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CT Real Estate
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Renting Your Property: A Guide for Landlords by CT Real Estate

 

 

 

 

 

 

 

 

Melbourne has always been known for its great rental returns. But what can you do to ensure that you are getting the best value on your property?
To start, get a good understanding of the leasing process and the different options available. This will prepare you for what is to come. With that in mind, our dedicated team at CT Real Estate has compiled everything you need to know to help you make confident decisions regarding your property. 

In this guide, we cover the topics that are most pertinent to you as a landlord. These include: 

  • The leasing process from start to finish
  • Property management responsibilities
  • Being strategic in post-covid times
  • Tips to ensure the best return on your investment
  • The costs involved
  • Mistakes to avoid

Choosing the right tenants

 

When it comes to choosing tenants, landlords have the final say. It’s an important decision as there’s nothing worse than dealing with difficult tenants.

Daily calls, unpaid rent or damaged furnishings can lead to frustration and kill your dream of being a carefree landlord.

Conversely, choose the right tenants and the process will be smooth; possibly enjoyable. 

So is there a formula to selecting your tenant or it is just a mean gamble? We like to think that while you cannot control how things play out in the future, you can set yourself up for success. Here’s what we suggest. 

Define your rental target audience

Before you do anything else, take some time to envision your ideal tenant and how you would attract them. 

Consider your location and property features and to whom it would most appeal- individuals, families, students etc. Think also about surrounding amenities like universities, hospitals, office building and how that may attract a certain demographic. Then consider who from that pool would make a great tenant. The answer you come up with is your rental target audience. 

Now that you have your target audience in mind, market your home accordingly. Put yourself in their shoes and think of ways to make your unit attractive to them. This includes furnishing the home with the right appliances and presenting it in its best light through pictures and good copy on your advertisement. 

Finally, first impressions are crucial so ensure that your place is spotless, well-maintained and inviting. It’s true that like-attracts-like and a home that is cared for and respected will attract someone who will expect to do the same. 

Number of residents and pets

Another factor to consider is the number of people who will reside in your property. Generally speaking, more residents would mean higher risk of wear and tear to furnishings and the house. As a rule, there should be a maximum of 2 people per room to avoid overcrowding.

When it comes to dogs and cats, pets shouldn’t be an immediate deal breaker but having them could also mean more damage. Nevertheless, allowing pets may enable you to charge higher rent and a longer tenancy term. It can also be said that responsible pet owners often make responsible tenants.

In the end, weigh up the risks and benefits and go with what makes sense to you. 

Pay attention at inspections

During inspections, pay attention to potential tenants and make mental or physical notes of your observations. Remember the well-prepared couple or the organized university students and be aware when someone reeks of cigarette smoke when they’ve marked themselves as non-smokers on their application. 

If you do strike up conversations, casually ask them about what they do or what their plans are. This will give you some insight into their lives and the type of renters they will be. 

After the inspections, consult your agent and discuss some of your observations. A good agent will be experienced enough to point out things you may have missed or confirm some of your thoughts. 

Screening and research

Screening cannot be emphasized enough. When looking through applications, go through them carefully and read between the lines. This includes scrutinizing employment records and rental history.

Even when the application looks flawless, remember that it’s better to be prudent and carry out due diligence. This includes conducting reference checks and speaking to past landlords or employers to see if things add up. 

Your property agent will have access to the National Tenancy Database. Ensure that they run the necessary checks and screen for red flags like past disputes with landlords, court orders and even bankruptcy. 

Of course, don’t forget to verify identity documents. 

Go with your gut and be prepared

Now that you have done all you can to ensure the best match, make your decision. Sometimes it may not be as obvious and if deciding between strong candidates, go with your gut. 

You have done your best and it will likely be a stress-free experience. Yet, sometimes things don’t go according to plan- no matter how hard you try. 

Accidents happen, carpets get stained, employment circumstances may change. 

For times like these, it’s comforting to know that you have the best help from a property manager you can trust- someone who will run timely inspections with a keen eye, deal with maintenance issues, follow up on unpaid rent and provide invaluable advice every step of the way. 

You cannot guarantee that things will go smoothly, but you have the help you need if they don’t. To find out more, speak to one of our friendly staff at CT Real Estate today. 

Getting the most out of your property

 


Property is a popular investment option as rental provides steady and passive income for the owner. But are you doing all you can to maximise returns on your investment? 

A few tweaks here and there can help you add value to your property and boost profits. Here’s what we suggest. 

Price your property right

Always begin the process by researching the area. Get a ballpark estimate by comparing listed properties with similar features- rooms, furnishings, area online. 

To get a more accurate figure, get a property assessment from a real estate company. CT Real Estate is offering no obligation assessments to interested homeowners.
Click here to connect with them. 

Another tip is to start pricing on the higher end of the range to test the market. For example, for a range like $350-$400pw, aim for above the median but slightly below the top at $395. The general rule is that you can always lower the price later on if there are no biters. But don’t price it unreasonably high, as this may cause it to remain on the market for longer and hence, less rent over time. Which leads us to the next point. 

Shortened length of vacancy period

Investors want their properties rented out as soon as possible. This is because time is money and the more time a property spends on the market, the less time it spends collecting rent for you. So the goal is to have a relatively short vacancy period. 

To achieve this, your unit needs to be properly advertised to the right tenants. It’s hard when you don’t have enough local knowledge or connections to your target market.

This is where an experienced property manager can help. CT Real Estate agents have specific knowledge of local suburbs and also connections to databases of potential tenants. They are professionals at setting up the best match, enabling you to start seeing returns on your investment sooner rather than later. 

Hire an experienced property manager

Trying to navigate the rental market on your own can be both scary and risky. Instead, a majority of landlords- around 75%, choose to hire a property manager. While there is a fee involved, the benefits far outweigh the cost.

An experienced agent will have expert knowledge to guide you through the leasing process. They will be more in touch with the market (including rates and prices), have special access to rental databases and be able to factor in your personal situation as you strategically put your place up for rent. 

But they do so much more that just list your property. 

In fact once your property is listed, they cover areas like property maintenance, collecting rent and conducting regular inspections. All of this serves to make the process a smoother and hassle free one for you- the landlord. 

It would be a nightmare for most landlords to deal with middle of the night repairs, tenant disputes and unpaid rent without the guidance and expertise of a trusted property manager. A good agent will take it all in their stride and ensure that your interests are protected. 

So while there is a fee involved, hiring an experienced property manager leads to less stress, higher savings and better returns. It’s the safest way to go for most investors.  

Tax deductions 

Maximise returns by being on top of tax matters when it comes to your rental. First, learn about the deductions you can claim and keep records of property related expenses. 

Many investors don’t claim all the deductions they are entitled to- depreciation of home furnishings, real estate agent commissions and advertising cost amongst others. 

Tax time can be stressful but agencies like CT Real Estate do everything they can to help by providing rental statements, invoices, consolidating bills and preparing yearly statements thus simplifying the process for you. Contact them to find out more about their services. 

Furnish the unit

Furnished units get higher rent. Tenants looking for convenience- ie new families from overseas, students who have left home and other individuals who may not have much furniture will be willing to pay more for a place that they can move into immediately. 

But that’s not all. Furnishing a place means that you can depreciate it as well. There’s an advantage for a tax concession come tax time. Remember to note down the values of your furnishings and get your accountant to factor those in. 

So think about the essentials your tenants will require. Things like beds, fridge, dishwasher, washing machine, television, sofa and dining table make the home livable and may increase your rent by up to 10%- 20% depending on your area and demand. 

Add another room or rent out room by room 

These next strategies have to do with rooms. The first is to consider adding a room to your property if you have the space, time and money for it. Properties with more rooms fetch higher rent than the exact same property with less. 

Think about that extra lounge that you can repurpose into another room or if there’s space for an extension. It takes some time and effort, but will definitely increase your rental potential. 

Another thing you could do is to rent out room by room. Depending on your locality and the facilities around you, this could work in your favour. 

This arrangement is especially popular among students and young working adults in or close to the city. It does require more work coordinating- as always, an experienced agent will take care of most of it for you, but it will allow you to charge more on the lease. 

Leasing out your property

Leasing out your property? Here’s what’s involved

The leasing process can be a daunting one for many homeowners. How should you price your rental? Do you need an agent? Where do you begin? 

Below we run through the process from start to finish- giving you a brief but sound overview and setting you up for success.

1. Start thinking about prices- research your area

Get a realistic idea of rental prices by first researching your suburb. 

Check out what is being leased and how much for online. Compare properties with similar features to yours- number of rooms and baths, land size as well as the furnishings that come along. Take note of the observed price range and ask yourself if that is what you’re looking for. 

Note the distance to local amenities like shops and medical centers but also find out which school zone your house falls into. Houses in catchment areas of highly popular schools could potentially fetch better rent.

Finally, speak to a local property manager with specific information and experience in your area who can then advise you accordingly.

2.  Prepare your property

Before you start to advertise, it’s prudent to think about what you need to do to add value to your unit. 

Start by removing all personal items and valuables that you intend to take with you. It’s much easier to work with a decluttered house. 

Now look carefully at each part of the property. There may be things that need repairing and others that need some sprucing up. Replace anything that’s broken or faulty and consider upgrades that will make your house more attractive. 

When thinking about upgrades, consider your potential clients. Students will have different needs and wants from a growing family. 

Here is a quick checklist. 

Repairs:

  • Heating and cooling 
  • All lights
  • Windows
  • Doors and locks
  • Appliances (washing machine, dryer, dishwasher)
  • Carpets
  • Walls (consider a fresh coat of paint)
  • Professional cleaning

Upgrades:

  • Furniture
  • Beds
  • Decking
  • Stovetop and oven
  • Garden and landscaping


3. Consider a property manager

While you can lease out property independently, there are many advantages to enlisting the help of a property manager. 

A property manager does more than just lease a property. 

In fact their services cover areas like property maintenance, running proper reference checks for potential tenants, checking legal terms, collecting rent and conducting regular inspections. All of this serves to make the process a smoother and hassle-free one for you- the landlord. 

It would be a nightmare for most landlords to deal with middle of the night repairs, tenant disputes and unpaid rent without the guidance and expertise of a trusted property manager. A good agent will take it all in their stride and ensure that your interests are protected. 

So while there is a fee involved, an experienced property manager would provide sound advice and quality service that could lead to less stress, higher savings and better returns. It’s the safest way to go for most investors.

4. Professional photos and staging

A quick search online will show you listings of houses that look inviting and warm- enticing enough for you to see yourself living there. But next to those, you’ll find listings that just don’t have that same attraction. 

Staging and quality photos can make that difference. Staging is the process of styling your house- usually by a professional, to look its best to its potential tenants.

This includes furnishings, pictures and decorations. It does cost a bit and it’s often used for higher end rental units. As a landlord, you will have to consider the cost and work out if it’s worth it for your property. 

That said, quality photos are a must for any type of rental. Use a good camera or hire a professional to get shots that showcase your house in its best light. 

5. Advertise and run inspections

Advertising is about making sure your house is visible and attractive to potential clients. 

If you have a property manager, they will take care of the process for you. If you’re doing it on your own, ensure that your home is listed on popular websites like realestate.com and domain.com. You may consider other websites that you find relevant. 

Listing involves compiling quality photos and creating good copy that will help you communicate value to your target renters. Always include details like proximity to local facilities, school catchment zones and other plus points about the area. Once again, an experienced agent will be able to highlight your property’s best selling points effortlessly to readers. 

You’ll also need to decide on inspections times. Think about the type of person targeted and consider their schedules before setting inspection times- weekends tend to be most popular. Your agent will run the inspections for you and help you connect with potential tenants. 

6. Decide on a tenant and the agreement type

Applications will start to come in and with them, the responsibility to choose your tenant. 

To start, go through applications with a discerning eye. Consider the number of people who will be residing there, if they have pets and how long they are renting for. 

Be diligent to run reference checks and find out about their rental history and employment status. Don’t forget to verify identity documents too. Your property agent will have access to the National Tenancy Database where they will screen for red flags like past disputes with landlords, court orders and even bankruptcy. 

Another thing to consider is the type of lease you will be looking at. These are the 3 types:

  1. Short term fixed (fixed period from 1 month to 5 years)
  2. Long term fixed (fixed period for more than 5 years)
  3. Periodic (month-by-month lease)

Each type of lease varies in terms of flexibility and pricing. Think about your personal situation and decide on what works best for you.

7. Forms and Legal Documents

The tenancy agreement is a very important document. It is a legal document so ensure that the details on it are accurate.

It includes: 

  • Landlord details
  • Tenant details
  • Lease type
  • Rental price
  • Bond collection
  • Obligations for both parties (maintenance, inspections, restrictions on subletting etc)
  • Special terms

For landlords that collect a bond, an application needs to be made by your agent to RTBA to hold the bond during the tenancy period. Make a copy for safe-keeping. 

Ensure that you keep all documents for tax. This includes invoices for maintenance, landlord insurance, rental documentation and other expenses. 

To find out more, speak to one of our agents for a consult.