Nurture your investment

While a good letting agent may be in a position to vet and install a suitable tenant in a rented property, the home owner needs to take more responsibility as to who is living on the premises and how they are looking after this major asset. Lea Jacobs rep

INVESTING in the buy-to-let property market always makes a great deal of sense. However, how the property is managed once a tenant has been found is as important as the property transaction itself.

Judging by the number of rental agents out there, a large majority of homeowners choose to delegate the task of property rentals to outsiders, but unless the right agent with the right tools and knowledge is utilised, things can go horribly awry.

The importance of choosing a good letting agent with the right credentials cannot be over emphasised and it is certainly not only about collecting rentals on a monthly basis. The duties of an agent extend much further and employing someone qualified to do the job can save a great deal of hardship at a later stage.

Each owner is different and their mandate needs to be understood by the agent. No two homes are the same and different owners find different aspects of the deal important. For example, an owner who has spent a great deal of money landscaping the garden may want a tenant who shares similar gardening interests. In these circumstances, large dogs may be a no-no. The agent who understands the wants and needs of a landlord will, generally speaking, find the right candidate.

Most agencies promise the earth and issues such as background checks and credit checks are standard. However, some agencies do appear to take more care with this vital aspect than others. People do lie and confirming that a tenant does in fact work at a certain place and earns as much as he says he does, should be checked as a matter of routine.

Good rental agents also explain what they expect from the tenant and there will be clear procedures in place to not only educate the tenant but to highlight what will happen if the tenant defaults on any of the terms.

Obviously, the property itself is the most important part of the equation. Finding someone who looks after the property as if it were their own is far more difficult than most people believe. Interestingly, well maintained properties attract good tenants while homes that need attention invariably attract the wrong sort. Rent- ing out property is a two-way street and landlords can only really expect a tenant to take pride in something if the owner is prepared to invest in the property himself. This is important for absentee landlords to remember.

Leasing out a sectional title unit comes with its own set of challenges, not least the body corporate. Again the letting agent plays an important role because the wrong tenant can create havoc, not only for the owner, but for everyone else lin the complex.

Many agents believe that owners need to take more responsibility as to who rents their property. In some areas of Australia for example, while the estate agent will advertise the property for rental and make a short-list of potential candidates, essentially the final decision rests with the owner, who normally interviews each and every prospective tenant before deciding who will live on the property. In SA, however, few owners take the time to vet tenants once they have secured the services of a letting agent. It makes sense for a landlord to fully acquaint himself with all aspects of the person who is going to occupy such a major asset. Few people would consider leasing out their sports car to an unknown party and yet it seems almost standard practice in the world of property.

Neither the agent’s nor the homeowner’s work is done once a tenant has been installed. Keeping tabs on both the property and the tenant is an ongoing process. More often than not a tenant who pays his rent on time is left to his own devices. Although rental payments are an important part of the deal, an unruly tenant or one who neglects a property can cause headaches. For this reason, agents need to regularly inspect the property and furnish the owner with a full report as to what needs attention. If possible, an owner should conduct his own inspection at least once or twice a year to ensure that the agent is doing the job for which he is being paid.

Savvy investors do not sit back and bank on rental payments. Contrary to popular belief, being a landlord is not as easy as it sounds. As with every other investment, property is an asset that needs to be nurtured, ensuring that the owner gets the most out of the deal for many years to come.