Get Your Investment Property Ready For Rent In 2021

Are you a Perth landlord with a rental property? According to the most recent REIWA figures, Perth's rental vacancy rate has dropped to 1%. Its lowest level in the last 40 years. With these figures, there's no better time to be a landlord. But, to maximize investment returns, landlords need to ensure properties are market-ready. This guide will help you get your property rent-ready.

TL;DR: Before Tenants Move In

There are things you must do to the property before your tenants move in. This includes legal obligations, as well as good business practices.

Requirements:

Recommendations:

 

Hiring A Property Manager Or Doing It Yourself

 

Once you decide to lease a property, you need to decide whether you will manage the tenancy yourself or hire a property manager to do it for you. It doesn’t have to be all or nothing, and most agents are flexible when it comes to how involved you want to be.

 

You might like to hire an agent to find tenants and handle bond details while you manage maintenance. Or you could hire an agent to collect rent and do everything else yourself. But when going with an agent, it’s often less risky to let them handle as much as possible.

 

There are plenty of reasons to hire an agent. Including how far away you live relative to the property, your experience as a landlord, and how busy your life is. For whatever reason, it may be wise to go with an agent.

 

The fee you pay an agent is minor compared to the value a good agent provides. However, managing the property yourself is feasible if you’re prepared to put in the work.

 

 

Choosing A Property Management Agent

 

If you decide to hire a property manager, make sure to check out the Benchmark website for helpful advice. At the very least, you should consider the following factors:

 

Reduce Future Maintenance Costs

 

If there’s one thing that drags the return of an investment property into the red it’s maintenance costs. This is especially true for self-managed properties.

 

Agents generally have policies and procedures in place which address maintenance issues. But this is not always the case for self-managed properties. Here is some useful info to help you keep your maintenance cost in check.

 

First, there are 3 things you must do to the property before your tenants move in.

  1. Check that the property and its contents are clean and habitable.

  2. Check that the property has the bare minimum of security.

  3. Make sure the property complies with all building, health, and safety regulations.

 

Interior Maintenance

 

During the tenancy, you must keep the premises in a reasonable state of repair and follow all building, health, and safety regulations. A bit of pre-tenancy work can save a mountain of maintenance down the track.

 

First, it’s important to know what maintenance the tenant and landlord will each be responsible for.

 

The tenant looks after basic housekeeping duties. Things like changing light bulbs, cleaning, dusting and removing cobwebs both inside and out.

 

But the landlord handles the property’s upkeep. This includes plumbing and the maintenance of any existing contents, such as the stove, washing machine, or air conditioner. So before a new tenant moves in, make sure these things are in good working order.

Also, there is absolutely no mold or mildew allowed in your gutters or other fixtures. So fix any areas with poor ventilation to avoid future mold problems, which can be costly.

 

Exterior Maintenance

 

If your property has any outdoor areas or gardens, make sure they are cleared, clean, and tidy. During the tenancy, you need to know who takes care of what. Cutting back trees and maintaining fire breaks are the landlord’s responsibility.

 

Light gardening, such as mowing lawns, weeding, and light pruning, is looked after by your tenant. Although, you will need to supply them with the necessary hoses, sprinklers, and other equipment to upkeep any gardens.

 

Every garden reticulation system requires routine maintenance, for which the landlord is responsible. Make sure your retic system is in good working order to avoid any costly damage to your gardens.

 

Also, leave clear instructions on how to use the retic system before the start of a new tenancy. This is also handy for any trades-people required to work on the retic.

 

Your tenant should have constant access to the retic system’s timer box. Setting and locking the timer yourself gives your tenant no control over the system. And this can cause issues with water usage, especially in the instance of leaks and breakages.

 

Preventative Maintenance

 

Preventative maintenance can save you hundreds or even thousands of dollars later on. This is especially true when it comes to maintenance on essential services and ‘Urgent Repairs’. Urgent Repairs can be very expensive due to the timely response required to fix them. To avoid any bill shocks, you should inspect and fix any worn or near-damaged essential services before a new tenant.

 

When a tenant notifies you of an urgent repair, you must contact a repairer within 24-48 hours. It’s also your responsibility to keep in touch with the repairer to ensure they completed the repairs as soon as possible.

 

It’s a good idea to give the tenant clear procedures on what to do in an emergency, including emergency phone numbers and, where possible preferred service providers to use in an emergency.

 

If the tenant has been unable to contact you within 24-48 hours after the damage, the tenant can arrange for a repairer. The tenant can only arrange for repairs to be done to the extent necessary, and a suitably qualified repairer must do them. While the tenant pays for the repairs, the landlord must reimburse the tenant for any reasonable expenses. Being over-prepared can help save you in the event of an emergency.

 

Other Maintenance

 

Painting

 

Painting offers a great opportunity to maximize your rent. Simply choosing a bold color for an outside street-facing feature wall can set your property apart from others in the neighborhood.

 

Generally, the landlord is responsible for painting. Only if you have given permission should the tenant paint the property. In that case, it is best if you choose the color and pay for the paint.

 

Control of pests and vermin

 

Keeping on top of pests saves costs later on. Make sure you take preventative measures to exterminate pests before they become an infestation. Because some infestations can be difficult to control once they take hold. This could cost hundreds of dollars more than preventing it in the first place.

 

During the tenancy, any infestation that requires the services of a pest control operator is your responsibility. You’re also in charge of any annual maintenance inspections.

 

However, if you choose to allow pets, your tenant is responsible for infestations that your tenant’s pet/s may cause – and for which you have proof. The tenant should take basic pest prevention measures regularly, such as proper food storage and the use of sprays and baits.

 

Security and Liveability

 

Minimum levels of security

 

The Western Australian residential tenancy laws mandate lessors to provide and maintain locks. This is to ensure rental premises are reasonably secure. There are minimum security standards, and your rental property must now meet these requirements.

 

These requirements include:

 

According to Australian Standards, a deadlock is “a bolt that is not actuated by a spring.” The bolt cannot be returned by end pressure once it has been locked.”

 

There is an exception for residential properties on the Register of Heritage Places. This also applies to properties zoned for agricultural or rural use under a local planning scheme. If a strata company is responsible for the lighting at the main entrance, the requirement for light does not apply. You may want to provide additional security measures for commercial reasons. For example, installing keyed window locks or a security alarm will increase the property’s value and may help you retain tenants.

 

It’s important to note that the landlord is responsible for making sure the rental property is safe to live in. A landlord owes a duty of care to tenants and anyone the tenant invites into the property under common law.

 

State of cleanliness

 

The Act requires tenants to keep the property reasonably clean. However, what one person considers “clean” may not be acceptable by others.

 

You can assist tenants by providing a checklist of items that they should clean at the end of a tenancy, such as:

 

You must conduct and provide a Property Condition Report (PCR) at the beginning and end of a tenancy to help avoid disputes.

 

Property Condition Reports

 

Property condition reports are used to avoid an altercation with the tenant over property damage. Tenancy laws require you to prepare a property condition report. This report describes the property’s condition at the beginning and tenancy end. You can use the property condition report to list all of the contents and determine whether they are clean, undamaged, or functional. You can also include additional details about any damage or poor condition. This includes details like cracked ceiling, torn fly screen, stained carpet, or dirty or chipped walls.

 

It’s a good idea to describe the condition of any lawns or garden beds in the report. This includes shrubs, trees, the number of garden sprinklers, and the bore or reticulation system. If there is a pool or spa, keep track of its condition, accessories, and cleaning equipment. Ensure it complies with pool safety regulations.

 

Water, Gas and Electricity Bills

 

In most cases, you pay the water rates, and the tenant pays for their utility usage

 

You must indicate whether the electricity, gas, and water services are separately metered. This should reflect in the prescribed tenancy agreement. If any of these services do not have separate metering, you should explain how you will calculate the tenant’s utility bill. It would help if you documented this in the Prescribed Tenancy Agreement. A calculation for electricity, for example, could be as follows:

 

“$ total amount of bill ÷ total number of bedrooms in the apartment block × number of bedrooms in the rental premises in this tenancy agreement.”

 

You must include this calculation because the tenant is not obligated to pay a utility bill. They can only pay when there is a written agreement on how you calculate the bill. You must not charge the tenant any amount other than the consumption cost. This is because the tenant receives their electricity bill from you and not directly from the electricity supplier. You cannot add an account or administration fee.

 

Tenant Code of Conduct

 

Basic code of conduct requirements is common sense, such as not engaging in any illegal activity on the premises or causing a nuisance, or causing excessive noise that disturbs neighbors. If your property has explicit Code of Conduct requirements, make prospective tenants aware of them before they agree to rent your property. It’s important to provide clear instructions on the appropriate procedures tenants are to use to report any issues. It’s also good practice to provide neighbors with contact information to ensure they can report to you any concerns they may have.

 

Insurance

 

You are responsible for insuring buildings, fixtures, and fittings, such as the stove and hot water system, against loss or damage. You may consider rental income protection insurance. This covers situations where a tenant vacates a property, and unpaid rent and damage are not recoverable.

 

Keys

 

Any key to a door, window, garage, or letterbox should be included in the keys you give the tenant. Only hand over the keys to the tenants after all bond and rent in advance have been paid and all documents have been signed. You can’t charge a deposit for keys, but you can charge for the actual cost of replacing them.

 

Minimizing Problems

 

Taking a proactive, organized and transparent approach generally minimizes the risks of expensive problems occurring. For this reason, we recommend following 3 simple rules:

1- where possible, do preventative maintenance

2- do your due diligence

3- document appropriately

 

Unexpected difficulties between tenants and lessors do arise, even with the best planning. Your rental property is like any business, and your tenants are your customers. It would be best if you addressed your customer’s concerns properly. Just like any well-managed business.

 

Your goal is to avoid complaints, but when they arise, you should try to resolve them quickly and amicably. You must recognize that your tenants have the right to complain. Most especially about aspects of their tenancy that they believe are not in accordance with the tenancy agreement or the Act. They also have the right to have their complaints dealt with fairly.

 

The following pointers should help you avoid escalating minor issues into major conflicts that end up in court.

 

  1. Ensure everything is documented correctly, such as in a Property Conditions Report and Prescribed Rental Agreement.

  2. You may need to adjust the security bond.

  3. Have a good problem-solving strategy.

 

Taking your time to ensure that your rental property is ready for a rental will help mitigate any risks that may arise down the road. This will ensure that the return on investment for your property is as sustainable as possible. If you feel you won’t be able to manage any of the items mentioned above, make sure to contact your property manager or one of our experts for advice.

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