Top 5 Things Every Landlord Needs to Know
Renting out an investment property can be a great source of extra income. But, there are a number of things every landlord should know before taking this big step. Here are five essential tips to follow to get the most out of your rental property.
Hire a Great Property Manager
Managing your property yourself can be stressful and time-consuming. There are a lot of things to take into account, including:
- Collecting rent.
- Maintaining the property.
- Dealing with emergencies quickly when they arise.
All landlords, particularly new landlords, find these things challenging. If you don’t live close to your rental property, these situations can be even more difficult. If you are not an expert and you don’t have a lot of time, hiring a property manager makes sense.
An experienced property management company will be able to deal with all these situations quickly and effectively. They have teams of tradespeople who can deal with maintenance and repairs. They are also accustomed to finding good tenants who will treat your property responsibly.
Understand Your Rights and Obligations
As a landlord, it’s essential to understand your rights and the rights of your tenants. If you don’t operate within the law, your tenants could take you to court. This can end up costing you a lot of money.
Every state and territory in Australia has its own laws surrounding rental properties. It’s important to familiarise yourself with the legislation in your area. These laws cover practically every aspect of a tenancy, such as:
- Disputes over rent arrears or increases
- Repairs and maintenance
- Security and privacy
It’s vital to understand what your rights are and what obligations are expected of you. You need to draw up rental agreements that cover all these aspects. This way you can resolve any disputes quickly and fairly, without the need for legal battles.
How to Find and Keep “Unicorn Tenants”
Do the perfect tenants exist? It can be difficult finding tenants who treat your property well. However, it’s possible when you know what to look for and make the right efforts.
You have the best chance of finding good tenants if you cast your net widely. Run a prominent advertising campaign highlighting your property’s best features. Appeal to tenants’ sense of aspiration. However, you shouldn’t make false claims, as this will discourage good tenants. They need to know you’re an honest and trustworthy landlord.
You should always perform background checks on any prospective tenants before you hand them the keys. If they’re honest and responsible, they won’t object. A property manager can be useful here as they know what checks to do and how to do them.
Once you’ve found good, reliable tenants, you’ll need to make an effort to keep them. Tenants appreciate timely maintenance. Make sure your property looks attractive and maintain it to a consistently high standard.
Be sure to repair broken things promptly. In the case of an emergency, make every effort to get it fixed right away. If you look after your tenants’ standard of living, they will reward you with longer trouble free tenancies.
Obtain Landlord Insurance and Other Coverage
The issues arising from an investment property are different from those in your own home. This is why purchasing landlord insurance needs to be a priority. It covers you if your tenants maliciously damage your property or if they neglect to pay their rent. You should also consider obtaining income protection.
Your rental property might only be part of your income. You’ll still need to pay the mortgage on it, even if you fall ill and cannot work. Insurance can be very complicated so it’s worth talking to an advisor. The proper coverage can make sure you’re protected for every eventuality.
Know the Tax Rules and Benefits for Landlords
Part of your legal obligation as a landlord is understanding tax rules surrounding rental properties. Currently, in the Northern Territory, some of your expenses are tax-deductible, including:
- Property manager's fees
- The cost of landlord insurance
- Repairs and maintenance costs
However, it’s essential to understand how the tax system works. The ATO website is a great starting point. It offers plenty of helpful information as well as seeking the advice of an Accountant.
You should also be sure to keep detailed records of your income and expenditures. These should start as soon as you buy your investment property.
Learn to Be a Landlord
Like all things, learning to become a good landlord takes time. But it doesn’t have to be difficult if you seek the right advice. Talk to other landlords, property managers, and financial professionals. They can help you keep your investment property running smoothly.