Why it’s the perfect time to realign your regional portfolio
If you’ve been considering parting with a regional property, but you’re worried certain factors might make it a hard...
Wear and tear has long been a point of conflict between landlords and tenants – often considered a “grey area” even by property managers. How can investors deal with property maintenance fairly, without compromising the needs of any party involved?
Rental properties typically suffer from wear and tear over time, either due to natural causes or the actions of men.
Where landlords would say “They trashed my joint, I want it repainted,” tenants usually argue, “You knew that I had three kids and a dog and dogs wreck lawns and kids draw pictures on things, so it’s all part of things.”
In order to avoid conflict, Managed’s Thom Richards and Nick Bouris strongly encouraged both landlords and tenants to discuss the responsibility of attending to wear and tear even before signing rental contracts.
The property managers also advised landlords to do proper documentation before and after the property is tenanted to ensure fair division of responsibility.
According to the property managers, some of the things to consider when renting out an investment property are:
The size and location of the property may influence the type of prospective tenants that could be attracted to the property.
Mr Richards explained: “If you’ve got a four-bedroom terrace, the demographic that is going to live in your property is most likely going to be a family or four students, but if you look at a one-bedroom in the city, it’s typically lived in by a professional and they’re very rarely there because they’ve got a busy life.”
“The difference in the wear and tear between those two types of properties is going to be quite dramatic.”
More things are likely to go wrong the older the property gets, especially if it hasn’t undergone any form of renovation for a while.
A recently renovated property, with proper documentation, could be less prone to the possibility of unexpected issues arising.
“It is less likely that there is going to be an issue there than if you’ve got a property that you’ve just neglected and it’s just been sitting stagnant for 10, 15 years without any TLC,” Mr Richards said.
Once tenanted, Mr Richards advised both tenants and landlords to keep updated documents at their disposal to ultimately avoid any bone of contention.
Before a tenant moves in, landlords are encouraged to go through the nooks and crannies of the house with the tenants to make sure that everything is working well and that they are happy with the current condition of the property.
Being detailed in terms of the onboarding process could help both parties avoid any conflicts and unexpected costs in the future.
According to Mr Richards: “I think the most important thing is just to make sure that you’ve got the information recorded.”
“A lot of people would just do the handover. They check a few boxes on a standardised form, take a couple of photos, then hand over the keys but it’s not really a thorough test or an accurate portrayal of the property’s condition.”
Having documents on hand will also help establish trust, goodwill and loyalty between the tenant and the landlord – helping ensure a good long-term relationship and, ultimately, a secure cash flow for the investor.
A landlord, also known as a lessor, refers to an individual that owns a leased property.
Maintenance is the act of preserving and keeping an asset, property or equipment in good condition through checkups and repairs.
Property refers to either a tangible or intangible item that an individual or business has legal rights or ownership of, such as houses, cars, stocks or bond certificates.
A tenant, also known as a renter or occupant, is a person or entity that leases space for residential or commercial use.