Foolish Mistakes Property Landlords Make.
It is said that a fool with their money is often separated from it, and when it comes to property management for your investment property, this is certainly true.
Over the past 17 years, Nathan has seen plenty of foolish things done by landlords that left them exposed to danger and out of pocket.
Here are some of the worst.
1) Not protecting themselves.
Some people think they will save money by not getting landlord’s insurance – but this mistake could cost them the most.
If you wouldn’t drive a car without insurance, why would you lease a property without it?
Not only could you lose heaps of money from damage or vacancy, you could lose millions if your tenant is injured or killed.
2) Choosing the cheapest property manager.
Why try and save a couple of dollars each week if you lose much more in poor returns.
If you want to get the best rent possible out of your investment properties, then it is worth choosing a proactive property or asset manager.
Nathan manages Blink Property like a hedge fund. He tries to get the best possible returns on his investors’ properties and views them as if they were an extension of his own.
A good property manager will have goals that are in line with your own – not those of the tenant.
3) Self-managing their properties.
Would you take on a trade that you’re not qualified in? Probably not. So, why do so many people think they can manage their own properties?
Nathan has seen so many landlords leave themselves exposed to getting sued, becoming out of pocket or getting screwed over from tenants – all because they have done little things wrong that had big consequences attached.
If you don’t cut your own hair or home-school your children, why manage your own properties? Paying an expert to do it makes much more business sense.
4) Befriending tenants.
Nathan chooses to deal with property managers, not tenants. It is more professional to do business with the person looking after your property rather than the people living in it.
If you treat your investing as a business, having a relationship with your tenant could make it more difficult to make logical decisions.
5) Not doing proper maintenance.
Some landlords become such tight asses that they don’t attend to routine maintenance and simple repairs.
Leaving your properties to fall into disrepair is a bad idea because this can cause much bigger and more expensive problems down the track.
It also means that you can’t get optimal rent for the properties. Let’s face it – the only reason anyone would live in a slum is to get super cheap rent.
Also, a poorly maintained property could become a health and safety risk for your tenants, leaving you exposed to possible legal action and the massive costs attached.
Don’t want to be no fool? Treat it like a business.
Here are some of the smartest things you can do if you are a landlord:
- Be business-like – if you want to make money as an investor you should work to minimise risk and maximise returns in every part of your investing.
- Be proactive – the biggest difference between the wealthy and the poor is mindset. Focus on building your net worth by building capital and cashflow.
- Increase your cashflow by looking at these two aspects – maximising the money that comes in and minimising expenses. You can do this by looking after your property and hiring a proactive property manager.
Have you ever had a bad property manager? Please share your experiences in the comments section below.