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Key Costs to Consider as a Landlord

As a landlord, it’s essential to be aware of the upfront and ongoing costs associated with property investment to maintain a stable cash flow throughout the holding period. This article will outline the key expenses that you need to consider as a landlord.

Landlord Insurance

Landlord insurance is a vital expense that all landlords should consider. This insurance covers tenant-related risks, including loss of rental income and damage to your property by a tenant. The cost of this policy depends on the value of the property and its risk profile.

Repair and Maintenance Costs

As a landlord, expect to encounter several repair and maintenance costs throughout the year. These expenses may include fixing small water leaks, repairing a door hinge, or resealing wet areas like the kitchen and bathroom. Large repairs, such as replacing air-conditioning units or major appliances like the oven or dishwasher, may also be necessary. As a result, it is advisable to have cash set aside for routine repairs, maintenance, and larger emergencies.

Finding New Tenants

Sourcing a new tenant for your properties can be a lengthy process. You will need to cover mortgage expenses while the property is vacant and pay let fees once the property is leased. The longer the property is vacant, the more expenses will accumulate. Therefore, it is essential to price the property appropriately for the market and ensure that it is appealing to quality tenants. Consulting an experienced property management agency can help you achieve this.

Rates and Body Corporate Fees

Council rates, body corporate fees, and potential maintenance fund fees are significant expenses that landlords should know. If you own an apartment or are looking to add one to your portfolio, you must expect potential repairs and maintenance in common areas that may cause increases in body corporate fees. It is important to understand the large repairs and maintenance that may be required in these areas to plan for potential increases in body corporate fees and one-off payments to fund these projects.

As a landlord, it is crucial to be aware of these expenses to maintain a stable cash flow and build long-term wealth. Having a good understanding of these costs will make you a more effective and profitable landlord.

If you would like to learn more, contact our property management team today.