By Steve Waters
The fact of the matter is you can’t have a successful property portfolio without tenants, but too many investors forget that.
Without tenants in your investment properties paying rent, you have no cash flow, and your ability to cover the mortgage repayments will eventually dry up.
So, given they’re so important, how can you be a good landlord to your tenants?
Firstly, never be a slum-lord! What I mean by that is you must complete repairs and maintenance, which is part and parcel of owning a property, but you must also be able to determine between necessary repairs and tenant “wants” that are usually purely cosmetic.
The name of the game is to attract and keep a good long-term tenant so you need to be consistent in your dealings with them, including maintenance and repair requests.
Of course, anything that is dangerous – such as plumbing, electricity, trip hazards, decking or railing, and smoke alarms – must be remedied as soon as possible.
As a landlord you don’t want to spend money for the heck of it and you’re not there to make a tenant happy all the time, but there must be a middle ground and that’s why consistency is so important because it also means consistency of cash flow.
Good landlords are also fair with rent increases and don’t try to hike rents up over and above the market – which makes you a bad landlord as well as it being a poor business decision.
Sometimes, if you have a good tenant who is no trouble and who always pays their rent on time, you might want to leave the rent a little below the market because a good tenant is worth money.
Also, remember that tenants don’t usually like to move often either, so if you’re reasonable and fair with them, they’re likely to stay longer.
Good landlords also make sure they have adequate insurances so that if there are any major repairs they can be fixed quickly with minimum disruption to their tenants.
Also, don’t ever be one of those landlords who’s emotionally attached to the property and who flies into a rage when they see the lawn one centimetre above the “perfect” length! You must be emotionally and mostly physically removed from your property.
You should also be aware of conditions in your local market because you don’t want to try to ramp up the rent if there’s an oversupply in your area, which might motivate the tenants to shift somewhere cheaper.
I’m a fan of pets in rental properties but, of course, there are rules and regulations around that as well as common sense so you don’t end up with a German Shepherd in a two-bedroom unit!
About 70 per cent of tenants have pets so if you’re one of those landlords that doesn’t allow pets, you’re cutting out a huge proportion of your potential tenant market.
Depending on the location of your investment property, you should also have ceiling fans, air con or heating installed, because it just makes sense and attracts tenants for a relatively small financial outlay.
The number one tip to being a good landlord, however, is to always use a professional property manager.
The first reason why you should use a professional is you want that disconnect between your tenant and yourself, which also helps to remove any lingering emotional attachment that you may have with the property.
The second reason is a lot of insurance companies won’t insure you if you haven’t got a professional property manager in place so make sure you check the PDS of your policies.
But the final, and most important, reason is that managing property is not easy.
In fact, I think it’s the world’s hardest job and investors should never to try to manage their own properties.
There’s a host of rules and regulations (that seem to change quite regularly, too) which protect the rights and responsibilities of both tenants and landlords.
That’s why good landlords leave the management of their properties to the professionals every single time.