Thinking of renting out your property? There’s a lot to consider before becoming a landlord and sticking a “For Lease” sign up in the front yard. Whether if it’s figuring out how much rent to charge or how to apply for home insurance, the responsibilities can be overwhelming for first-time homeowners. So we’ve reached out to the experts to get their best tips for renting out your property, everything from finding great long-term tenants to getting the best value in the market.
Preparing the Property
Preparing your property is the key to attracting plenty of interest from potential tenants and maximising rental returns.
Repair Any Damage
When renting out a house, a landlord must ensure that it’s in reasonable condition before tenants move in. For most properties, this means addressing minor concerns such as worn carpets, holes in walls, and that doors and windows are properly secured. However, in cases where health and safety are an issue, the repercussions can be more severe. Mould for example, should be addressed immediately as spores can lead to illness for occupying tenants.
Renovate the Property
If you’re renting out an investment property, consider renovating to get the best value in the market. Larger projects such as kitchens or bathrooms can provide an increase in rental returns, but many renovations can be done on your own and provide similar results. Giving rooms a new lick of paint, replacing light fixtures, or adding plants to an unattended garden are low-cost ways to renovate on a budget.
Decide on Whether to Furnish
One major decision that can have an impact on rental rates is if your property is furnished. An apartment that includes furniture can be rented out at a higher cost, but will likely attract short-term tenants such as international students or expats with working visas. If you’re planning to move into the property in the future, keeping it furnished can be a good interim solution before settling in.
Benefits of a Furnished Property
Tax deductions for the furniture purchased.
Cheaper than furnishing the property.
Ideal for tenants seeking a shorter lease.
Benefits of an Unfurnished Property
Preferred by long term tenants with lower turnover.
Provides additional returns above the standard rent.
Not responsible for repair and maintenance to furniture.
Listing the Property
Stage the Property
Staging a property helps potential tenants visualise what it might be like to live in the property before moving in. If there’s wiggle room in the budget, consider calling in the professionals
Put plants in every room. Greenery adds a fresh touch to the space.
Pay attention to furniture placement. Arrange furniture in a way that makes the room appear larger and clutter free.
Use the location as a theme. If the property is near the ocean, for example, add a few decorative seaside touches.
Decorate with a neutral palette. Rental properties with a neutral palette tend to be more popular than ones with bold palettes.
Perform a deep clean. Before staging the property, perform a move out clean.
Hide personal belongings. Depersonalising the space allows potential tenants to visualise themselves living in the property.
Invest in good quality furniture, that’s not precious or easily breakable. If you’ve picked your tenants wisely, you won’t need to worry about damages, however everyday wear and tear is a reality in any household, especially one where you’re not there. Ensure the furniture you buy sits nicely between durability and price. We recommend classic staples that your tenant can use with their own decor, think neutral colour tones, stainless steel appliances and easy to clean materials.
Photograph the Rental Unit
With the property beautifully staged, it’s time for “lights, camera, action”. Without being able to step foot into the property, tenants will almost always scroll through the gallery of an online listing. If the photos aren’t rent-worthy, they’ll immediately click away. If you’re a budding DIY photographer, here are some tips for taking real estate photography.
Use a wide-angle lens. Wide angle lenses will let you fit the entire room into a single shot with little distortion.
Ensure photos are sharp. Out of focus and blurry photos won’t do your listing any favours.
Experiment with angles. Take multiple shots of each room at various positions to find the most flattering angles.
Shoot during the day. Natural sunlight will make rooms appear more inviting.
Go outside. Don’t forget to take outdoor shots that can give tenants a sense of the neighbourhood.
Edit, edit, edit. Choose only the best photos, retouching and editing out blemishes as needed.
If you’re not confident in taking great photos, it’s worth paying a professional photographer to make a visit to your property. Only taking a few hours, they’ll have the expertise and equipment to make your rental property look its best.
Setting the Right Prices
Compare with the Neighbours
Every first-time landlord will eventually ask, “How much should I rent my house out for”? To figure out how much rent to charge, researching similar listings in surrounding suburbs should give you a better idea of what’s happening in the rental market. Online sites such as realestate.com.au or domain.com.au will allow you to compare listings based on property type, the number of bedrooms, as well as amenities such as balconies, gyms, or swimming pools. If you already have a price in mind, this research will show how you stack up against current offerings and if any adjustments need to be made.
Base it Off Property Value
An alternative to pricing against your competition is to charge rent based off of the property value. According to the Property Observer, a quick rule of thumb is to charge, $100.00 per $100,00.00 of your home’s weekly value.
For example, if your home is valued at $500,000.00, the weekly rent you should charge is $500.00.
Maintaining the Rental Property
Finding the Right Tenants
With rental properties, your goal should be to find reliable tenants who pay on time and treat your property with respect. When prospective tenants submit an application, thoroughly perform background checks. At a minimum, the application form should ask for references from an employer, a previous estate agent, and documents to verify identification.
Contact the references and confirm the tenant’s reliability, rental history and employment status. TenancyCheck.com.au provides helpful information for landlords when screening a prospective tenant. If you opted to hire a property manager, they will handle the listing, application and screening process on your behalf.
Responsibilities as a Landlord
Landlords have a number of legal obligations when it comes to renting out a property. Here are a few of the key responsibilities as outlined by Fair Trading NSW.
Prepare the Tenancy Agreement
Provide tenant with a New Tenant Checklist
Ensure property complies with safety regulations
Complete an initial condition report
Lodge the bond with NSW Fair Trading
Hiring a Property Manager
If the idea of becoming a landlord and dealing directly with tenants is a concern, you can always hire a property manager to handle the duties of renting out your property. A property manager can handle all aspects of the rental process, from finding the right tenants to managing disputes. Here are just a few of the benefits of sharing the responsibility with a dedicated property manager.
1.Property managers can save time
Property managers will keep track of rental payments, perform inspections, be in regular communication with tenants and carry out through reference checks. They’ll also coordinate repairs and maintenance, keeping you informed of costs and progress.
2.Property managers act as a buffer
When it comes to chasing down rental payments and dealing with ongoing issues, it’s great to have a property manager to act as the buffer between you and the tenant. If necessary, they can also carry out an eviction.
3.Property managers are experienced
As a first-time homeowner, you’ll need all the help you can get. Experienced property managers will bring a wealth of experience, including long-lasting relationships with trusted contacts such as plumbers and electricians if maintenance issues arise.