There has not been a better time to enter the rental property market as an investor. Recent predictions have shown that there will be an exponential increase in residential property rents for this year. This is due to the increasing shortages of accommodation in the country. Australia already had a scarcity in housing even before the pandemic started, and it has not improved since.
The conclusions drawn actually contradict the fear that the property market would suffer due to immigrations restrictions from COVID-19. At this present time, investors have a great opportunity to focus on rentals, with over 25.6 million people in the country. We will now look at some of our best rental property tips, so that you can feel assured by the time your tenant arrives.
How To Get Your Property Ready For Rent
Whilst a lack of accommodation will be relative to the location, Australia’s major cities are currently showing rental yields of between 3.3% and 5.8%. Due to these returns, many property owners are now seriously considering renting out their own properties.
Let’s cover what you need to know.
Setting the Rent
Property Owners have flexibility when it comes to deciding how much rent they want to charge. There will always be certain limitations, which are based on your target occupant’s income level for the neighbourhood. However, you can slightly raise your price point for the more desirable amenities such as an outdoor area, spacious parking area, bathrooms, open kitchen spaces, walk-in closets and more.
Owners will also need to consider the local regulations for tenancies. For example, in New South Wales, you are permitted to increase the rent at any time as long as a 60-day notice period is provided beforehand. This is also similar in the Northern Territory, however the notice period is only 30 days. In Western Australia, you can raise the rent every 6 months, as long as a 60-day notice period is provided.
Maintenance and Repairs
It is important to have a well-built property, as Australian property owners will be responsible for the on-going upkeep of the property. Keeping on top of home inspections, general upkeeping and seasonal prep will help prevent any problems down the line. Whilst tenants do hold some of the responsibility, any issues with the property will ultimately be held accountable to you.
This can range from anything from sanitation to the condition of the amenities. You should also plan what will happen in the event that one of your tenants causes major damage to your property. One option is to use the funds from the bond that was paid by the tenant to secure the property, however this may not cover everything in the case that professional repairs are needed. It is highly recommended that you have landlord insurance which will cover the worst-case scenarios.
Each renter will have their own individual and specific requirements for a potential property. Some may want state-of-the-art kitchens and the highest quality appliances, whilst others may be in the market for a pet-friendly property.
A practical approach in this instance would therefore be to upgrade the countertops or replace the flooring with scratch-resistant materials. Both would increase the value to potential renters and would help protect your investment. Another suggestion is to see which properties are deemed the most popular, and also see what others are charging.
There are many risks with renting, and having landlord insurance is the best way to help protect you from these. Some of these risks include theft, vandalism, damage to the property and also how the guests of the tenants may behave.
Without having landlord insurance, you will be fully accountable for all costs involved. Whilst a comprehensive screening process will help lower the odds of any serious problems, general accidents are still likely to happen regardless. If the economy were to worsen, you would need to know how many shares of rent you can cover yourself. You will also need to know if you can pay for litigation procedures in case one of your tenants is hurt on the property. The majority of landlords simply can’t pay these by themselves, which is why it would be too much of a risk to proceed without insurance.
Final Check-in Before the Tenant Arrives
It is required that both you and your tenant complete an in-going report. During this tour you would both explore the property and document its original condition, although you will most likely have a managing agent who will inspect it on your behalf. It is vital to take photos prior in case any tenant attempts deception later. Certain territories or states will have their own suggested inspection report layouts, which will help provide you with a comprehensive check-list. The cleaner the property is during the tour, the easier it will be to verify its present condition. It is recommended to have a property manager during this time, who can guarantee that everything will look its absolute best. By following this advice, the tenant will then be more likely to return the property in the same condition.
Get Reliable Advice On Property Management From Our Trusted Property Experts Here At Shore Financial
Preparing your property means making sure absolutely everything is in check. The more attention to detail you pay, the less chance you will have potential problems down the line. Whilst an angry tenant may cause you some discomfort, you won’t lose the property or your savings if you have already sorted your landlord insurance.
Do you have any questions about the Sydney Property Market? Here at Shore Financial, we have a dedicated team of property management specialists who can help you go above and beyond the needs of your prospective tenant. For the best chance of success, get in touch with us today.