Deciding whether or not to rent out your property can be daunting. Whether it’s an investment property or a property you have lived in and vacated, you’ll want to ensure that you protect yourself and your property whilst getting the best possible return. Here’s a guide on how to rent out your property with a rental manager.
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Property management versus private renting
To rent my property out with the assistance of a property manager or do it all by myself is the question.
The cons of private renting
The major downside to going private is the fact you have to do everything yourself, and you’re a one-person property management team. That means you determine the rental price, advertise the property, have to stay up-to-date with legislative changes, handle all the paperwork and organise inspections. It’s basically a full-time job, and the monetary return is often not worth the added stress.
The pros of property management
Alternatively, a property manager handles all this and more.
A property manager’s role
A property manager’s role is not just to collect the property rent every week. They provide a comprehensive management service, which means they:
- Provide advice on rental value.
- Advertise for tenants.
- Screen tenants and lease your home.
- Provide a tenancy agreement.
- Collect and submit the bond.
- Collect the rent money every week or month.
- Compare and check property inventory.
- Inspect the property.
- Pay utility accounts.
- Provide regular financial statements.
- Attend court on your behalf in the case of dispute with tenants.
- Finalise the bond and inventory with the tenant at the end of their tenancy.
This, of course, comes at a fee – sometimes up to 10% of the weekly rental figure as well as a letting fee for finding a tenant for your property.
A survey of investors by Woolcott Research found that two out of five self-managing landlords experienced tenants defaulting on rent. It also found that landlords who used property managers to manage their relationships with tenants were likely to face fewer problems.
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A step-by-step guide to rent my property out
So, you’re interested in letting a property management office look after your rental property? Follow this step-by-step guide to success.
Appoint property management
As a property owner, when you do decide to hire a property manager, the selection process is similar to an interview. Key characteristics to look out for include excellent communication and organisation skills, a focus on continuous improvement and education, an in-depth knowledge of the local market and excellent references from other property owners.
Make sure you ask the right questions so you can effectively compare different services offered by competing agencies.
Prepare your rental property
Before you advertise your rental property, you’ll want to ensure it’s at its best to attract high-quality tenants. This might mean minor renovations, refreshing the bathroom and kitchen, adding fresh paint on the walls, fitting new window fixtures and appliances, or simply updating any broken fixtures.
Each state and territory has different legislation, but ultimately be aware that your property’s structure must also be maintained, and all gas, heating, electricity and landlord-owned appliances must be compliant.
Secure landlord insurance
To rent out your property involves big financial risk. If you’ve previously called the property “home”, you may also have an emotional attachment.
No doubt, you’ve heard horror stories about nightmare tenants. Of course, most tenants don’t fall into that category, but it pays to protect yourself and your property in the event that something goes wrong. If this is the first time you’ll rent it out, you may not know about landlord insurance. It’s designed to cover the aspects of property rental that building and contents insurance doesn’t protect.
The common features covered in landlord insurance are:
- Malicious or intentional damage to the property by tenants or their guests.
- Tenant theft.
- Loss of property rent if the tenant defaults on their payment.
- Liability, including claims against you by the tenants.
- Legal expenses incurred in taking action against a tenant.
It’s important to remember that not all landlord insurance policies are the same. Your property manager will have one that they recommend, or you can do your own research to find the right policy for you.
Speak to your accountant about rental property tax issues
Renting out a property has tax implications. Contact your accountant to advise them of your intentions and discuss the possibility of organising a depreciation schedule if necessary.
Work with property management to decide on the property rent
You might have an idea of how much property rent you would like to receive per week, based on your ownership costs. But unfortunately, the local market ultimately determines the rent. Your property management team will be best suited to advise you on this and will offer to do a rental appraisal. They’ll review your property’s location, comparable data, the number of bedrooms and bathrooms, the property size and nearby amenities to decide the property rent.
However, don’t just take their word for it. You can do your own research on the most popular listings on realestate.com.au and domain.com.au. Search in a very specialised area and compare the rent with similar properties.
During your interview process with potential property managers, they should also be able to provide you with a list of their most recent successful rental properties that are comparable to your property.
Let the real estate offices focus on the marketing plan
One of the most important ways property managers can help rent out properties is by expertly marketing them to prospective renters. Only real estate agents are permitted to list rental properties on the most popular sites, like realestate.com.au and domain.com.au.
To ensure the best results, compare your property’s listings with similar properties in the same area and review the following key factors:
- Has your agent included several professional photos in the listings?
- Did they have the property cleaned, and the garden mowed before taking the photographs?
- Is the advertising copy they created (the property’s written description) compelling?
- Did they highlight the property’s biggest benefits, features (like multiple bedrooms and bathrooms) and neighbouring amenities in the listings?
- Are they advertising the property on key websites like realestate.com.au, domain.com.au and rent.com.au? Social media also offers a new dynamic approach to advertising, as we all know how much time people spend scrolling these days.
- Did they email the listing along with other property alerts to their database?
- Are they properly screening applicants against a national tenancy database and also checking credit, employment, references and criminal history?
You want the property management team to strive for an impactful marketing and advertising campaign with multiple listings for maximum exposure. This equals more applications and more choices when it comes time for you to pick your ideal applicants.
Sign the tenancy agreement
Once a property owner selects their tenants, the next step in the process is to sign the tenancy agreement. This is your property management team’s domain, so they’ll have the appropriate template. But as a property owner, it’s always good to review and ensure it includes:
- The name and address of the tenant and the property manager or owner.
- The start and end date of the lease and whether it’s a fixed agreement of 6 or 12 months or a periodic agreement.
- The amount of property rent and how and when tenants will pay it.
- Special terms like no pets or no smoking, which tenants agree on in advance.
Complete the entry condition report
Your property management team and tenant are both responsible for completing the condition report, which includes written and photographic details of the property’s condition.
Successfully rent my property out!
Now that you have completed these steps, you are ready to rent your property out, safe in the knowledge that you have made an informed choice in selecting your property management. Keep in regular contact with your property management team to ensure your property is always being looked after and that they’re fulfilling their list of services.
Find the ideal property manager for you with LocalAgentFinder
In summary, now that you know a little more about what’s required to rent your property out, why not start viewing fee details and services for property managers in your local area?
Start here to compare property managers with Local Agent Finder. It doesn’t matter whether you’re on the Gold Coast, Perth, the Sunshine Coast or Hobart. We’re a fully mobile service that can connect you with property management teams across Australia.