Thursday, February 09, 2017

‘DIY’ Landlord… Risk vs. Return.

Airbnb, Gumtree, Flatmate Finder... there are many online ways to find tenants, for both short-term accommodation and more permanent stays.

These days it is quick and easy. With the click of a button the advertisement goes up and is broadcast to a wide network of potential tenants. The ease of using such online sites is reflected in the latest stats which show that over three million Australians use Airbnb and it's been reported that one in every two families use Gumtree*.

What some landlords may not realise is finding someone to rent your property is one thing, but conducting the right checks to find the best tenant is much more involved - and is crucial. Research shows 82% of landlords said getting
the best tenant is more important than filling a property as quickly as possible^.

And it's easy to see why. Last month a Queensland couple made the news across the country with headlines titled, 'Landlords nightmare... maggots, faeces and garbage'. This couple had accepted tenants from Gumtree,
and were absolutely horrified at the state their property was in after the tenants had moved out. The article states that the Landlord was left with an estimated cost between $5,000 and $10,000 in damages and cleaning a family home
that was virtually non-recognisable... and 60 cubic metres of rubbish.

This is an extreme case - but it does happen - casting a warning to those investors who are using online websites to find potential tenants.

We are seeing first-hand that when things don't go to plan, Landlords are finding they need an expert to step in and take the problem away. Peace of mind is a big draw card, and our team is seeing an increasing number of 'DIY' Landlords seeking out a managing agent to get things back on track.

So can 'DIY investing' be done successfully? Absolutely. The exception is these Landlords have time. Time to complete the required due diligence on the tenant applications, conduct regular inspections and maintenance, keep on top of the rental market trends, and don't mind being firm when it comes to rent collection. This will help narrow your exposure to the risks that are involved.

If you find yourself in a fortunate position where your tenant pays their rent on time, are happy to do some up-keep around the house and treat the property like it is their own, this is the dream run... so hold onto them! There are definitely model tenants out there. It's a matter of taking the right number of steps to find them.

If you are looking at buying investment properties in 2017 or are a 'DIY' Landlord who wants to understand more about what's involved, there is some handy information available on the Consumer Business Services website. Understanding the tenancy landscape will help you balance the risk and ensure you achieve the greatest return.

* Today Tonight - 1/2/17.
^ Aug 2016

No comments: