We asked property managers about the most common mistakes landlords and renters make — and how to avoid them

Posted on 3 November, 2023

The rental and property market can seem a scary place – especially during a cost-of-living crisis.

So, if you’re a renter or a landlord, a bit of free expert advice probably wouldn’t go astray, right?

To help Canberra landlords and renters navigate what is an understandably stressful time for people on both sides of the fence (or should that be rental contract…?) we’ve sought some sage advice from LJ Hooker Canberra City, whose team recently scooped Top Property Management Office (Volume) Award, Top Business Development Property Manager and International Champion Business Development Manager out of all the LJ Hooker agencies across ACT/NSW.

What are some common mistakes renters can avoid making?

“Jumping on below-market value properties,” says Grace Bowman, a Property Investment Manager. “It’s hard to not go for the perfect property when it’s also half the price of a similar one in the area, but it’s one of the biggest mistakes you could make when looking for a rental. The low price is enticing, but in 12 months’ time when the rent is increased dramatically because the property is below market value, you don’t want to be the one slapped with the huge increase.”

“We see a lot of tenants running into trouble by not communicating with their property managers on a regular basis,” adds James Herbert, Director of LJ Hooker Canberra City. “We try hard to make sure we develop and maintain great relationships with our tenants so that they feel comfortable reaching out when there is an issue or problem. The vast majority of our landlord clients are happy to maintain the property and make improvements where required.”

What are your top tips for renters?

“Make sure you choose your housemates wisely,” advises Stacie Baker, Head of Property Management and a Business Development Manager with LJ Hooker Canberra City. “I have seen many living situations go pear-shaped and end up impacting tenants financially.”

As for getting your foot in the door, the message seems to be: the early bird gets the dream rental.

“I always tell people to come to the first open home and apply straight away if they are interested,” says Danni McSpeerin, an Executive Property Manager.

“We often have tenants apply three or four days after the open home and the property is already gone. Check in with the property manager to see if they have everything they need. If you miss out on this property, they may have another one that you haven’t seen that they can transfer your application to.”

“The most common approval turnaround is within the first 24 hours, so it is important you submit your application straight away and have all the information complete as gaps and vague answers do impact the decision as to whether or not a landlord will approve their application,” adds Stacie.

What is a common mistake that landlords should avoid?

“One of the biggest mistakes I see when chatting with my landlords is selling out of fear. The rental market can be tough at times, and this paired with the financial crunch of a mortgage can make owners feel like they need to sell. I always encourage my clients to hold in there,” says Grace.

“The rental market changes and fluctuates with prices – constantly. The best thing to do is hold onto your investments; don’t make the mistake of selling too soon without riding out the quiet periods.”

Stacie says the most common mistake she sees is owners trying to cut corners by managing their own investments to save money or choosing to go with a ‘cheaper’ option. “This ends up costing the owners more in expensive mistakes that would have been avoidable when working with an experienced and established agency that is across all legislation changes.”

James adds that choosing the right property manager for your goals is key.

“The biggest mistake I see property owners making is choosing a property manager who only specialises in tenant management,” says James.

“Great property investors always team up with a property manager who acts like an investment manager and specialises in all aspects of the financial performance of the property including revenue maximisation, vacancy risk reduction, strategic renovation and maintenance and portfolio growth.”

Finally, Danni encourages landlords to avoid bargain hunting when it comes to management.

“Oftentimes, going with an agent just for the cheaper fee will end up costing you if the agent doesn’t have the experience to deal with a difficult situation or achieve the best rental return for you.”

What is a common myth about being a landlord that you’d like to bust?

“That all investors are well-off and don’t care about their tenants,” says Stacie. “Most of our clients are mum and dad investors who have worked hard to establish themselves to be in a position to invest. They too were most likely renting at one point in their lives and do care about the people living in their investments. Most people want to do the right thing.”

“Another myth is that landlords increase the rent because their tenants aren’t great, or they want more money,” adds Grace. “Landlords increase the rent because they have a mortgage to pay, and they want to achieve market value for their investment. The market changes and so do rental prices. Increases are done to make a return on their investment, not to aggravate their tenants.”

“In fact, in many instances, our landlords will often provide rent assistance or relief to tenants struggling to make ends meet,” says James. “We saw a lot of this through COVID where many of our landlord clients were more than happy to provide rent pauses or reductions where the tenant was having trouble.”

What’s your top tip for landlords or those looking to become landlords?

“Do your research. Ask questions. Seek experience. Management fees look scary, but this is not always the be-all and end-all. When you pay for quality and experience it is going to cost money. Talk to the experts and get an understanding of what services are on offer,” says Grace. “You won’t know what you’re paying for unless you ask the nitty gritty questions.”

For James, it’s all about looking to the horizon when it comes to this crucial investment.

“Stay focused on longer-term results. Investing in property is a long game. We often see property investors purchasing property and selling too soon before significant gains are made. Our best and most successful landlord clients have owned some properties for 30 or 40 years and have ridden all of the ups and downs and bumps and lumps of the property cycle.”

Danni couldn’t agree more.

“Find a property in a good area that is going to continue to improve on value and investment over the years. Property investment is a long-term game and doesn’t always turn a profit overnight. Completing a health check on your mortgage from an experienced finance broker and completing a tax depreciation schedule can also have a huge impact.”

Finally, Stacie says it’s all about keeping your eye on the prize.

“To have a realistic approach when it comes to investing in properties. Know that this is a slow burn and it will pay off with consistency and time, property investing is a long-term game.”

“When working with a property manager it is always good to be transparent with your situation so that you can work together to get the best property goal, always know a good property manager is a part of your team and can provide solutions you didn’t even know were available to you.”