How can investment property owners be prepared?
As a seasoned landlord, you probably know the regular expenses you need to cover for your property. These expenses might include your management fees, body corporate fees (if you own a unit, apartment or townhouse), and larger jobs such as replacing appliances or refreshing the paint.
But what about the expenses you haven’t thought about?
Sometimes there are unexpected expenses that may be associated with something going pear-shaped at your property. For example, if a tenant leaves and stops paying rent – you may be in for a loss. You may even need to outlay extra funds if extensive damage occurs for some unexpected reason.
While it can be difficult to think about, having an idea of the unexpected expenses associated with having an investment property is a good way to be prepared. Considering what you might do in one of those scenarios ahead of time could help you avoid the dreaded “unexpected expenses trap”.
Here at One Agency Orange, we are investment property management experts. Read on for our frequently asked questions and top advice in relation to some of the unexpected costs you may encounter as a landlord.
Q. What can I do if the rent stops being paid?
A. Sometimes a tenant may stop paying rent. It happens! No matter the scenario, whether the tenant has “done a runner” and left the property or they’ve passed away, there are options to claim back your lost rent. For a tenant wilfully avoiding their rent payments, you could get a debt collector to chase up the overdue rent. If you have landlord insurance (which you should) and it covers lost rent, you can make a claim using this route as well.
A. If a tenant vacates your property and leaves large items behind, such as furniture, you may need to pay to get these removed. Check with your property manager on the best way to claim these costs. Your landlord insurance may cover the costs in certain situations and there are other avenues to pursue depending on the circumstances.
Q. What if the tenant’s pets cause damage to the property?
A. The various pieces of residential tenancy information in each state are gradually changing to make it harder for landlords to refuse tenants having pets. Now more than ever it is important to make sure your insurance policy has provisions to cover the costs of damage caused by pets.
Q. What if there is mould or other unexpected weather damage to our investment property?
A. Black mould and damage from the elements is a real concern for property owners. Mould is a serious issue. Once it’s in a property, it can be very hard to address. Similarly, natural disasters and severe weather events can cause property damage. Make sure your policy covers your property for mould issues and damage caused by severe weather events.
Need some more information or expert advice?
Owning an investment property is a great way to build your wealth and add other sources of income to your household. Being aware of the unexpected costs you may encounter in different scenarios is a good way to be prepared.
Don’t let these concerns keep you up at night! There doesn’t need to be cause for alarm. Having an experienced property manager who has often seen and dealt with these problems before can provide you with the support and advice you need.
Drop in or give us a call at One Agency Orange today for some expert advice on your rental investment property. Contact our office on 02 6362 9560 to arrange a time.
Remember, this article does not constitute financial or legal advice. Please consult your professional financial and legal advisors before making any decisions for yourself.