If you are about to become a landlord, it is an exciting time in your life, renting out a property is a smart business idea and with that in mind, here are a few tips from a seasoned rental property owner.
- Take out some landlord insurance – Landlord insurance protects the revenue that your property earns, while it also gives you public liability cover, accidental and malicious damage, as well as damage caused by pets. You are also protected against theft, which is very important and if a tenant or third party were to suffer injury, you are covered up to $20 million.
- Hire a property manager – Most investment property owners connect with an established property management company, an organisation that handles many aspects of the rental, including sourcing and screening tenants, building maintenance and even security. They will draft tenancy agreements and advise you regarding any legal issues; their lawyer will also represent you in court if it comes to it.
- Inspect the property before tenants arrive – The property must be closely inspected; fire exits, extinguishers, smoke alarms and electrical system checks. Every Australian state has its own requirements, so you should check online to find out about your location. It is crucial that you are compliant with all government directives.
- Register the business – If you plan on renting out a property you own, you need to register as a business with the Australian government, which can be completed online. Once you have your ABN, you are able to trade. We recommend writing a business plan at this stage so that you will have a guideline that covers every aspect of the operation. There is a lot involved with setting up any business and writing a plan ensures that you are aware of all aspects. When the plan is complete, ask a business guru to take a look and they will probably find some issues.
- Connect with a lawyer – The law regarding rentals is very complex and we advise you to connect with an experienced lawyer, one with experience in this field. There can be legal issues with tenants who, for one reason or another, are dissatisfied, as they can appeal to a tribunal. Tenants have rights and most are very aware of this.
- Connect with a local builder – Buildings require regular maintenance; things can go wrong at any time and if you have a builder in your team, repairs can be carried out asap. The builder can inspect the property at the end of each tenancy and carry out essential repairs.
Renting properties can provide you with a regular income and with a good property management company in your corner, you should be able to stay on top of things. If you have one property and things are going well, there is nothing to stop you expanding and sourcing a second property.
