Becoming a landlord can feel overwhelming. There is so much to organise, such as preparing your property to rent, vetting prospective tenants and setting up a lease. We’ve put together a handy checklist of things for new landlords to consider.
It is always easier to decline a tenant application than it is to remove a tenant you are not happy with from your property. Think carefully and decided what sort of tenant you want in your property. Ensure you do due diligence at the start of the leasing process: vet applications carefully and always ask prospective tenants for references.
There are many things you can do to “tenant-proof” a property before you rent it out. If you are repainting or replacing flooring prior to leasing your property, source the most durable options possible, such as hardwood flooring or tiles, instead of expensive carpet in high-traffic areas. Choose carpet in a serviceable colour and is easy to clean and remove stains from. Select wash-and-wear paints in colours that are readily available so it can easily be touched up if necessary.
In the garden, prune back all shrubs and hedges and remove any dead plants. Mulch garden beds to retain moisture and suppress weeds. If a property is in good condition when tenants move in, then the right tenant will respect your property and try to maintain the standards you have set.
Leasing a property involves quite a bit of paperwork, and rightly so, as large sums of money such as bond and rent are exchanging hands. Ensure that the paperwork you and your tenant complete is correct. Each state has its own body for securely holding bond (such as the ACT Revenue Office’s Rental Bond Portal), so make sure you follow the correct process in your state.
There are strict rules surrounding visiting your property once it is tenanted, especially to perform an inspection. Landlords are required to give their tenants sufficient notice before entering the property and need to adhere to this. According to the RTA (Residential Tenancies Act) a landlord or agent can only enter a property “to inspect the property; to carry out repairs; to show the property to prospective tenants or purchasers; for health and safety reasons” and are not permitted to access the property on Sundays, public holidays, before 8am or after 6pm, other than “for carrying out urgent repairs, for health and safety reasons, or with the consent of the tenant cl 76)”. Routine inspections require 7 days’ notice in writing. Be fair to your tenants and don’t impose anything you wouldn’t be comfortable with if you were in their position.
Ensure your tenants set up a direct debit to pay their rent at the commencement of their lease, and that this is adhered too. Once a tenant gets even a week or two behind in rent, this can quickly snowball. If they leave unexpectedly still owing rent then you can be left significantly out of pocket. There are many compelling reasons to use a property manager, but timely payment of rent is a big one. Agencies are set up to manage rental payments and send reminders to a tenant if rent isn’t paid on time. They also have tried-and-tested processes in place to quickly react and prevent the landlord from losing money.
Most agencies inspect properties every 6 months. You can also do an initial inspection (within the first month) for new tenants, which is a good idea to ensure they are treating the property in the way you expect. An initial inspection is a good way to determine if there are any problems that need resolving before they become a bigger issue. Regular inspections are also a good way to check your tenant is not breaching their lease i.e. subletting or keeping pets if they are not permitted.
Be sure to follow up on any issues that arise following a property inspection, such as leaks or damage to the property that might result in a bigger problem and cost in the future. As with any house, an investment property will still need ongoing maintenance such as interior and exterior painting, pruning of trees, etc. Whilst many jobs, such as regular garden maintenance and pruning of small shrubs are usually the responsibility of the tenant, the larger costly jobs are the responsibility of the landlord. The sooner you take care of them, the less likely they are to hurt your hip pocket. For example, you don’t want the limb of an unkempt tree to fall on the roof of the property next door.
If your tenants contact you or your property manager regarding a problem with your property, resolve it as quickly as possible. If it is not a problem that can be fixed straight away, keep up a good line of communication with your tenant and let them know what you are doing to resolve the issue. Treat your property as a business, and your tenant as a customer. Their comfort should be your utmost priority, especially if they are a reliable tenant you want to retain. Keeping the same tenant in a property for a longer period of time is preferable to finding new tenants as your property will suffer less wear and tear from moving.
Don’t be too hard on yourself. If this is the first time you have leased a property you be feeling overwhelmed, so the services of an experienced property manager are truly invaluable. Finding the best tenants for a property and managing them throughout their lease is what they do every day. The cost of a property manager is one of the best investments you can make for your property, and for your peace of mind.