Owning investment properties can be both financially and emotionally rewarding. It can also be fraught with risks. Timpany Walton’s experienced team of property lawyers can help you avoid the potential pitfalls.
Common mistakes landlords make
There is a common misconception about earning money from a rental property. While it is typically considered “passive” income, the day-to-day management of that property should be viewed as anything but passive. These are some of the most common mistakes landlords make and what you can do to avoid making them with your properties.
Misunderstanding the tenancy agreement
Tenancy agreements are a vital part of renting out your property. It contains essential information about the tenant’s rights and your responsibilities and can have serious consequences if you fail to comply. Before you sign the tenancy agreement, ensure you’ve fully understood it; this will assist in ensuring you avoid misunderstandings with tenants and liability surprises on both sides.
Our commercial team are experts at Tenancy Agreements and can answer any questions or concerns you have.
Not limiting the use of the property
With Airbnb and other services providing opportunities for tenants to sublet and rent out rooms, outlining the terms of use of your property in your tenancy agreement is important. Some things you could mention in the agreement to avoid your home being turned into a business or grounds for illegal activity are:
- Using the property for residential purposes only
- That the property is not to be used for unlawful purposes.
- Tenants’ will not possess or use illegal substances on the property.
- That tenants’ will not allow guests to possess or use illegal substances on the property.
By outlining the terms of use in the agreement, you will ensure that your property will be used as you expect it to be used.
Insufficient Insurance Coverage
Too many landlords try to cut costs by purchasing less than sufficient insurance coverage. Some might even have the wrong type of coverage. Do not play it cheap with your insurance because it could cost you a lot more in the long run.
Be sure to speak with your insurance broker to ensure you are fully covered and your policy limits are adjusted to levels that will pay out enough to repair or replace what has been lost or damaged.
Know the law
Tenancy Law can be overwhelming. However, it’s important to familiarise yourself with it to protect both you and your tenants. Tenancy Service website is full of useful information.
From shared driveways and fences to understanding the small print in tenancy agreements, our team of experts assist with all property-related matters whether big or small.
If you need any advice on your responsibilities as a landlord please do not hesitate to contact –
Grant Proudfoot – Ph: 03 687 7386 | E: grant@timpanywalton.co.nz
Maarten Dirkzwager – Ph: 021 039 3225 | E: maarten@timpanywalton.co.nz
Alice Caird – Ph: 03 687 7381 | E: alice@timpanywalton.co.nz
Jenny Carter-Bolitho – Ph: 03 687 7383 | E: jenny@timpanywalton.co.nz
Stacey Blissett – Ph: 03 687 7394 | E: stacey@timpanywalton.co.nz
Comments are closed.