Owning a piece of real estate in a hot market like here in Australia has many benefits. Whether you choose to live in the property or to let it to prospective tenants, there are advantages and disadvantages to both.
Dual occupancy homes present owners with even more complex considerations and inherent advantages over single-family detached housing. If you’re planning to become a landlord for a dual occupancy property, keep these five tips in mind:
1) Landlord Insurance is a Must-Have
A lot can go wrong as a landlord, which is why insurance is a must-have for peace of mind and for the ability to make a claim if something does go wrong. Given the value of your investment, it only makes sense that your insurance should cover all of the important cases you may come across when letting one or both of your properties.
Things to look for in an insurance package include malicious damage from tenants, loss of rent due to events covered by the insurance, rent default, and tenant theft. Since the pandemic, however, the majority of insurance providers have ceased giving rent default insurance, so shop around as this specific event may be likely in your area and could cost you a considerable amount out of pocket if you lack insurance.
2) The Real Estate Market Never Sleeps
Just because you’ve purchased your dual occupancy home, whether paid in full or with a mortgage, you’ll still want to keep an eye on the real estate market. Although you may no longer be interested in browsing listings as a potential buyer, knowing the general trends in the market can help you make better, more calculated decisions regarding the properties that you currently own.
This could include adjusting rent, within legal limitations, to keep up with changes in interest rates for a mortgage, attracting quality tenants with fair prices, and/or to reduce vacancies.
3) Keep On Top of Your Responsibilities and the Laws
A landlord has a lot of legal obligations to abide by. Tenancy laws can be complex to navigate, but they are nonetheless important to know so that you do not inadvertently cross a boundary with your tenants (or vice versa).
If anything does go wrong and a dispute arises with your tenants, knowing the changes to tenancy laws and your own rights and responsibilities can potentially save you thousands in court litigation (should it ever get to that point).
4) Improve and Invest in Your Properties
Ideally, you’ll want to keep your tenants happy with fair value for their money. This means providing them with all of the basic amenities, but there’s more to it than just that. Anything from a leak in the roof to faulty plumbing or electricity can cause great disruption to your tenants and these sorts of problems must be rectified as soon as possible.
In addition to routine maintenance and repairs, it will also pay off in the long-term to continually improve and upgrade the property, especially whenever there is a vacancy so that prospective tenants will be attracted to the property.
5) Keep Some Liquid Capital On Hand
Following on the previous point, keeping some cash on hand is invaluable for all of those unanticipated repairs and maintenance you’ll certainly have to perform on occasion (or, more realistically, pay a tradie to do).
Keeping some funds freed up is also good measure for proper cash flow. Being a landlord is like running a business, and businesses need good cash flow at all times to keep operations running.
Trevor Homes
Design your ideal dual occupancy home with the experts at Trevor Homes.
