COMPLETE RENT MY PROPERTY GUIDE
Step by step guide on how to rent out your property investment
Are you looking to rent out your property, and are grappling with questions like ‘how do I rent my property? Or ‘what is the process to rent out my house?’. Then this guide is for you.
Outlined below is a look at each step of the process to show you how to rent out your house or apartment and an explanation of some of the key terms you as a landlord need to be aware of.
1. PREPARING TO RENT OUT YOUR PROPERTY
Spending some time and money, without over capitalising, to ensure you attract high quality tenants is a good idea.
Why? Because good tenants will most likely look after your property and pay your rent on time and for you as an investor or landlord that is gold!
Here is a look at what you as a landlord legally need to comply with plus ways you can add market appeal.
Legal obligations of a landlord renting out your property
As the landlord / property owner, you are obliged to ensure the property you are renting out is safe, secure and reasonably clean and fit to live in. Therefore, before you rent your house, or even a room in your house, you need to ensure the:
- Structure and exterior of the house is maintained
- Gas, electricity, heating and other installations are in working order
- Any landlord owned appliances are installed correctly and comply with maintenance and safety regulations
- You address any health issues with the property such as mould and rising damp
- You comply with anything else outlined in the tenancy agreement
Keep in mind, each State and Territory has their own legal requirements for landlords so make sure you investigate what these are.
Improvements to maximise renter appeal
Look at your property through renters’ eyes, is there an opportunity to refresh the property or add some extra features to make it more appealing? Some modifications may include:
- Fresh painted walls which can rejuvenate the overall appearance
- Adding popular features such as a dishwasher, washing machine or air conditioner
- Adding good quality blind, curtains or shutters
- Putting in built in storage
- Ensuring the property has good internet connection
- Creating an outdoor living space - adding a BBQ and outdoor seating is often popular with tenants
Improvements to maximise your renter appeal
- Tidying up the garden
- Fixing the flooring - clean the carpets or replace them if very tired, and consider sanding and resealing floorboards if they need a bit of love
- Simple updates to the kitchen such as a new splashback or new benchtop, replacement of leaky or rusty taps, new cupboard door handles
- Refreshing the bathroom - does it need new grout, or perhaps new tiles, consider adding new fixtures or a vanity, perhaps a large mirror if the space is tight
- Can you add a car space as this can be popular in built up areas and may enable you to charge a higher rent
Importantly make sure you talk to your local property manager before making any changes to your property.
Having insight into what your local tenants are looking for and are prepared to pay more for, can help you make smart decisions about what changes to make without over capitalising.
2. HOW DO I KNOW WHAT RENT TO CHARGE WHEN I RENT MY HOUSE OR APARTMENT?
As an investor or someone looking to rent out their property a key priority for you is to maximise your returns, and one of the key ways to do this is to ensure you are charging the right rent. But how do you know what to charge?
First step is to do your own research by looking for similar rental properties in your local area on sites such as rent.com.au, realestate.com.au or domain.com.au, mcgrath.com.au This will help give you a good starting point as to what similar properties are renting for.
However, every property is different; they have a different aspect, different internal features, condition and interiors etc.
To find out what your particular property is worth and how much rent you could charge, you will need to get a rental appraisal with your local property manager. They undoubtedly oversee several similar properties in and around your suburb and are therefore a local specialist with a wealth of insights for you.
What do you receive when you have a McGrath rental appraisal?
Your McGrath Property Manager will review your house or apartment and assess its key features and rental appeal. They will review your property’s:
- Recent data of comparable rental properties
- Number of bedrooms and bathrooms
- Property size
- Convenience and amenities
Following this they will provide you with a rental price guide and a recommended marketing campaign to help you attract the best quality tenants.
While they are at your property make sure to ask them what local tenants are looking for. What would they be prepared to pay more for? And how do they think you can add value and appeal to your investment?
3. MARKETING AND ADVERTISING YOUR PROPERTY - CREATING A HIGH IMPACT RENTAL LISTING
Property managers are skilled at creating high impact marketing and advertising campaigns for rental listings. By maximising your property’s exposure you’ll reach more potential renters and most likely receive more rental applications. This means you have more choice when choosing the right tenant for your property.
A strong advertising campaign should include:
- Professional photographs taken of your home - Most listings will be seen online first so ensuring you use high quality photos will help attract renters as they are scrolling through the websites
- A compelling description of the property - Outline the key benefits of the property, its features, proximity to public transport, onsite or local amenities and highlight any popular location features
- Advertisements on rental websites such as realestate.com.au, domain.com.au or rent.com.au and on social media
- An email database promotion of your rental listing to your property manager’s database
- Signboard to provide maximum exposure
4. RECEIVING TENANT APPLICATIONS AND SCREENING TENANTS
Renters who are keen to rent your house or apartment will complete a rental property application and submit it for review. It is now up to your property manager to assess their suitability and advise you of the best tenants for your property.
Getting this step right is very critical. Troublesome tenants can cause big issues for property investors - they can put your rental income, your neighbourhood and your property at risk. Having a skilled property manager conducting background checks and screening applicants can help enormously during this process.
A good Property Manager will:
- Check the applicants credit history
- Validate the applicant’s proof of ID and income
- Conduct thorough reference checks
- Complete a national tenancy database review and
- Abide by anti-discrimination laws
Of course, you as the landlord have the final say as to who rents out your property, but this thorough screening process gives you peace of mind as to the quality of your shortlist.
Once a tenant has been selected and offered the property, they will be asked to sign the Tenancy Agreement.
5. WHAT IS A TENANCY AGREEMENT AND WHAT ARE THE DIFFERENT TYPES?
A residential tenancy agreement, also known as a lease, is a written agreement between you and your tenant. It is a legal contract that outlines the rental terms and conditions for both the landlord and the tenant.
Each state and territory has slightly different requirements for rental agreements so make sure you check in with your local rental authority to understand what is required from you.
Tenancy agreements must include:
- The name and address of the tenant and the property manager /owner
- The start and end date of the lease if it is a fixed agreement of 6-12 months, or a statement that the lease will be periodic (where the tenant lives in the property for an indefinite period)
- The amount of rent and how and when it should be paid
- Standards terms - such as what tenant and property manager / owner can and cannot do
- Special terms such as no pets, no smoking etc. These must be agreed in advance
6. WHAT ARE RENTAL BONDS?
A rental bond is money paid by the tenant to the landlord / property manager at the start of the lease and is held for the duration of the tenancy agreement. The rental bond, which is usually 4 weeks rent but check with your state or territory’s rental body, is a form of security for the landlord against damage to the property or non-payment of rent and is an incentive for the tenants to comply with the tenancy agreement.
There are tight restrictions around the management of rental bonds so when the bond is received by your property manager or yourself, it should be sent to your local Bond Authority and held for the duration of the tenancy. A receipt for the bond will be sent to directly to the tenant along with their rental bond number.
At the end of tenancy, if the tenant doesn’t owe the landlord any money and there is no damage to the property, the bond paid at the beginning of the tenancy should be refunded in full. If the landlord or property manager believes the tenant owes money, they can make a claim against the bond.
6. WHAT IS A CONDITION REPORT AND WHEN IS IT REQUIRED?
A condition report, as the name suggests, is a report documenting the general state of repair and condition of each room in the rental property when the tenants move in.
Before the tenancy starts you or property manager will need to document the condition of the property and describe all damage, no matter how small in careful detail. Taking photos of the property is a good idea here so you have a formal record of the condition of the property in case there are disputes down the track.
You need to give two copies of the report to the tenant for them to sign before, or at the time of moving in. They need to sign both and return one to you or your property manager to be kept on file.
At the final inspection either yourself or your property manager will use this report to assess the condition of the property and whether any damage, over and above normal wear and tear, has occurred. Any items that need to be repaired or replaced by the tenant are identified during the final inspection and arrangements are made with regards to payment or whether it will come out of the bond.
What does landlord insurance cover?
Landlord insurance is optional, but as it protects you against possible financial loss related to owning an investment property and as insurance policy premiums are tax deductible, they are very popular with investors.
Landlord insurance is designed to protect landlords from the risks that come with renting it out. It generally covers events that cause a loss of rental income, theft or damage to your property.
Building insurance - covers the financial cost of repairing damage to the physical structure of the property in the event of damage or theft. Keep in mind if your investment property is in a strata block it may already be covered, so check with your body corporate about what is covered under their policy and what areas you are responsible for.
Tenancy cover - to protect the landlord against loss of rental income due to rental default, damage or theft by tenants or their guests, legal expenses to evict a tenant and liability
If you’re looking to take out landlord insurance, it’s a good idea to talk to a few insurance providers to find the one that suits you and your property best.
9. DO I NEED A PROPERTY MANAGER OR CAN I RENT MY PROPERTY PRIVATELY?
No, you don’t need a property manager to manage your property, but many investors aren’t aware of the pivotal role they can play in the success of their investment.
Even the easiest of tenants invariably have demands and attending to these requests, queries, and maintenance can be frustrating and time consuming. Plus knowing what rent you should charge or what local renters are willing to pay more for is harder if you’re not living and breathing the local rental market like property managers are.
An experienced property manager can help save landlords a significant amount of time and money and make owning a rental property more rewarding.
To help you understand the value a property manager brings to your investment let’s look at their key roles.
What does a property manager do?
A property manager is responsible for:
- Dealing with the numerous day-to-day tenant demands
- Advertising your property for rent
- Hosting open homes
- Finding and screening tenants
- Managing the on-going reporting process
- Managing the lease sign-up process
- Managing budgets and financial records
- Managing regular inspections to ensure your property is being looked after it
- Managing the rent, including setting, adjusting and collecting
- Handling emergencies, complaints, evictions and other issues
- Knowing specific local landlord-tenant laws and looking after the tenant
10. HOW TO FIND A HIGH PERFORMING PROPERTY MANAGER - QUALITIES TO LOOK FOR
Today, property managers are highly skilled individuals who play an integral role in the success of an investment. But how do you find one? Here are 8 key qualities we have seen in high performing property managers that we hope helps you find the right one for you and your property:
- They have excellent communication skills
- They are highly efficient and organised
- Are trained and educated with a focus on continual education
- Can demonstrate in-depth knowledge about the local market
- Are part of a highly experienced property management team
- Have an investor mindset with a focus on helping their landlords maximise their investment success
- Have strong references from both property owners and renters
- Have a strong ability to negotiate with tenants
11. I WANT TO RENT MY HOUSE - WHAT DO I NEED TO KNOW?
These landlords are often more interested in finding tenants that take care of their property, rather than being purely focused on maximising their rental return.
But before you open the doors to renters, there are a few things you need to consider:
Ensure your property is rent ready
Over and above your legal requirements, consider whether you to make any changes to your property to make it appealing to renters. Does the kitchen or bathroom need a refresh? Do the carpets need to be cleaned or the floorboards re-sanded? Walk through your property with renters’ eyes and make a list of items that need to be fixed and either fix them or organise a tradesperson to.
Understand the costs to set your house up for rent
Determine if you need insurance?If you are renting out your house, you may want to get specific landlord insurance in addition to your standard home insurance. As mentioned under Step 8, as a landlord you can choose from building and content insurance or both and can add on extras such as cover against theft, burglary, malicious damage, loss of rent due to tenant defaulting on their payments and legal expenses to evict a tenant.
Understand the impact renting your house or a room in your house has on your tax
Ensure you comply with all your legal obligationsAs a landlord you are legally obliged to follow your relevant State or Territories Residential Tenancy Act. This outlines the laws around tenancy agreements, inspections, condition reports, rental bonds, rent collection, terminations and more. Hiring a skilled property manager can be a huge help here as they are fully trained on landlord requirements and stay across any changes to the act.
Understand the benefits of using a property manager
While some homeowners are tempted to manage their own property, or rent their property privately, having a local, dedicated property manager to look after your home is often a smarter decision as:
- They have a better idea of rental pricing and can help ensure you are maximising your rental return
- They understand the rental market, what tenants are looking for and its overall demand
- They will manage any issues, including maintenance issues and mobilise their maintenance teams to ensure any issues are addressed in a timely manner
- They will thoroughly screen all renters
- They will help ensure your rent is paid on time, ensuring your cash flow is maintained
- They will stay up to date with changing local legislation
- They will conduct regular inspections to ensure your property is being looked after
- They will negotiate any rent changes on your behalf
- If you are moving interstate or out of the area, having a local, on the ground property manager, can help ensure the rental is managed in a timely and efficient manner.
LOOKING TO INVEST IN PROPERTY BUT UNSURE OF THE PROCESS?
Investing in property is often seen as one of the best ways to create wealth in Australia. However, if you are a first-time investor, knowing where to start and what to consider, so you make smart decisions, can be overwhelming.
Let us guide you through each step of the process. From researching the property market, to understanding the costs of property investing, what neighbourhood features to look for when buying a property investment, how to add value to a property investment, attract and retain good tenants and loads more.
ARE YOU A SEASONED PROPERTY INVESTOR LOOKING FOR BETTER RESULTS?
Are you a seasoned property investor and looking to drive the greatest returns from your investment in order to achieve your longer term financial goals?
Then this guide is for you. Written in consultation with our most experienced property managers, we share proven insights into how to maximise your returns and drive greater results from your property investment.
A final word
There is a lot to think about when renting out your house or your property investment. We hope that this guide to renting your property has given you an insight into the steps you need to take.
Our team of specialist Property Managers would love to help you through these steps and to help ensure your property is set up for success.
I'M READY TO TAKE THE FIRST STEP TO RENT MY PROPERTY INVESTMENT
Do you own an apartment investment property or an investment house? Get a rental appraisal from your local Property Manager and receive a detailed report of your property, a summary of the current market conditions, a rental pricing guide and practical information on how to unlock greater returns from your property investment.
Simply fill out the form below and one of our Property Managers will be in touch.