Renting out your property? Here’s what you need to know.
Ever thought about renting out your property? There’s no time like the present! Australian rental prices are skyrocketing, which is great news for homeowners everywhere.
Nevertheless, there’s a lot to consider when renting out your property for the first time—especially if you’ve never been a landlord before. Our guide to renting out your property will let you in on everything you need to know, so you can enter the Australian rental market with confidence.
From home occupier to landlord—here’s the process.
1. Decide to rent out your property.
Easier said than done, right?
To help you decide if this is right for you, think about your motivations behind being a landlord. Like most people in the rental market, you’re most likely looking to make a profit off renting out your property.
You’ll also need to let go of any emotional attachment you have to the property. Whether you’ve worked with designers and builders to create your home or just lived in it for a little while—you’ll undoubtedly have some sort of attachment to the place. However, renting out your property is a financial decision alone. You’ll need to let go before deciding to rent out your property.
Once you’ve made this decision, you’re ready to move on with the rest of this article—it’s got the info you need to get started in the rental market.
2. Make sure your home is up to scratch.
Rental properties must meet some minimum standards before tenants can move in. Some areas to focus on include:
- Installing an energy-efficient heater that’s in working order.
- Ensuring windows can open and are lockable.
- Checking the property is free from mould. It’s often best to get a professional to do this.
- Installing a phone line and Internet connection, if you haven’t already. Most tenants will ask for connection to the NBN—so, if you haven’t upgraded now’s the time to do so.
- Allowing adequate ventilation through the property, with a focus on the kitchen, bathroom, and laundry.
- Updating the home’s security to deadlocks.
- Ensuring the bathrooms, toilets, kitchen, and laundry are adequate for tenants to live in.
- Weatherproofing your property and making sure it’s structurally sound.
- Checking that electrical switchboards are compliant with Standards Australia.
The minimum criteria for rental properties differ from state to state, but this list is quite comprehensive and should cover most of your bases.
By putting in the effort now, you’ll be saving yourself time in the future—it’s much less annoying to do installations and repairs before you have tenants living at your rental property.
3. Know what your responsibilities as a landlord will be.
Although landlord responsibilities vary between states and territories, here are some you can count on:
- Paying the annual rates and other council fees on the property.
- Allowing 24 hours’ notice before entering the property for any reason.
- Organising repairs to the property (do urgent repairs immediately—non-urgent repairs can be undertaken within 14 days of the tenant’s request).
- Issuing a notice to vacate the property if the rent becomes over 14 days overdue.
- Ensuring smoke detectors and gas appliances are maintained, and other safety measures are taken (such as fencing off pools).
When renting out your property, check the legislation relevant to your state or territory for more information about your responsibilities.
4. Understand the tax and legal side of things.
A lot changes when you move from home occupier into investor territory, and tax and legal obligations are no exception.
Renting out your property means you’ll have access to new tax benefits that you didn’t before—for example, you can claim damage or general wear and tear via property depreciation on your yearly return. Any good accountant will know how to claim the most out of your investment property when it comes to tax time, so consider engaging professional accounting services if you haven’t already done so.
You’ll also need to keep your property up-to-date with relevant legislation and requirements. You can get started here by checking out your state or territory’s applicable Tenancy Act. They’ll get your paperwork and contracts in order and give you personalised advice for your property.
Here’s how to rent out your property privately.
Leasing your property through an agent isn’t for everyone. In fact, many landlords are making the switch to privately renting out their properties. According to the Real Estate Institute of Australia, 22.7% of occupied rental properties in Australia are self-managed by the property’s landlord!
If you’re thinking of joining these ranks and taking the DIY approach, there’s a few things you’ll need to keep in mind:
- Know your property’s worth. The last thing you want to do is rip someone off—that includes both your tenants and you! You can check out our guide on setting your own selling price here, with tips that are easily transferrable to the rental market. Alternatively, consider getting a professional rental appraisal for peace of mind.
- List your property. Online listings work best, as over 90% of today’s prospective tenants start their search on the Internet. You’ll want to take some flattering photos of the property and sell it with your property description, too. Don’t be modest!
- Screen potential tenants. Once you’ve had some prospective tenants apply, it’s time to choose one. Your decision can be made easier by checking their names against tenancy databases, such as the National Tenancy Database and TICA.
- Draw up a tenancy agreement. Information in the tenancy agreement includes the weekly rent price, the amount of bond to be held, the tenancy’s length, pet allowances, and landlord entry rights.
- Complete a condition report upon handover. This is a great way to avoid uncomfortable conversations about damage to the property at the end of the lease. Create a checklist to list damage in each room and take plenty of photos. Get your new tenant to sign, and you’re all set to hand over the keys.
How much can you actually save by renting out your property privately?
At the end of the day, what every homeowner really wants to know is: how much can you actually save by renting out your property privately?
Some landlords opt to hire real estate agents to handle the finicky tasks of having a rental property. But what if you want more control when leasing your property? As the 22.7% of self-managing landlords in Australia have discovered, skipping the agent and renting out your property yourself leaves you in total control.
Plus, an agent’s rental property management fees can land anywhere between 5% to 12% of your property’s revenue. Over a 12-month lease, these fees can really start to stack up!
So, if you’re considering becoming a self-managing landlord to make the most out of your rental property, you could save a minimum $1500 per property per year, just by renting privately!
Your landlord starter checklist is here.
We know there’s a lot to think about when deciding to rent out your property. At PropertyNow, we’ve got you covered:
- Tenancy Application Form
- Online inspection bookings
- Printable brochures
Listings on the most renowned property sites in Australia
- Many more
Plus, check out our add-ons to take your property listing to the next level:
- $10 – Rental value and market report
- $300 – Professional photography and retouching service
- $120 – Professional copywriting service
- $100 – 2D Full-Colour Floor Plan
- $80 – TICA, National Tenancy Database, court judgment, and bankruptcy checks
- And plenty more!
If you’ve decided to rent out your property privately, you don’t have to go it alone. At PropertyNow, we’ve got all the resources you need to support your journey to becoming a landlord. With an upfront cost of just $195 until leased, there’s no nasty financial shocks when listing with us!
With some research under your belt and a step-by-step approach, you could be a sell your own home success story, too.
If you have any questions, please don’t hesitate to reach out—we’d love to help.