The unexpected expenses property investors may not see coming
As a rental provider, you probably know the regular expenses you need to cover for your investment property. These expenses might include your management fees, body corporate fees if you own a unit, apartment or townhouse, rates and larger jobs such as replacing appliances or floor coverings. But what about those expenses you haven’t thought about? Sometimes these may be associated with something going pear-shaped at your property, like if a renter stops paying rent and leaves the property owing rent or extensive damage occurs through no fault of your renters.
While it can be difficult to think about, having an idea of the unexpected expenses associated with having an investment property is a good way to be prepared and consider what you might do in one of these scenarios. This article outlines some of the unexpected costs you may encounter as a rental provider and what you could do in these situations.
When the rent stops flowing
Sometimes a renter may stop paying rent. No matter the scenario, whether the renter has “done a runner” and left the property or they’ve passed away, there are options for you to claim back your lost rent. For a renter who is wilfully avoiding their rent payments, you need a property manager with a specific process to chase up the overdue rent and if you have landlord insurance (which you should) and it covers lost rent, you can make a claim using this route as well.
The renter vacates and leaves items behind
If a renter vacates your property and leaves large items behind, such as furniture, you may need to pay to get these items removed asap in order to re-lease the property quickly. You’ll need to claim the renters bond to re coup the funds or check if your landlord insurance will cover the costs incurred in these situations.
Pets causing damage
The various pieces of residential tenancy information in each state are gradually changing to make it harder for rental providers to refuse renters from having pets. With this in mind, it’s important to make sure your insurance policy has provisions to cover the costs of damage caused by pets.
Black mould and protection from the elements
Mould is a serious issue, and once it’s in a property, it can be very hard to address. Similarly, natural disasters and severe weather events can cause property damage. Make sure your policy covers your property for mould issues and damage caused by severe weather events.
Owning an investment property is a great way to build your wealth and add other sources of income to your household. Being aware of the unexpected costs you may encounter in different scenarios is a good way to be prepared. Importantly, this doesn’t need to be cause for alarm as having an experienced property manager who has often seen and dealt with these problems before can provide you with the support and advice you need.
Remember, this article does not constitute financial or legal advice. Please consult your professional financial and legal advisors before making any decisions for yourself.