Question: What are some of the risks or challenges for a first-time property investor? 

Answer: By Carolyn Parrella, Executive Manager, Terri Scheer Insurance 

Owning an investment property can provide many benefits, but it’s also a substantial commitment. 
With preparation and dedication, property investment can be an attractive wealth creation strategy for Australians of all walks of life. 

However, like any investment, it’s not without its risks. Concerns over unpaid rent, unoccupied property and unruly tenants rank highly amongst the worries that may keep landlords awake at night. 

• Unpaid rent
Concerns over rent being paid on time can become a major stress point for property owners relying on the income. It’s an issue that needs to be addressed as soon as possible.
If the tenant falls into arrears, a breach notice should be sent for non-payment of rent. If the tenant still doesn’t pay rent after receiving the first notice, a second notice should be sent to terminate the lease and request vacation from the property. 

Landlords should complete thorough checks of potential tenants’ references during the screening process, specifically looking for issues with missed or late payments. 

• Unoccupied property
Having a rental property unoccupied can place significant strain on an owner’s cash flow. 

Presenting a well-managed property may help to broaden your pool of prospective tenants, reduce time and money spent on advertising and decrease the number of days your property remains unoccupied between tenancies. 

Items once considered luxuries, such as broadband internet connection and satellite television, may now be considered standard requirements. Not offering these comforts can make a real difference to the property’s appeal and may impact the amount of rental income the landlord earns. 

• Managing paperwork
There is a sizeable amount of paperwork that goes with being a landlord and left unchecked it can build up and become a burden. 

A good property manager can save landlords from potential paperwork headaches. 

• Maintenance issues
Leaky taps, broken tiles and repairing faulty appliances are among the maintenance issues that can create headaches for both tenants and landlords. 

Landlords who skimp on maintenance with quick fix solutions to try and generate more profitable rental income often find that it actually costs them more in the long run. 

With the popularity of home renovation television shows like The Block, landlords are given the false impression that improvements to their properties are achievable within tight timeframes and with limited practical experience or knowledge. 

Do-it-yourself fixes can result in substandard workmanship and legal liability claims if there is an injury or loss resulting from a safety hazard that has not been mended. Underqualified handymen should leave maintenance to the professionals as the expense is also tax deductible. 

• Unruly tenants

No landlord wants to wake up to the news their property has been trashed. 

While most tenants do the right thing, there is a minority that rebel against the norm and violate their lease agreement by behaving poorly or undertaking illegal activity at the property. Some tenants may breach their pet policy, fail to adhere to noise requirements or smoke at the property. Although it’s a rare issue, other tenants may use the property to distribute or manufacture illegal drugs. 

Tenants involved in illegal activity go to great lengths to hide their activities. Routine property inspections can help mitigate these risks by identifying problems before they escalate. 


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Carolyn Parrella

Carolyn Parrella joined Australia's leading landlord insurance specialists, Terri Scheer Insurance, in 2004 and was appointed Executive Manager in 2009.
Carolyn oversees all operations within business, which aims to protect landlords against the risks associated with owning a rental property. These include malicious damage by tenants, accidental damage, legal liability for occurrences on the property that cause death or bodily injury, and loss of rental income as a result of damage to a property or a tenant absconding.
As a South-Australian based national insurance firm, Terri Scheer Insurance is the only company in Australia to specialise solely in landlord insurance.
Carolyn also owns two investment properties.

For further information, visit or call 1800 804 016.