Not many people manage their own properties because it can be a tough job, but it is possible if you have the right information. A professional Property Manager acts as a mediator between landlords and tenants on a daily basis so their knowledge of how to navigate all problems that arise while managing a property is vast.
Here are a few insider tips that will help you be successful in self-managing your rental.
Perhaps the most important thing you need to do as a landlord-manager is to familiarise yourself with all the relevant legislation surrounding residential property. There are many rules and regulations that you must abide by when finding and dealing with a tenant. Failing to follow these rules can result in some hefty fines, so you’ll want to be sure you know what your legal requirements are.
Legislation differs by state, so make sure you’re finding the regulations that are relevant to you. A great thing to do is to complete a short course on property management where you will learn all you need to know to abide by property law.
You will also need to acquire all the standard agreements and documents that are needed to properly lease a property such as a Lease Agreement and Bond Lodgement form. These are integral to cover yourself if you ever need to go to a tribunal to resolve a dispute between the tenant and yourself. There are certain processes which must be followed when leasing and inspecting properties, evicting tenants and adjusting rent. You should be aware of all these things to cover yourself.
Leasing your property
There are many aspects that going into finding a good tenant and leasing a property, and this is the most important part of the process.
You’ll need some good quality photos to advertise your property with online. The best option is to hire a professional photographer who has done property shoots before. Good photos will maximise the number of applicants you get and allow you to pick the best tenant. You’ll also want to write an attractive description of your property and mention all its unique features, and the local amenities. Look at a few other rental properties on offer to get an idea of the style of writing you should aim for.
Finally, create a listing on www.realestate.com.au and consider paying a little extra to feature your property at the top of the page.
Prospective tenants will often send enquiries through realestate.com.au about the property, inspection times etc. You should make sure you are available to answer these enquiries at least once a day so the tenant receives the professional treatment they expect.
Once you have a few applicants, you’ll need to assess which tenants are in the best position to service the rent payments and which ones have a good rental history. A good tenant will look after the property well and make regular rent payments. Finding the right person initially is really important because it can be difficult to evict a tenant.
Ask applicants lot of questions, first on the phone and then in person. Ask about their rental history, why they left their last rental, if they have any pets, what they do for work, how much they earn and if they can provide references.
Verify this information via previous landlords and their boss from work. Be careful which references you call as many applicants put their friends and family as references. The best people to call is the property manager or landlord of one of their previous rentals.
Once you are confident you have found the right tenant, approve them quickly and send them the leasing agreement. Make sure they pay the bond and at least one month’s rent before you hand over the keys.
If you’ve chosen a good tenant, collecting rent should be relatively straight forward. Inevitably, you’ll run into problems of late payment or partial payments.
Firstly, make sure your tenant is paying via direct debit so you can track when they make a payment. Good practice is to remind them three days after their payment due date. If they still don’t pay, remind them after 7 days and notify them if they don’t pay, they will be breeching your lease agreement and that you will be entitled to evict them. Reminding tenants of this fact is usually enough to prompt them to pay.
Inspections are important to see if your tenant is adequately looking after your property, and to see if any maintenance needs to be done. Generally, you should inspect the property 3 months after the tenant first moves in, and then every 6 months after that. Be aware there are restrictions to how often you can inspect a property, and there are certain procedures you must adhere to. You must give the tenant at least 24 hours-notice and serve them an official Notice of Entry document otherwise they may complain to the authorities and you could be facing a hefty fine.
Understating maintenance and repairs are very important when running a property. You must be aware of what constitutes an urgent repair, and that you are obliged to fix the problem immediately. For example, a broken hot water unit is considered urgent and if you do not repair it immediately, the tenant can go fix it themselves with your money! (up to $1800.)
For more general repairs, keeping on top of them will ensure your tenant is happy and more likely to be a better tenant.
One advantage professional property managers have here is the systems they use to request, track and follow up on maintenance issues. The software they use makes dealing with complicated repair issues a breeze.
Being a diligent landlord also means keeping on top of things happening in the area, and more specifically, the market rental price. Charging the right rent is a special skill that takes time to develop. Charge too much, and no one will apply for your property. Charge too little and you’ll be missing out on income.
You should review the rent you charge every 12 months. If other rentals in the area have increased your rent, you can justify a rent increase as well.
This is where an experienced property manager can get you thousands of dollars of more rent a year by finding the correct rent price.
Tax and record keeping
Keeping track of all communications with the tenant, all bills payed and any tax information is important to ensure you are meeting the legislative requirements, and so that you can reap all the tax benefits that come from owning an investment property.
Keeping records will also protect you if you ever have to take a dispute to a tribunal.
Not engaging a property might save you a bit of money each month, but you might be shooting yourself in the foot. A good property manager is well worth the fee because they amount of money they will generate and save you through their experience will far out-weigh their fee. You also won’t have to worry about all the little things that come with managing a property and will have the peace of mind that comes with hiring a professional who manages property on a daily basis. Don’t forget that property management fees are tax deductible!