Friday, August 20, 2010

Things I learnt being a land lord

I gave my tenants the letter today. I feels so bad doing it to them, but it is the right things for us and it is my house. What letter? The notice to move out. They now have 60 days. Which means I will be moving in 60 days. Scary, there’s a set date for it. It got me thinking though, about everything I have learnt about being a land lord.




My house has been a rental for almost 3 years. The last 18 months of that has been the best of it, we finally got awesome tenants. They were easy going, always paid their rent on time and kept the house well. It has not always been that way.



But first, I will tell you what I have learnt.

1.) Know the law. Whether you have a property manager or not know your stuff. I had a property manager for a while and I had to correct them as they were breaking the law. Not something I want to be associated with.

2.) Be specific in the lease agreements. If you allow pets it needs to be written into the lease. By law in NSW you have to allow smokers, but you can specify they can only smoke outside. Know what is and isn’t allowed in the lease.

3.) Do a thorough prelease inspection. A camcorder is great to note everything. Make 2 copies, one for you and one for the tenant. This will help prove things if it gets nasty when they move out.

4.) If you choose to self manage your property set rules. When they can call, on what number, who are your repair men in case of emergency etc... We forgot to set rules with the first self managed tenants and they would call All. The. Time.

5.) Treat the rental as a business transaction. Do not get too emotionally involved or it will be hard to enforce things on the lease.

6.) Most property managers are useless. If you find a good one, you are lucky!

7.) People think you can claim everything on tax, you can’t. You can claim a percentage of most things, either of the whole cost or on a depreciation basis.

8.) Keep good records. There are so many things you can claim you need to keep really good records of everything you do in relation to the property.

9.) Have regular inspections. If you are using a property manager insist they do them quarterly like they should. I know many don’t and this is where you end up with severe damage.

10.) Don’t rent to friends. It almost always ends badly.





The first 2 sets of tenants were not so great. The first tenants we had were found through a real estate agency. We checked all the real estates in our area and found someone we felt really good about to manage our property. We signed the paper work, moved and they left the agency. Instead of someone handling our property who was professional and had years of experience, we ended up with a girl younger than me who knew less than me and was useless.



The tenants they put in were terrible and broke many conditions that were supposed to be in the lease which the real estate forgot. The real estate did not do anything we asked and in the end we got rid of them and the tenants. Lucky for us they left without a fuss.



Next we had some “friends” of mine move in which was all good, or so we thought. They wanted to paint, which was fine with us and do a few other things, which we agreed to because they had a friend who was a builder and was going to be doing it for mates rates. She also had a job which required her to organise the repairs on homes so she had a lot of connections.



Well, they lied to us, did a dodgy job themselves and we were not happy at all. Add to that when we went up to do an inspection we discovered they had animals which they did not tell us about. That means they breached the lease. We gave them the appropriate notice and no longer speak. They weren’t real friends and it was no real loss.



I would not recommend leasing a property to good friends.



Now we had a bathroom half finished, a garage full of crap and a few other things that had to be fixed. We lived interstate and needed someone in our property asap. We were lucky and my mother in law was able to find us some awesome people who have been fantastic.



It has been a good experience and one I am glad I did. If I was to rent a house out again I know much more know and it would be a better experience than it was this time round.

6 comments :

  1. Thanks so much for stopping by and for your comment. If you are contemplating homeschooling, let me just pipe up with GO FOR IT! :D This will be my first year and I am so excited! It's a relief to start when they are young like this because my children won't know the difference if I goof up a bit as I'm learning (and I'm sure I will). :D

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  2. Being a landlord, especially interstate, is very difficult. If you can do that, homeschooling will be a breeze. Just remember like your so called friends that you rented to, you may need to be tougher as "teacher" than you would be as "mom". Good luck, I look forward to hear how it's going.

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  3. same goes if your renting... know the law!
    really good post though, I strongly agree with treating a rental property like a business transaction, because in reality, that's what it is!

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  4. My first husband and I owned a couple of homes that turned into rental properties. It was a big hassle and is not the way I want to build wealth.

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  5. thank you so much for the nice comment on my page!! i'm now following you back!! you have a great blog!!
    Aimee

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  6. I bet people often think that renting will be not that hard, but I would think it would be a lot harder than you think!

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