Friday, 31 August 2007

Property Inventory - Why It Makes Sense For Landlords To Have One?

Inventories For Landlords Reduce Loss And Dispute
Too Many Investment Properties & Holiday Homes In Australia, Have No Asset Record / Inventory Of Property & Contents.

Why Gamble With Your Investment?

A complete asset record, often termed 'inventory' plays a crucial role in:
  • Preparing for loss through natural disaster, accident or theft.
  • Reducing tenant versus landlord disputes.
Those people whom have been unlucky and suffered a loss or dispute, often record an inventory after the event. There is nothing like being prepared!

A landlord's inventory is a record of property and contents at the commencement of tenancy. Recording the condition of property and contents, items that may be included in the tenancy.

Many landlords, are reported as not having an inventory of their property. An inventory that would clearly define the:
  • State of decoration and fittings.
  • Type of appliances and condition.
Landlords need a system where they have 'on hand' information and can prove issues legally. A system where they can prove:
  • The condition of the property at start of tenancy.
  • What brand of white goods are installed.
  • The type of furniture provided.
  • The condition of the pool pump.
  • Fair wear and tear on the property and its contents.
An inventory can easily prove these facts! If the tenant is supplied with a copy of the inventory, there is less chance of a dispute. The inventory easily proves the condition of the property and the contents at the time the tenant arrived.

Statistics by Woolcott Research Pty Ltd report:
  • 40% of tenants default on rent or damage property.
  • Less than 50% of landlords have 'landlords insurance'.
  • 1 in 3 rental properties have no rental agreement in place and have no inspections.
  • More than 1 in 3 landlords do not screen the tenant for previous rental history, employment & banking references.
Why take all these risks with your assets, your main investment?

Surely it makes sense for any landlord whom wants to ease the thought of tenancy and make it an enjoyable experience, to make sure there is an inventory taken at tenancy 'check in' and the inventory is updated at 'check out'.

Landlords Taking Their Own Inventory.

A large numbers of landlords do their own inventories and this is good news. There is no set 'standard' for a property inventory, so make sure it is a descriptive accurate record, properly formatted and easy to understand. If your going to go for the best, you would take a Digital Photographic Inventory backed up with a 'Property Condition Report' / 'Schedule Of Condition' and relevant documents. Having all of this information would mean that you are:

  • Prepared for any dispute.
  • Totally prepared for any loss through natural disaster, accident or theft.
  • Increasing tenant retention by both parties knowing where they stand.
  • In a position to forward the inventory & documents easily to insurance and authorities.
Landlords Using A Home Inventory Service.

Landlords often want someone to take inventory for them. Someone they can trust to get the job done quickly, accurately and professionally. If the property is hours away or the landlord is busy, it is difficult! Not knowing of anyone offering a service of this kind in the area makes it impossible! What you need is a digital photographic inventory business or more commonly known as a Home Inventory Service. A home inventory service will do what you want and supply you with what you need! An inventory that can be easily stored, mailed & transmitted to the necessary authorities.

It has been reported that rented properties have a higher % of break-ins [1.5 times higher than non-rented - homes burgled is 1 in 4 being 1 in 3 in cities - NRMA report 2007]. This is something that the tenant and the landlord need to be aware of. Insurance statistics report that most tenants do not have insurance. Not just risking the loss of their contents but also damage to the property and contents. Not forgetting damage caused by a burglar, it is best to seek advice on the type insurance cover. A Digital Photographic Inventory will increase yours and the tenant's feeling of security along with giving peace of mind.

A longer tenancy is easily possible making it less obvious that the property is rented, compared to changes in new tenants every few months. Letting a prospective tenant know you have a professional inventory taken, can only increase the chance of the tenancy commencing and being extended. You can always discuss with the tenant about splitting the cost of the inventory or it can be built into the rent.

Landlords Being Prepared!

Lastly let us not forget the subject of fire! Under regulation your property has to have Smoke Alarms, but what have you got for the tenants to put the fire out with? Fire Extinguisher and Fire Blanket are the best items for this task. It pays to get both of these items installed. Do not forget to make sure there is a Evacuation Plan and Disaster / Emergency Kit. Ask your Home Inventory Service for information and advice. You may have insurance for the property but what about lost tenancy income! Ask your insurance supplier about this one!

Landlords that include a 'Digital Photographic Inventory' and 'Property Condition Report' into their management plan, will be prepared for loss and have the ability to enjoy a more stable tenancy.

For more information on Home Inventory Services contact Aussie Home Inventories today!

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