Biggest Hassle with Property Investment

Hey Guys,

I've only just come across this site and forum and I've been non it for hours already! Such a great source of information. So this is my first post.

I was wondering from all the investors out there - whats the biggest hassle/what would you never want to deal with again regarding holding your investment property?

 

Dealing with incompetent property managers. A good one is worth their weight in gold. Cheapest is very rarely the best.

 

Hi interest rates and no growth. The worst.

 

Yes, incompetent property managers seem to be everywhere. In their defense, I think the managers have to deal with such a large portfolio which the companies give them, its hard to keep up with their tasks/work.

 

Tenants!

 

Welcome. If you are planning to have a buy and hold strategy long term I'd say maitence/repairs is the biggest hassle.

 

Haven't seen this for the last few years... in NSW and Vic at least

 

Yep agree. This was the issue i faced with my own investment properties back when i worked in another industry, so i fixed it

 

Maintenance/tenant damage. This is largely looked after by the property manager, so it's more just about forming the right team around you to mitigate the issues.

For many people the biggest hassle is trying to keep securing finance to grow your portfolio - getting the money is the biggest source of angst/anxiety - spending the easiest.

 

Constant maintenance with old houses. it seems as though if you buy off an owner occupier its like they have never maintained anything, and everything seems to break a month or two after new tenants move in.

 

Net yields are so low, which is the maintenance angle in part, finding and keeping good property managers. Constant turnover of tenants, would love a model similar to some countries where leases are much longer and the tenant is responsible for most of the maintenance.

 

For me, tenant turnover is the biggest hassle that is experienced "routinely" whilst minor renos/freshen ups is second.

Turnover almost always results in some vacancy (even if only a few days) and costs to relet the property. Even if it's forced turnover (i.e. you changing the tenant for any number of reasons) it's still a pain and it's always better if your tenant stays for many years with reasonable rent increases on rolling leases...wouldn't it be nice!

Freshen ups take a bit of time to organise and you have to decide what to do, work to a budget to ensure bang-for-buck in terms of rental and asset value and then try to make it all go to plan to minimise vacancy whilst working with tradies and your PM.

Of course, having an excellent property manager helps with all of the above and minimises the pain so they're always the rock that I lean on to help. As has been stated, it's sometimes hard to see the value in a PM (or the difference between a good and bad one) until something changes.

In the end, investing requires a lot of time and work whichever way you look at it as if it were easy, everyone would have 20 properties! Education and persistence is the key.

- Andrew

 

Hot water system that all seems to go at the same time!

 

" **** "

But they've been banned ..... for the moment

Cliff

 

Not for me. I have had some great tenants.

Best: great tenants, capital growth, cashflow, having your IP rezoned from a 2 unit site to a 4 unit site!

Biggest hassle: bad tenants.

 

No tenants can also be a hassle .

Cliff

 

Wow! Some of those hassles, really aren't.

Over all the properties we've ever had & all the tenants we've ever had, the absolute worst time we've had has been Property Manangers, and I'm a staunch believer of having a Property Manager.

 

My tenants have always been great.. never had a missed payment.

My main issue has been Property Managers and the lack of understanding that I dont own a money tree.

For instance they will arrange electrical repairs one week and then get an electrician out again the next week for something that could have been fixed at the same time.
Or organise a quote to fix sometjing for $5000 which i then sourced myself for $1500.

They arent necessarily looking to minimise my costs in the same way I would.

 

I don't really see any aspect of property investing as a 'hassle' because I made the choice to buy houses, deal with banks, house tenants, manage cash flow etc. There are certainly challenges along the way but I don't see any of it as a 'hassle.' Completely my choice. I could just as easily sell up and avoid all 'hassles'. I take complete responsibility.

 

I have had a smooth run.

However I knew a guy who bought a subdivided property off his neighbour without getting a survey done. Anyway the neighbour accidentally built part of the house (about 15cm the full line) outside of the sold property.

Anyway. It only came to light when my mate tried to sell the property. The neighbour complained that the property for sale was on his property (even though he built it) and it stopped the sale process for about 8 months.

So the biggest problems can happen on purchase. Do your due diligence.

I have had a commercial property where the tenant tried to take the airconditioner claiming it was part of his fitout. He went into liquidation and that was horrible as well.

When he left he just ripped everything apart. All the cords were ripped out before he left and the electricians had a fit when they say the exposed cabling just lying around.

He even took the carpet squares.