If you own a rental property or many, it is important to keep them in good condition. Not only will this allow you to attract and retain good tenants, but it will also ensure your investment is looked after.
That means doing some specific maintenance when summer rolls around to keep your assets in tip-top shape. Here are some jobs to do over the warmer months.
1. Security Check
Summer time is when many of us travel to see family and friends which may mean your property could be vacant for a few weeks over the Christmas/New Year period and become a potential target for thieves.
Find out if your property is going to be vacant and if it is, check the security of your investment. Make sure the locks are functioning well on all windows and doors, check the window latches and security lights, and if there are security cameras, as there often are in apartments, that these are working?
2. Organise repairs and maintenance
Summer is a great time to organise any repairs, maintenance, and refurbishments. If your tenants are going to be away, ask them to pack away their personal items so you can take care of any jobs that need to be done such as painting, re-sanding the floor, fixing any issues in the bathroom or kitchen that may have arisen. You will need to get the tenants permission to enter the property so it's a good idea to organise this in advance.
Also, think about what may need to be done outside – is the decking ok, does that garden need some attention, are the tiles in good condition? Make sure you talk to your Property Manager if you end up fully renovating a bathroom or kitchen during this time as you may be able to increase the rent if your lease is up for renewal.
Make sure you organize your tradies in advance as they too are often on holidays.
3. Clean out the gutters
With Summer so too comes the fire season…so if your investment is in a fire risk, clear out your gutters before the heat arrives.
If there's a build-up of leaves, sticks, or other debris in gutters, this can be a fire hazard. That's not to mention the potential to block up the structure itself, which can make it difficult for water to drain through.
This can lead to bigger problems later on, such as gutters that sag, along with mildew accumulating in the area. It can also cause water damage, which could potentially affect the home itself. Weatherproofing your property for tenants will safeguard against any adverse weather conditions and reduce the risk of having to make out-of-pocket repair costs.
4. Planning for the next year
Given the fluctuations in students and people’s employment, many tenancy agreements finish either at the end of the year or the beginning of the next given fluctuations in student living situations and employment. If you are happy with your tenants and want them to resign it is now a good time to talk to your property manager to see how you can get your tenants to renew their lease. It is worth asking them the following questions and taking action where appropriate:
- Do the tenants have any issues with the property that I need to address?
- Should I offer a grace period when paying rent – such as: giving them 3-4 days to pay their rent without a penalty being imposed?
- What do you think about offering incentives to the tenants, such as if you re-sign I will fix the patio, kitchen splashback, bathroom tiles, etc?
- Should I reduce my rent if the tenants sign a two-year lease?
The benefits of keeping good tenants are you don’t have to find new ones, you don’t have to screen new applicants, you avoid vacancy costs and advertising costs and the current tenants are aware of the rules of the property and payment conditions.
5. Summer garden maintenance
After winter you might find your garden needs a bit of TLC. Spruce up your garden by refreshing the mulch, weeding the garden beds, and considering adding some flowering plants for a splash of colour. If you have a watering system, adjust the timer to daylight saving time (if that applies to your state), clean the exterior lighting and windows, and check if the entertaining deck needs any repairs and that the BBQ is set up safely to be enjoyed throughout summer.
6. Insulation
While insulating your rental property is a cost for you, you might find that you can secure a better weekly rent from tenants, given they won't have to spend as much on their electricity bills and are less likely to switch on the air conditioner.
If you get the opportunity to insulate the property thoroughly, this could pay off in the long run. How you do this will depend on the kind of dwelling you've invested in, but have a chat with your property manager if you're not sure of the right approach.
7. Check the property isn’t being sub-leased
Many investment properties are rented to students and over the Summer holiday period they all head home. It is worth finding out if they are looking to sublease your property while they are away. Unless it is in the lease, they will need to get written approval from you to sub-lease to someone else. Whilst you are not allowed to withhold this permission without a good reason, it is important to understand who is living in your investment.
8. Find out your borrowing power
If you are looking for another investment property, you need to know how much you can borrow. Your borrowing power will depend on a few factors, including the strength of your loan application. If you already own an investment property or multiple properties, you can use the equity from your property to use as a deposit toward your next investment property.
9. Get pre-approval
Over this period, it’s essential to get your finances in order so that you don’t miss out on securing a property. Secure pre-loan approval before you start looking for more investment properties. Doing so will also help you to gauge how much you can actually borrow.
10. Hire a Property Manager
Not all property investors use property managers, but doing so can make your life as a landlord so much easier. There are many benefits of hiring a property manager. They will help you to manage the property, organise repairs, market your property to potential tenants, help you to find the right tenants, and collect rent. While hiring a property manager does come with a fee, it is tax-deductible. If you own more than one investment property, a property manager will save you a lot of time and money.
11. Select the right Mortgage
For most investors, mortgage repayments will be your largest expense so it’s important to get the right loan. Many investors prefer interest-only loans since the repayments are smaller and are also tax-deductible. However, it is important to remember that the principal will still ultimately need to be repaid.
12. Find the right tenants
Finding the right tenants as a property investor is crucial for the long-term success of your investment. Remember, finding the right tenants is not just about filling a vacancy quickly but ensuring a mutually beneficial, long-term relationship. Taking the time to screen tenants thoroughly can save you potential headaches and financial issues down the line.
13. Get a handle on your cash-flow strategy
As a landlord, it’s important to regularly conduct a cash-flow analysis to ensure that you maintain financial stability.
A positive cash flow investment is one where the income generated from your investment property surpasses the total ownership costs. In other words, the property's earnings, including rent, should exceed mortgage payments and other expenses.
On the flip side, a negative cash flow strategy involves outgoings surpassing rental income. In such cases, you can offset annual losses against taxes while anticipating future property value growth for positive long-term returns.
DISCLAIMER - The information provided is for guidance and informational purposes only and does not replace independent business, legal and financial advice which we strongly recommend. Whilst the information is considered true and correct at the date of publication, changes in circumstances after the time of publication may impact the accuracy of the information provided. LJ Hooker will not accept responsibility or liability for any reliance on the blog information, including but not limited to, the accuracy, currency or completeness of any information or links.
