Getting house ready for rental + Landlord tips

[Bumperstump Cummerbund]

We've made the decision to rent out our house and move in with my parents. It shouldn't be too awful, we don't have kids, and they're in a 4x2 with just the two of them. Mum's just had to stop working for her health (she has MS), so it's gonna help all of us.

So now we've gotta get this house ready to be a rental, find a property manager - probably the same guy who's selling our other block - and become landlords.

I have absolutely no idea how to go about all this. Please, unleash upon me your knowledge!

[YoYo]

I'm in the process of doing this myself...our tenants are moving out so we have to do it all again.

Just make sure everything is really clear with the agent. We had one when we first rented out our house and she was terrible. Getting things sorted on our house without telling us first, it was a whole lot of money wasted having it 'managed' but I was actually doing more work. We ended up going private with our tenants and it was much easier. especially when we were managing it from overseas.

Make sure you have clear expectations on what the agent and tenants need to do. Even though you pay the agent, tenants seem to have more rights!

Good luck!

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[Bumperstump Cummerbund]

Yeah, I'm HOPING having a PM will make things easier, but I've heard many horror stories...

[misty]

Yeah, I'm HOPING having a PM will make things easier, but I've heard many horror stories...

If you are not familiar with all the rules and regulations, then you are definitely best to get yourself a property manager aat least to begin with. Shop around for a good one (there are some bad ones out there, but there are some brilliant ones as well). Ask others who are renting, who manages the property and what they think about the PM. And if you know others in the same area who are landlords, ask for their opinions on who they are using / have used. Why clauses in iten you enter a contract with a PM make sure you read it well first. Many will have sneeky clauses in them which say things like "the managing agent will be entitled to a sales commission if at any time in the future you sell this property to any person who has been a tenant or who veiwed the house whilst looking for a tenant" (and remeber this commission will be paid on TOP of the sales commission to a sales agent). You have the power when finding a PM and you are well within your rights to cross out any clauses in the management contract which you do not feel comfortable with.

You definitely want LL insurance. Terri Sheer is the best one out there on the market, although there are others - just make sure that the others cover everything, many of them exclude a lot of things that are covered under the terri sheer policy. This will cover you in the event of some disaster (the tenant runs out without paying rent, trashes the place, etc). Hopefully you never have to use it. You will also need to ensure you still have building insurance with limited contents insurance (just ensure whatever insurance you have still covers things like carpets and cutains / blinds, etc.

[meow]

Oh good tip about asking around. We chatted to our next door neighbours who were renting and they helped strike one PM off the list.

[misty]

We have specified with our PM that they cann't inncurr any expenses (except for those legislated as emergency expenses) without first getting our approval - there is no maintainence allowance, because we want to ensure that the PM has actually gotten us the best possible quote, and isn't just going ahead with improvements which aren't actually maintainence (plus our IP is a brand new build, so alot of issues are still covered under builders warranty - so we don't want to be out of pocket for things we don't need to be). We also prefer not to have these costs taken out of the rental income - but rather pay for it seperately with the invoices being directed straight to us for payment, so we can put it on the LOC or CC and recyycle a bit of debt ).

Also find yourself an accountant who is actually up-to-date on the ins and outs of taxation of property investment. Many claim they are, but really don't have a clue what they are doing and could end up costing you $$$$ if you are ever audited by the ATO.

[Mak]

There are good property managers out there - interview a few and let them know you are shopping around for the best service and deals. Be realistic about repairs and incurring ongoing costs as part of managing your investment. It can be tricky to detach emotionally from a property you live in to one purely for $$. GL

[OceanPrincess]

Have a think about what will or won't be acceptable to you, for example:
- Pets: acceptable? Inside and outside? Outside only? Not at all?
- Smoking? Ok or not?
- do you have gardens? If so, what about maintenance of the garden? Who's responsible?
- Do you have a pool or anything else special like that?
- What sort of rent would you like? How do you want it paid? Frequency?
- who should the tenants contact in case of emergencies? As in maintenance emergencies, not medical! If the PM calls a plumber/electrician/whatever, it'll cost you a bomb, where if the Professor is sort of handy he might be able to fix some of the smaller things that happen.

Just a few things to think about.

I hope you get good tenants - ours are excellent It's a BB person so I kind of have to say that in case she's reading this Nah j/k she's pretty good!

[OceanPrincess]

Oh landlord's insurance - you gotta get some of that. But if you're in a flat/unit/something with a body corporate, check what's covered thru them.

[Ca Plane Pour Moi]

Are you renting it furnished or unfurnished? What sort of wear and tear is acceptable to you wrt the fittings you are leaving? (eg the wear and tear from a couple is different to that of a family, a single, pets...)

[Traveller]

Make sure the agents actually do their property inspections, and chase them up to ensure they are looking at everything. Or better still find out if you can inspect the property yourself with the agent. Our agents gave our house back to us with damaged walls, bleached carpets, and new TV connection points badly installed in the walls without them noticing anything

[Little Chicken]

Speaking as an excellent tenant , a good property manager is a must as it will make both yours and your tenants life easier.

In the last place I rented, I had 4 different property mangers in one year, through the same agency. Getting anything done was a nightmare. We had maintenance that needed to be done when we first moved in that still wasn't done a year later. No inspections until 3 months before we moved out. We could have trashed the place and no one would have known. The last property manager was the best. The air conditioner broke and sh had it fixed within 2 days, she actually did an inspection. In fact I found out she had every property on the books inspected because none of them had been done. She was absolutely horrified about how it was run.

Also, the tenants are entitled to leave a place as they found it. So if the garden is overgrown, house dirty (not that I am saying yours is), they can leave it like that.

[meow]

When we rented our place I had 3 different propety managers come and visit. They give you all the advice you need on insurance etc, they told me their fees and management practices, I asked about what maintainence we needed to do to bring it to renting standards (small things we were happy to live with but tenants can ask to have fixed) and I got a good feel for them. As an ex-tenant myself (rented for years) I wanted someone who would be nice to the tenants and not make their lives hell, but I also needed someone I could trust to do the job I needed them to do. The 3rd person I saw was brilliant! She took over straight away and organised gardening and anything I wanted- so great because I was busy with a toddler and newborn trying to move overseas.

[YoYo]

Cranky kitten is right..... That is what I do, especially if you're house proud, like I am about my place at home.


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[Little Chicken]

CK actually has a good idea about the major repairs. Have enough set aside in case of hot water system failing, major plumbing malfunction, or the oven needing replacing etc. Look up what constitutes an emergency repar and budget enough to cover one of them.

[YoYo]

Exactly, expect to get only a small return some months from the agent after major works, plus then their fees on top. Also expect to be annoyed when tenants start complaining about things in your house than you've just lived with for x number of years lol!


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[BeautifulMadness]

as a tenant myself, and i have my agents rep cert

good communication is a must,

make sure you know youre rights as a landlord,

and most importantly make sure you dot ur I's and cross ur T's

Also very very important do a condtion report before and after