Being a Landlord
Investing in property is a popular method for planning a financial future and many people have had success in doing this. Of course, an investment property comes with more than financial responsibility. You will need to decide whether you will utilise the services of a property manager or take on the role of landlord yourself.
Being a landlord may seem easy but there are considerations that are essential to ensuring you don’t fall into some common traps and wind up with unnecessary costs or problems.
Being a landlord is a legal responsibility. The lease signed by you and the tenant is a legally binding document. Sample agreements can be downloaded from Consumer Affairs Victoria; these outline responsibilities for both parties. The lease safeguards both parties, and for the landlord it protects an asset of considerable value. The lease is essential for enforcing terms should the tenant default and legal action is necessary. Even if you choose to rent your property to friends or people you know personally, it is wise to ensure a proper lease agreement is in place.
It is unlikely you will not have property insurance, but you need to ensure this policy covers your property if you are not the resident. Likewise, it is important to have specific landlord insurance, which can cover you for loss, theft or deliberate damage which happens during a tenancy. A landlord policy may also provide cover parts of the contents of your property, such as light fittings, blinds, carpet and permanent appliances such as a dishwasher. Importantly, most landlord insurance policies will offer protection for loss of rent if the lease is broken or the tenant does not pay the rent.
Like any other part of your investment plan, you should do the research as to whether being a landlord is suitable for you. As part of this research, head over to Accrue Real Estate’s blog to get a perspective on property managers.