Selecting a tenant carries an element of risk as a wrong choice can cost thousands of dollars in unpaid rent, damage to your property or both.
There are no guarantees, but it’s possible to enjoy a relatively stress-free experience of renting property and building your personal wealth.
Investing in a top-quality property manager will safeguard your rental from poor tenants and abuse. They will also ensure your property is well maintained and help you to attract a higher rent.
Here are a few pointers to ensure your experience as a landlord is as stress-free as possible.
- Use a property manager
Do your research about the best performing property managers in the area. Don’t just select the agency you bought the property from. Interview at least three candidates and check their references.
- Well-connected
Make sure your property manager commits to regular inspections and has a network of tradies who will fix problems quickly and at a fair price.
- Legal eagle
Get up to speed on state laws regarding tenants’ rights, management of bond money and dispute resolution mechanisms. Knowing your rights and those of your tenant will help you make better judgments. Your property manager will be able to provide you with this legislation.
- Sweat the details
Review prospective lease terms with the property manager to ensure you have included all the rules you believe necessary. These will probably include no sub-letting, no pets and no smoking as defaults. Overly restrictive leases can scare away some potentially good renters so don’t overdo it..
- Setting rent
Your property manager is best positioned to set the rental price and should base this on current market rents. They’ll be motivated to go for the maximum level the market will tolerate because their monthly commission is based on it.
- Tenant search
Rely on your property manager to undertake the marketing of your property to attract desirable applicants. Before spending any money, ask if they have candidates already on their database.
- Selection process
Be sure you’re happy with the screening process. Sources, such as Equifax and the Tenant Verification Service, can be used to check an applicants’ employment, credit history and any property-related legal judgments set against them.
- Your choice
By all means, allow the property manager to select a tenant, but ultimately the buck stops with you.
- Tax management
Have your property manager pay all the bills if this service is offered. . Ensure your manager provides an Income and Expenditure report at tax time. This streamlines paperwork and simplifies what you must do to claim tax-deductible items.
- Reserve cash
Don’t assume your rent will pay for everything. You’ll need funds for maintenance and may need additional fees for strata, council and rates. Expect to put aside two to four weeks rent to cover it.
- Re-lease plan
Some tenants move no matter how hard you try to keep them. So, work out a re-leasing plan with your property manager to minimise the time your property is empty.
- This article is provided for general information only and does not take into account the specific needs, objectives or circumstances of the reader. Before acting on any information, you should consider whether it is appropriate for your personal circumstances, carry out your own research and seek professional advice.