Property is a top investment choice for many Western Australians, and so it makes sense that more of us are becoming landlords.
Being a good landlord takes a little more effort than just sitting back and collecting the rent, and taking on the title comes with certain responsibilities.
Here’s our list of what you need to know about being a landlord:
1. Employ a property manager
It’s possible to go it alone as a landlord and manage your properties yourself. But employing an expert property manager (usually a licensed real estate agent) as a middle man can save you a lot of headaches in the long run.
While it will cost a percentage of your rent, a specialist property manager can actually maximise your rental returns, simplify your responsibilities, organise all the paperwork, maintenance and inspections, find tenants and liaise with them and use their experience to minimise any potential problems.
Ensure the property manager you choose has a good reputation with other landlords and tenants, and is up to date on their own responsibilities.
2. Be aware of your legal responsibilities
All landlords should ensure they are familiar with their rights and responsibilities under Australian law. The landlord-tenant relationship is governed by the Residential Tenancy Act of each state and territory in Australia.
A good property manager should recieve regular training through their company, and should be fully updated on all the latest legislation changes. When interviewing a property manager, ask how they keep abreast of the latest legislation.
3. Document and communicate
Whether or not you decide to use a property manager, it’s best to ensure all tenant agreements are documented in writing as a lease agreement so all parties are on the same page.
And good, efficient communication is key to a successful tenancy. If you have expectations about how the property should be kept, communicate them to your tenants or your property manager in advance.
The best property managers do everything in writing, either by email or snail mail, even if their first communication is in person.
4. Administer the bond correctly
It’s advisable to collect a bond up front against any future damage or loss of rent from prospective tenants.
But a landlord cannot hold this bond themselves – it must be lodged with the appropriate state or territory residential tenancies bond authority who will hold the bond during throughout tenancy.
A bond can be held against any damage to the property, but cannot be held against “fair wear and tear”.
5. Look after your tenants
Attracting good tenants who treat your property as if it was their own is every landlord’s dream. There are two key things you can do:
a) Make sure your property is well presented and desirable
b) Don’t skip on reference checks when assessing prospective tenants.
Get to know the local legislation around when rental inspections are permitted and the proper process to go through.
And, once you have good tenants, do your best to keep them by ensuring the property is well maintained, being reasonable about any rent increases and making sure any queries are addressed promptly. A good property manager will be able to pick the best tenants, and will give you great advice about how to hang on to good ones!
6. Consider landlord insurance
While a bond may cover small amounts of damage or loss of rent, landlord insurance covers other risks that can be associated with renting out a property and that don’t fall under a normal home and contents or strata title insurance policy.
Not all landlord insurance policies are the same so work out which one might suit your particular situation best.
7. Maximise your earnings
Rental properties are an investment so most landlords want to maximise their rental earnings.
You should keep an eye on market rents, choose a desirable area in which to invest and make sure your property is well maintained. But you should also seek expert advice about what you might be able to claim through the ATO – for instance, you may be able to claim back expenses like council rates, water bills or capital improvements against tax.