Prevention Management, It Could $ave Landlords Greatly

The old saying of “You don’t know, what you don’t know” is certainly true when it comes to landlords’ expectations of how their properties are managed versus how they should be proactively managed.

As a landlord, you may feel that the job is getting done by your property manager, especially if they have found you a quality tenant, are collecting the rent and have carried out routine inspections and reported back.

However, most conversations I have with landlords about their past experience with property managers and what they thought was good management, quickly reveals areas where the landlord may have been placed at unnecessary risk, without even knowing.

Now, some of the products or services that are listed below may not be applicable to all properties nor an expense that a landlord wishes to engage in. However, the point of raising this issue of potential risk management, is not really to get into the specifics of each of these options and when a landlord should or should not be considering, rather the point that on too many occasions, the professional service provider, being the property manager, neglects to even talk through the risks and the options available to the landlords to potentially avoid such risks.

Just some of the areas or items of risk management that tend to be completely overlooked may include the following;

– Lease Period Negotiation – Offering a tenant a lease term other than an industry standard 6 or 12 months which brings the property up for potential re-letting during a non-off peak rental period – ie. Winter for a beachside property
– Notice Periods, Break Fees & Lease Renewal – There’s a number of notice periods and break fee legislation that can cause landlords risk and they should be fully aware of all of these right from the start of leasing their property
– Landlord Insurance – Wide range of insurers and products and landlords should be encouraged to do their research on best coverage and shop around
– Tax Depreciation Schedule – Many landlords think that this is only applicable for brand new properties, which it’s not. It may be worth consulting a Tax Advisor or Accountant prior to leasing their property.
– Annual Smoke Alarms Service – With recent strict legislation changes, many landlords may be at risk without knowing it and possibly even with investment apartments within a Strata. Property managers can connect landlords with annual service and maintenance providers for advice on this and to ensure that their property is fully compliant
– Routine Pest Inspection Report OR Preventative Treatments – Varies property to property and should at minimum be a discussion with the property manager of products and techniques that are available for best protection
– Gutter Guard – When a property owner occupies their own property, the required regular maintenance of issues such as clearing of gutters before it causes significant issue, tends to be more visible and top of mind than with that of an investment property without the day-to-day visibility. It’s a requirement for tenants to report any issue to their management agent however should this not occur, costly issues can occur and quickly.
– Garden Maintenance – Depending on how extensive the garden is of the rental property, established and flourishing gardens are a significant risk for landlords. Sentimentally and financially, a garden that significantly deteriorates can be major and certainly not a quick fix. Whilst routine garden maintenance such as watering, mowing and weeding is the responsibility of the tenant, everyone’s interpretation and interest in ‘gardening’ is vastly different. A number of safeguards can be explored, discussed, and negotiated at the very start of the tenancy.

Grant McKay
Director
Litehouse Property
0414 518 101
[email protected]