Buying your first investment property can be both exciting and daunting.

You’ve spent your hard earned savings and/or equity on an investment property, and now you take on there responsibility of being a landlord and the challenges of managing your new investment property to ensure you maximise your return on investment.

So to help you avoid property management mistakes, here is a list of what I would consider the "7 deadly sins” of property management committed by beginning investors and some tips on how you can avoid them.


Investing in property is about facts and figures, but all too often investors make the mistake of becoming emotionally invested in their investment property.

Sometimes the best investment is one that you can never imagine living in yourself. love house

Perhaps it needs minor refurbishment or doesn’t meet your lifestyle, but it’s a perfect fit for the primary demographic of the location.

Then there are the landlords who want to stamp their own personal style on their investment property.

This might include loud colours on the walls and garish flooring, but the best rule to follow in order to maximise your property’s rental and resale appeal is to always go neutral with the décor and wherever possible, select durable, hard wearing finishes.


You would never consider throwing half a million dollars into a new business without a business plan right?

But surprisingly, this is what a lot of investors who are starting out do.

They jump straight into buying an investment property without first formulating a detailed investment strategy/business plan, even though building a portfolio must be approached as a business endeavour in order to be successful.

Additionally, just as a new business owner must employ the best team to ensure their company takes off, so too must an investor surround themselves with experts who can help them make informed decisions, such as accountants and solicitors.

Far too often people get into property investment as a "hobby” and end up only ever owning one investment (which is just as ineffective as owning none), or up to their eyeballs in debt that they struggle to pay back.

Avoid this trap by replacing emotion with some business savvy.


One of the most frustrating aspects of property management are landlords who think the best way to make money is by not spending a cent on the upkeep of their investment property.

They fail to conduct repairs in a timely manner and can’t see the value in a coat of paint, new air conditioner or dishwasher or a kitchen makeover.

The fact is, minor renovations can not only add significant capital value to your investment, it can also increase your rental returns overnight.

General maintenance is also important as it will ensure your property’s value holds up and make it easier to re-let when required.

For this reason and to do the right thing by your tenants, it’s important to attend to repairs in a timely and professional manner.


You should always be nice to your tenants in terms of conducting maintenance as required and ensuring their property is a comfortable and safe environment, one thing I firmly discourage is forming a relationship with your tenants.

All too often, landlords decide to form a relationship with their tenants and then the problems start.

The tenants think that because you’re a friend, you might not mind too much if the rent’s a little late each week.

It’s always best to keep the tenant/landlord relationship on a business level and use a system like RealRenta or employ a professional property manager to act as your go-between.


It’s difficult to avoid the above mistake when landlords decide to look after their property without the assistance of a system or professional property manager.

Many landlords think they can save a bit of money on management fees, by choosing to "cut out the middle man”, but it can cost you quite a bit more in the long run if you take this route.

Not to mention the fact that there are alternatives to property managers like RealRenta that are inexpensive…and tax deductible!

A System like RealRenta can market your rental property to prospective tenants, manage the rental applications and check bad tenant databases.
The platform collects the rent on your behalf, does invoices/receipts and it even sends out reminders and breach notices, all automatically.

All communications between you and your tenants are done through the platform keeping that arm’s length relationship and keeps a log for when things do go wrong.

Tenants can even login and put maintenance requests through the platform and you can manage those requests.

All this saves you valuable time that you could spend searching for your next investment opportunity!


Having a depreciation schedule professionally done can save you at tax time.

house price down

Many landlords think that this is only necessary with a new property though and don’t fully appreciate the concept of depreciation.

There are numerous items in a rental property that can be depreciated at a certain rate, allowing you to claim a tax deduction on them.

I know of some property investors who manage to reduce their debt significantly just by depreciating as much as they can and using their tax refund to pay down their loans.


Some of the common mistakes property owners can make are,
Not having a lease agreement, Not filling in a condition report, Not understanding Tenancy laws, Not doing proper tenant checks and Not asking for a bond.

If you avoid committing these sins and instead, seek to understand the rules of the property investment game, your portfolio will generate heavenly capital gains into the long term and put you on a path to successful wealth creation.

Jason Gwerder
Friday, 11 March 2016

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