All landlords know that great tenants pay their rent on time. But many investment property owners don’t know the other benefits of having great tenants.
In addition to paying the rent on time (which allows you to pay your mortgage on time) having great tenants also promotes goodwill within the community (imagine how you would feel if your neighbours at home were investors and allowed noisy, disruptive tenants to move in)!
Here are some other reasons for having great tenants that you may not have thought of:
They look after your property
On average, the cost of maintenance of an investment property is around .025% of the value of the property per annum. So on a $400,000 property, the cost would be between $1,000 and $2,000 a year. Tenants who are careless with your property can double that cost quite quickly. Over 10 years, the extra cost to you could be as much as $20,000!
They often stay longer
Long—term tenants also reduce your cost over time. Most agencies charge a re-letting fee every time you have a changeover of tenants. This is usually 1-2 weeks rent + GST A tenant who renews their lease saves you between $4,950 and $9,900 based on a weekly rent of $450 and the average changeover fee charged. Not to mention the saved money in vacancy periods! If your property sits vacant for 7 days each year or tenancy change, that will cost you another $4,500 over a ten-year period.
When you add it all up in accordance with the above scenario over the course of ten years, the out of pocket costs are astonishing – $39,400 or almost 10% of the value of the investment! If that’s not a reason to select great tenants, I don’t know what is!
At Home Specialist Property Management our stringent tenant selection process ensures you can have faith in our ability to only recommend quality tenants for your final selection.