There’s a lot to think about when it comes to renting out your property. Some homeowners decide to manage their own properties, and others use the services of a property manager to look after their investment properties. We’re going to talk you through the following points to help you understand how property management works in Australia.
- The pros and cons of managing your own property
- Property management fees and charges
- Selling versus renting your property
- Finding tenants for your property
- Advertising units for rent
- What to look for in a renter
- Tenancy rights across Australia
Should I manage my own property? The pros and cons.
If you’re wondering whether to manage your property yourself or hire a property manager to look after your investment property, we’ve broken down some of the pros and cons of managing your own property.
|It can be financially rewarding as you’re saving on fees||You’ll be dealing with the administration that comes with renting which can be time consuming|
|You can keep an eye on the property’s condition||You may need to respond to maintenance issues|
|It’s easier for you and your tenants to build trust with each other||You may need to deal with legal issues or missed rent payments|
How much do real estate agents charge to manage a rental property?
You’ll generally pay a commission fee of somewhere between 5-15% of your weekly rental income. The figure will depend on which services it includes. A fee closer to 5% could mean the property manager is only charging management fees. Whereas a fee closer to 15% is more likely going to be an ‘all-inclusive’ fee which includes additional fees. Below, we’ll give you a breakdown of the types of fees you can expect to pay when working with a property manager to rent out your property. A property manager can charge you the following fees:
- The management fee – charged for regular activities such as rent collection and handling maintenance requests.
- The letting fee – charged for services involving securing new tenants for a rental property.
- Marketing fees – charged for the advertising activity carried out to promote the rental property.
- Lease renewal fee – the fee charged to extend the contract at the end of a lease.
- Routine inspection fees – the service fee charged for an agent inspecting the property on a regular basis.
- Annual statement fee – the fee charged to obtain your annual summary statement.
- Civil and administrative tribunal fees – fees charged in the rare occurrence that you need to attend court.
How do I know whether to sell or rent my home?
Buying a new home and unsure on whether to sell or rent your existing property? It’s a good idea to consider your long term financial goals. Selling is generally a smarter short-term ‘safe option’ and will lower your mortgage debt. However, the income you can earn from a rental property can be substantial over time, and you can end up with a much higher net worth. Read more.
How to choose a real estate agent to rent your home
You’ll want to find someone who’s organised, reliable and trustworthy to manage your property. You can use our online comparison tool to find a property manager who suits your unique needs by comparing agents, including their fees, commissions and marketing strategies. We’ll provide you with property managers to compare who match your requirements. You can also see feedback from fellow property investors like you including their skills and attributes to help you to help you make your decision. Here’s how to rent your house out with an agent using LocalAgentFinder – it’s simple!
- Click on the ‘compare property managers’ link below
- Enter a few details about your property
- Compare and connect with your chosen property management agent/s
Can you be a real estate agent and property manager?
The short answer is yes. We have agents on our platform that operate as both sales agents and property managers. However, many of our many best performing property managers work in agencies that are focused solely on property management. How do I rent out my property? Questions to ask a property manager before you rent out your house
How to get tenants for your property
A good property manager will have years of experience in screening applicants before renting out the property to a new tenant. Securing the right tenant is extremely important if you want to 1) collect your rental payments on time and 2) have your rental property well looked after. You’ll want to find a property manager who can help you avoid bad tenants. Typical steps property managers take to find/screen tenants include:
- Using a tenant database
- Performing a credit check
- Verifying employment
- Contacting previous landlords
Once your agent has found a suitable tenant, a good property manager will document the property condition so that if the property is damaged in any way throughout the lease period, you’ll be able to refer back to the condition report to prove whether or not the damage had already been done. How to avoid bad tenants
How to advertise units and why they differ from houses
If you’re renting out a unit, your advertising strategy may need to differ as your building may have common areas run by a body corporate. For example gyms, swimming pools and BBQ areas. These features will attract many prospective tenants. A good real estate agent will include them in your property listing (e.g. photos and description). It’s a good idea to communicate the by-laws of the body corporate in your property listing as the tenant must obey them the same as every other resident or visitor. One good example of a by-law is the ban of pets in units. Even if you as a landlord would allow pets, you will still need to seek, and be granted permission from the body corporate. Here are some common questions to ask a property manager before renting a unit or house.
What to look for in a renter
A good renter can mean different things to different people. If you’re looking for someone to lease your property for a long period of time, it’s a good idea to look for a young family or people with secure full times jobs, rather than students perhaps. If you’re looking for tenants to fill your property for a shorter amount of time, you might be better off looking for students or casual workers who are likely to move around more. A good property manager will dismiss any tenant with a bad reference, and thoroughly check any applications that don’t seem to add up. It’s important to find a property manager who you believe will maintain a good relationship with your tenants so you can expect to keep them in your property for the full lease agreement period.
Tenancy rights across Australia
Each Australian state government has a different set of laws around tenants rights under a Residential Tenancies Act. If you’re going to rent out your property, it may be a good idea to review your state’s tenancy laws so you’re aware of them if you have any troubles with tenants down the track. Rental rights differ depending on which state your rental property located in. For example, in terms of rental increases on a fixed-term rental agreement, there are different rules on how often you can increase the rent amount.
|QLD, VIC, WA & NT||Every six months|
|ACT, TAS & SA||Every 12 months|
Understanding property management – what’s next?
If you’d like to find a property manager to rent out your property, you can compare their fees, marketing strategies, agency information, reviews and more using our online agent comparison tool.