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So you've got an investment property you'd like to rent out or are considering putting your own home up for rent? Fantastic! But before putting your property on the rental market, there are a number of recommendations and regulations you need to be aware of.
Read more for the video summary and full article.
Repair anything which is broken around the property
If you have been living in the home, chances are there are some things you've put off to fix later. The old "we'll get to that one day" phrase may have been uttered and you've carried on living with or ignoring the matter. As an owner living in the home, this is fine. But a tenant should not be expected to put up with these things, especially if they relate to safety, and making those final improvements before you rent can not only make your property more appealing at inspection time, it can assist in maximising the rent you'll get.
The time to fix anything that's broken or not functioning is prior to when you list your house for rent. This could include fixing uneven pathways, ensuring all stormwater drainage is working effectively, fixing a dripping tap and ensuring fences are solid.
Fix uneven pathways around the home
Uneven pathways could be a tripping hazard for your new tenants, especially if elderly or if they have children. You may have become accustomed to the ups and downs of where to walk, but your new tenants and their visitors have not. Cracked and uneven pathways can also diminish the perceived value of the property, decreasing the rental return you may expect.
Ensure drainage around the property is working effectively
We've seen several instances of stormwater drainage not working as it should at an investment property. Not only can this cause hassles for the tenant, their property as well as yours may become damaged in the event of water not adequately draining, leading to insurance claims and other complexities. We've even seen a backyard with a drain grate installed, draining through a pipe several metres before the pipe simply ends underneath soil. In heavy rain this caused major problems, needed repairs which also required several days of access to the property, inconveniencing the tenant. Always ensure gutters around the home are free of leaves and blockage also.
Fix dripping taps before tenants move in
Dripping taps of course should be addressed, not only to prevent the inevitable complaint from your tenants within days of them moving in, but also to save water and of course money. Dripping taps can be very costly in the long run. Consider also that a single dripping tap can send a message to the tenant (especially a new or uncertain tenant) that a dripping tap is just something to live with while they're renting. And so the costly problem continues...
Mend broken fences around the property
Fences surrounding the property should be mended if broken. Not only can a fully secure yard increase the rental value of the property, this can ensure the safety of your tenants, especially those with young children.
New investors sometimes become relaxed about the state of a deteriorated fence, believing that if there are no pets next door, it's not a problem. However, your neighbours may move out and new neighbours with an excited animal may inhabit their backyard - something you're not likely to be as aware of if you're no longer living at the property. After all, you can't control what happens in the neighbour's yard, but you can limit how this impacts your property and tenants.
Ensure your rental property complies with safety regulations
Landlords are responsible for ensuring their rental property complies with current safety regulations and guidelines. Compliance includes (but is not limited to) aspects such as:
If you are at all unsure of your responsibilities before renting out your property, speak with an experienced property manager.
Service fixtures such as air conditioning
Before renting the property out, you should service fixtures such as air conditioning. This not only ensures that the air conditioning unit is clean and working as it should for your new tenants, it gives you peace of mind of the full working condition you are leaving the property in.
Pest treatment and professional cleaning of the rental property
It is strongly recommended that you complete a pest inspection and treatment of your home before it is rented to tenants. Again, this provides you peace of mind that you're handing the keys over with the property in tip-top condition, and providing your new tenants with a comfortable start to their tenancy.
Additionally, we always recommend that the property be professionally cleaned before it is rented out. Given that you expect the property to be handed back to you in great condition, as close as possible to the way it was when first rented out, you want to set the benchmark of expected cleanliness very high from the day the tenants move in. The cleanliness of the home will be documented in the ingoing inspection report, including detailed photos, so aim very high at this point!
Carefully consider what to leave behind at a rental property
When preparing your home for cleaning, give special thought to anything you may leave behind. We've had landlords move interstate and internationally, and wish to leave behind items such as fridges, furniture and gardening equipment. This is fine, as long as it is clearly communicated to prospective tenants that these are inclusions and not burdens, and the items are in perfect working order. Such inclusions may add rental value and desirability.
Be careful however to not leave things behind simply because you don't want to take them with you or deal with their disposal. For example, hardware such wood planks, old storage containers, or undesired furniture can devalue a property and be a turn-off for prospective tenants.
Get your depreciation report done before tenants move in
A depreciation report should be completed before the tenants move in, as access is much easier to arrange before the property is occupied. This report is of course vital to assisting in minimising your tax obligations.
Arrange landlords insurance for the rental property
Landlord insurance must be secured for the property. It is likely your tenant will arrange their own contents insurance, however you must remember to let your insurer know that you are no longer living in the property (if you previously lived there with home and contents insurance in place) and that you wish to arrange landlords insurance.
An experienced property manager will guide you and make the process hassle free
In summary, there is a lot to think about when preparing an investment property to rent out. Of course, an experienced property manager will guide you in these matters and assist in applying expertise to ensure the process is smooth and hassle free for you.
If you are preparing your investment property for the rental market now, give us a call. We'd be happy to help streamline the process for you.
We provide expert property management in Newcastle and Lake Macquarie. Based in Charlestown NSW, we have been delighting property investors with our personal, professional service since 2011. If you found this article helpful or enjoyable, please subscribe or share it with someone else who may benefit.
Carnelian Property Management Newcastle NSW
We are a family-owned and run Charlestown real estate agent offering expert property management across Newcastle and Lake Macquarie.