Becoming a landlord is exciting, and a great way to increase your income, however, it can also be fraught with difficulties, whether you’re searching for the right landlord insurance, or simply deciding whether to leave your old sofa behind.
Whether you’re leasing out a property that has been your own home, or have bought a place specifically to rent, it’ll be good for your financial and emotional health to do things correctly from the very beginning. Here we give you a list of ten essential tips to keep your dream of being a landlord from turning into a nightmare.
1. Be a know-it-all: leave no stone unturned when it comes to gaining knowledge about your new business. You need to understand your rights and obligations as a landlord, as well as those of your tenant. Visit your local government website to get in-depth information about landlord and tenant rules for your state and see http://www.landlordsadvisory.com.au/aimsservices.shtml.
2. First impressions: your property needs to look spotless before you show prospective tenants around. Make sure there are no unfinished DIY jobs anywhere, such as broken cupboard door hinges etc. You also need to decide whether to lease it furnished or unfurnished. There are advantages to both, such as you may rent it out faster if tenants don’t need to buy their own furniture, but tenants also tend to stay longer if they’ve brought their own. If you go for furnished, your landlord insurance will obviously need to include contents.
3. A matter of timing: peak times for renting are late spring and early summer, so start showing your property then. If you can, avoid winter as there’s usually a dearth of renters and you may have to charge less.
4. Managing your property: if you have the money, deciding to employ a property manager will save you a lot of hassle. Otherwise, make sure you have a list of local handy men in your area to avoid scrabbling around the directory in the middle of the night when the toilet gets blocked.
5. Maintaining standards: be a good landlord when it comes to fixing things quickly and efficiently. Trying to do things on the cheap, or being slow to fix things, will cause bad blood with you and your tenants and ultimately be bad for business. You may baulk at the cost of maintenance when you first start out, but look on the bright side, these expenses are offset against rental income for tax purposes.
6. Insurance, insurance, insurance: need we say more? It’s vital to make sure you have landlord insurance to cover you against the unexpected. Visit http://www.nrma.com.au/home-insurance/landlord-insurance.
7. Be picky about tenants: you need to thoroughly check the background of your tenant before renting out your property. Ideal references are from bank managers, previous landlords and employers. Visit http://www.landlordsadvisory.com.au/tenantcheck.shtml for more information. Your tenant will need to fill out a detailed application form, and you need to make sure you have a written tenancy agreement.
8. Get an inventory or property condition report: to avoid disputes at the end of the tenancy, it is vital to have a detailed inventory or property condition report signed by both you and your tenants. This will include the condition of fixtures and fittings, the cleanliness and state of decoration and should preferably contain photos.
9. Take advice: learn from those who’ve gone before you. Joining a forum is a great way to get advice and support. Visit http://www.aussiepropertyforums.com/forums/showthread.php?t=322. You should also keep up-to-date with the latest property trends, news and legislature.
10. Protecting your property during vacant periods: periods of no rent are a landlord’s worst nightmare, but they are a fact of leasing life. If it happens, avoid theft by giving the impression the property is lived in. Collect the post regularly, alternate the position of the curtains and use a lighting timer.
Yes, becoming a landlord can seem like a minefield of potential problems, but if you conduct your new business well, stick to the rules and follow the advice above, you’ll find your new role a highly rewarding one. Good luck!
Joanne Lemke is a final year creative writing student at UOW, who is looking to break into the corporate copywriting space once she graduates and hopefully go on to eventually some day write a book around her other passions, namely cooking and travel.