upset with property investors:

General 'Wear and Tear'- this is understanding that every person who rents your property will always live differently than you would. 'Wear and Tear' is the allowance of  some 'bumps and scratches' to paintwork, woodwork and other items. The SA Tribunal does allow for reasonable wear and tear for the following items, (as well as everything else provided in the property) to a point where the particular items 'are written off' as having reached the end of their lifespan:

  • Carpets- 10 years
  • Lino- 7 years
  • Paintwork- 5 years (sometimes this also depends on the original quality of paint used)

The Rent Arrears Process- at AdProp, we have a Zero Tolerance Rent Control approach when it comes to tenants falling behind in payments. We believe that tough early intervention is the key to ensure that rent arrears do not get out of hand. However every now and then, despite all our best efforts a tenant may for whatever reason not pay and the situation head for eviction.

The total process to completely remove a tenant from a property is approximately 6-7 weeks after serving legal forms, applying to the tribunal and the time the tribunal may give before eviction can occur. In this situation only having a suitable landlord insurance policy may reduce the impact of a financial loss. However knowing the length of time it can take to remove a tenant creates the right expectation should this unlikely situation occur.

Repairs and Maintenance- this is simply having the right expectation that everything that is provided as part of the tenancy, whether inside or outside, on the grounds or in a shed, has been provided in good working order. If an item breaks down, it must be repaired within a reasonable time frame. If it cannot be repaired, it must be replaced.

Sometimes a property investor will provide a dishwasher or airconditioner at the start of tenancy, with the reasoning that the tenants can have full use of it until it breaks down,at which point it will neither be repaired or replaced. However whatever is supplied must be either repaired or replaced.

Many years ago, we were able to 'write' into a tenancy agreement that such items were not for tenant use, so being able to technically 'side-step' the obligation to repair or replace these items. However the tribunal has now toughend up on such clauses, disallowing such landlord protection and insisting that everything provided must be in good working order.

Our Exclusive Property Investor's Handbook

At AdProp we believe that new property investors need to have a good understanding on what is really involved when their property is rented to somebody else.

We have created a detailed and exclusive 34 page Property Investor's Handbook 'user manual' that comes in four parts:

Part One- Frequently asked questions

Part Two- Landlord and tenant rights and obligations (quotes from the Residential Tenancies Act)

Part Three- Getting the property ready for tenancy- a useful checklist

Part Four- Our written customer service standards and guarantee

 

Looking at buying an Investment Property, or looking for a new property manager?

Give AdProp a call today.