Renting out property investments is a great option to create a steady passive income. However, landlords have to take care of their property and their tenants. They have to be compliant with housing laws and regulations. Failure to do so could put your investment and rental returns at risk.
Here are some basic guidelines on how to be a good landlord and avoid issues with tenants;
- Ensure Tenant Safety – Before renting out your apartment or house, you first need to make sure that it is in good condition. A good question will be, “Would I like to live in it?” Make the rental property safe and comfortable for your tenants. Make sure that there are no pest infestations, no leaking roofs, stairs are all secure, and all maintenance is up to date. Here is a more in-depth list of items to better prepare your property for tenants. List of items to prepare your property.
- Proper Documentation – Get everything in writing. Proper documentation is your safeguard against possible misunderstandings, disputes and tribunal. Have an experienced property manager draft a lease agreement for you. Make sure that you have the most important factors of the lease documented – dates, parties involved, how notices may be given, rent amount and payment periods, when and how rent must be paid, % of services tenants must pay for, nominated repairers and more. Backup verbal agreements and conversations with paperwork, digital or otherwise.
- Open Communication – Your tenant should have an open line of communication with your property manager, and the property manager must be responsive when it comes to issues arising with the property. Open communications will help minimise misunderstandings and help ensure the best outcome for each party.
- Respect Tenants’ Rights – Review the rules of the tenancy and give special attention to your tenant’s rights. They have privacy rights, which means your property manager needs to give them different periods of notice depending on what type of access is necessary or if you want to inspect the property. Eviction and rental increases depend on the contract but is also regulated to protect the tenants. In a scenario like this, your property manager will be able to guide you through the available courses of action.
- Keep up with the Repairs – Make sure that you keep your property in good condition. A regular check by your property manager will keep you up-to-date on the property’s condition. Request high quality photos and details of each room at each routine inspection. Also, your property manager will encourage your tenants to report repairs as soon as they are aware of them. Once a problem is identified, aim to get it fixed ASAP and keep your tenants in the loop.
- Landlord Insurance – be sure to have a quality landlord insurance policy. Landlord insurance will help protect your investment and income stream should the worst happen. When comparing landlord insurance products, don’t just look at the price – have a look at what each policy covers, the excess charged for each separate claim, no two insurance companies provide the same level of cover.
- Hire a good Property Manager – A good property manager will have an excellent and reliable communication channel between the landlord, tenant and tradespeople. The property manager should act as the conduit between the parties, help identify potential issues before they become substantial and be there to deal with any issues that do arise.
As a landlord, you do have responsibilities and obligations to your tenants, so it’s important to be aware of them and reduce your risk wherever possible. A good property manager is essential to help protect your investment and lower your risk – they know the law, so don’t hesitate to ask them if you have any questions.