Thinking of Becoming a Landlord? Here’s What You Need to Know
So you’ve finally finished flipping your investment property, and it’s looking fantastic! You’re ready to find your dream tenants and start seeing that cash coming in.
The hard yards aren’t entirely over yet, though. While you can put down your hammer and paintbrush, you now need to pick up your pen and get intimate with your state government’s website. Because being a landlord requires you to be aware of your legal obligations and responsibilities. It’s more than adhering to what’s expected of you by law, however. If you want to attract and keep the right tenants, there are a few other things that you should be doing too. Here’s what you need to know about being a landlord in Australia.
You must follow compliance to ensure that the property is safe
As the owner of a property, you must ensure that the structure is entirely safe for people to inhabit. This means following state-specific compliance. For example, in QLD, smoke alarms must be installed in all rental properties, and strict guidelines must be followed in regards to blind and curtain cord safety. It is your responsibility to fulfil any legal obligations concerning property safety so that your home is ready for your tenants to move in. You must check that your property meets these requirements every time a tenant changeover occurs.
Stringent vetting of potential tenants is crucial
Running security checks on potential tenants is an absolute must for every landlord. As is checking references from previous landlords or agencies. You can also choose to request further personal references in the rental application process. You may want to check that your prospective tenants aren’t on the national tenancy database; a list of tenants who have had problems with their previous rentals, including late payments or damages to the property.
You should collect a bond
Most new landlords will already be aware of the fact that they need to collect a bond off of their tenants upon signing a lease agreement. This assures that damages to the property will be covered, should you discover any upon the end of lease inspection. It can also cover any outstanding rent that has not been paid. However, it’s important that you lodge this bond with your state’s residential tenancies bond authority. It is against the law to hold this bond yourself.
It’s your responsibility to maintain the property
While it is the tenant’s responsibility to foot the bill of any damages they inflict upon the property, it is up to you to repair general wear and tear. This may include leaking taps, loose light switches and windows that have become stuck due to moisture. As mentioned previously, it’s essential to respond promptly to repairs requests from the tenants, in order to keep the property safe. Ensure that all repairs requests are lodged in writing so that you have a clear paper trail that you can call back upon if any disagreements should occur.
Likewise, keep all your receipts from tradespeople who have carried out repairs work, dated and filed away for safekeeping. Even if requests were made over the phone, it’s always wise to follow this up with an email recapping what was discussed and what action will be taken to rectify the situation, so that everyone is on the same page, and there is clear evidence of all correspondence. This goes for all communication between tenants and landlords. No one wants to go to tribunal, but unfortunately, it does sometimes happen, and you may need evidence to support your argument.
Landlord’s insurance can save you thousands down the track
For those nightmare expenses that cannot be covered by bond alone, landlord’s insurance can be a real lifesaver. Landlord’s insurance can vary dramatically between providers, however, so be sure to read the fine print and find a policy that suits your situation. Landlord’s insurance can cover you from malicious damage caused by a tenant, theft by the tenant and the legal costs involved with taking a tenant to court. It’s important to note that your standard home insurance is not the same as landlord’s insurance, and will not cover you against the same things.
Hiring a property manager will save you a lot of time.
All of the information above sounds like a lot of work, we know. Because in many aspects, being a landlord can be like a full-time job. Not ideal for someone who already works five days a week! And we haven’t even touched on the number of phone calls you could be taking every day from tenants requesting repairs, asking questions to do with their rent payments and requiring instructions on how to operate utilities. Imagine trying to juggle this with your work and social life!
Hiring a property manager can certainly make the task of being a landlord much easier. A property manager will handle all tenant contact on your behalf, take care of all the paperwork and advise you on any legal requirements that you need to fulfil. A property manager will also use their experience and knowledge to assist you in achieving the best income strategy for your property. They will know when it’s time to increase the rent by reasonable increments, how to deal with tenant concerns, and who to call for emergency repairs. Want to make your debut as a landlord hassle-free and smooth-running?