5 steps to getting your property rented in 2019
Are you ready to start making money from your investment property? Not knowing where to start when it comes to getting your property rented out is a common theme amongst first time landlords. It can be a daunting process preparing your home, satisfying regulations and legislation, finding the right property manager, picking a price point and finding the right tenants but it doesn’t have to be. Investing in property is already complicated enough, by following these steps you will be able to ensure a smooth transition into becoming a landlord and making 2019 a profitable year for your investment portfolio and financial health.
- Prepare your property for tenants
If you are preparing your own home for other people to rent, it is not as simple as just moving your things out and putting a for rent sign out the front. Owners can be happy to live with small things requiring fixing; knowing they could do it at any time. Most likely these are things a renter wouldn’t and shouldn’t have to deal with. As a general rule, if it’s broken, fix it. There are also a number of strategic alterations that could be made to ensure your home is more appealing to local renters or even get your more rent. It can be easy to get carried away with maintenance and making large scale renovations simply for the sake of it, but is important to avoid expensive renovations if they are not going to have a large effect on your rental income.
- Understand your responsibilities
Understanding your rights and responsibilities as a landlord is an essential step to ensuring you avoid costly and potentially legally damaging situations. Under common law, landlords are required to guarantee the safety of the rental property, ensuring that tenants, neighbours or the general public are not at any risk of injury caused by your property. Each state and territory has specific regulations, so check your state government website to ensure your property is complying with the law. Consumer Affairs also provides a great breakdown of the responsibilities of tenants, landlords and agents and is a great starting place for first time landlords.
- Speak with a financial adviser
Your local financial adviser will help design and implement the right property management strategy for your personal circumstances. Some of the most beneficial aspects of property investment come in the form of financial concessions and benefits. A financial adviser will be able to discuss with you the tax minimisation possibilities with claimable expenses and other deductions available for your personal circumstances. Under Australian income tax law if you borrow to buy a rental property, the interest and rental expenditure, such as repairs and maintenance, may be tax-deductible. If your costs, including interest costs, exceed your rental income, the net loss can be offset against other income you receive, which means you may be able to reduce the amount of tax payable on your income.
- Make sure you have quality landlord insurance
Renting out your property involves a large financial risk. If you’ve previously called your now investment property your home, it is likely you also have an emotional attachment to it. While a suitable security deposit can be used to cover small amounts of damage to your property or loss of rent, landlord insurance will give you the peace of mind of knowing that other major risks associated with renting out a property will be looked after. It is also necessary to double check your home and contents insurance policy inclusions because if you’re changing the property from your primary residence to an investment property, different sections of your home and contents insurance policy may become invalid.
Some common features covered in landlord insurance include:
- Malicious or intentional damage to the property by their tenant or their guests
- Legal expenses incurred in taking action against a tenant
- Loss of rent if the tenant defaults on their payment
- Theft by the tenant or their guests
- Liability, including claims against you by the tenant
It’s important to remember that not all landlord insurance policies are created equal. Your property manager will have one that they recommend but it is suggested you do your own research to find the right policy for you and discuss it with your local financial adviser.
- Hire a Property Manager
While there are many advantages for going out on your own and managing your own property, you may find that you simply do not have the time or resources to run your property day to day. A good property manager will alleviate the stress of the paperwork, maintenance and inspections and find and liaise with your tenants on your behalf. While they aren’t free, you may find that a specialist property manager actually maximises your rental returns in the long run. One of the most important ways your property manager can help you to rent your property is by marketing it effectively to prospective renters. Only real estate agents are permitted to list rental properties on the most popular online real estate portals – realestate.com.au and domain.com.au.
Whether you are thinking of taking the plunge into property investing or have recently added property to your investment portfolio, there are many factors you must consider to ensure a smooth ride as a landlord. Now that you have completed these steps, you are ready to get your property rented in 2019, safe in the knowledge that you have made an informed choice selecting your property manager.
