One of a rental agent’s major functions is ensuring that your client’s property remains in a reasonable state of repair. This is important – damage to a rental property eats into the potential profits that can be realised.
To help minimise the possibility of tenants causing damage, and to lower the chance of making a loss in the event of damage, use these tips:
Watch out for tenants leaving early
A large portion of damage to rental properties is caused by tenants leaving early. Because tenants who do this often leave bills unpaid, it can lead to a big problem for rental agents and owners alike.
In order to keep the possibility of this happening to your rental properties to a minimum, it’s worth keeping an eye on the pattern of payments made by tenants. Repeated late or erratic payments could be an indicator that your tenants are likely to leave early, and with you holding the bill.
Unfortunately, while this can be a useful indicator, on its own it’s not enough to protect you – other steps need to be taken.
The right deposit
The first part of making sure you don’t get caught out involves the security deposit.
Traditionally, this is equal to one or one and a half months rent. However, this may not be enough to adequately cover any damages.
For this reason, we’d encourage you to ask for two months’ rent as standard. This will serve the dual benefit of discouraging your tenants from causing damage in the first place (as they stand to lose more money), and will more effectively cover any damage and unpaid bills that you do have to deal with.
Regular inspections are the most effective way to ensure that your property is protected. These should include incoming and outgoing inspections, as well as regular interim inspections.
While the vast majority of contracts will include these as a matter of course, the fact is that not many agents or owners take the time necessary to carry out these inspections, even when they could be saving them a lot of money.
During in your inspection, take note of not only any damage in evidence but also the general attitude in which your tenants live. This can be a big tip off in how they treat the property generally.
But what if, after you’ve done all of the above, you’re still left with damage? This is when rental property insurance steps in.
Unlike home or building insurance, this type of insurance is specifically targeted to rental owners. It’s designed to protect you against not only damage but also non-payment of bills. It’s your last line of defence and it is well worth the price of admission.