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Multiple Tenants and Sub-letting

While many landlords prefer to deal with just one tenant, in some cases having multiple tenants or co-tenants can be financially advantageous. There’s also the case of tenants requesting to sublet and the rules around that.

As a landlord, it’s important that you understand how these arrangements work and what to consider so that you make informed decisions about your property. 

Let’s explore the idea of co-tenancy first. 

Co-tenancy

A co-tenancy is when there are two or more tenants listed on the original tenancy agreement with the landlord. In effect, all parties are equally liable in that agreement. Often this arrangement means the property is divided up between the tenants and you can expect the total rent to be higher. 

So how many co-tenants can you have? While there aren’t clear cut rules around the number of people you can have in a property, here are some guidelines. 

1. One couple per room

The general idea is that there should be no more than one couple per room. That is to say that in a house of 3 rooms, there shouldn’t be more than 6 people on the tenancy agreement. The rationale for this is to avoid overcrowding and to ensure that everyone has a safe and comfortable amount of living space.There is an exception when it comes to children as often, more of them can fit into the one room. 

Also, take into consideration the type of property it is ie. apartments have a restriction on the number of people due to it being a hazard in a fire or emergency. 

2. More people, more work

The more people you have using your property, the higher the risk of wear and tear. Fixed items like your carpets, flooring, stoves will be getting more use for sure. So while it may be tempting to accommodate a higher number of tenants to fetch better rent, you will need to factor in the maintenance issues that will be incurred as a result.

It’s also true that the more people on the agreement, the more work you will have to do. There will be more people to manage when it comes to rental, bills and general upkeep of the home. 

3. Chances of disputes

In a co-tenancy agreement, each tenant is equally responsible for the property. This includes ensuring that rent is paid up on time and that the unit is well looked after. While it all looks fine on paper, there is a chance of disputes between the tenants. In some cases, this could result in late rent, unruly behaviour and neglect of the property. 


Sub-letting

There’s also the case of sub-letting. What is the difference and what are the rules around this arrangement?

Sub-letting happens when the main tenant on the tenancy agreement rents out part of the property to one or more persons. This is different from a co-tenancy or a multiple tenancy agreement as the newer occupant will not have their name on the original agreement. This means that the main tenant continues to take full legal responsibility. 

Here are some terms around sub-letting in Victoria. 

1. Requires landlord’s permission

While the head tenant may have found someone to take over part or all of their lease, they are still required to get permission from the landlord. Landlords should not withhold consent if the request is reasonable. However, there may be some cases in which it may be wise to refuse consent. This includes for reasons such as overcrowding, or if the new tenant has a bad rental history.

Be advised that your tenant may still be able to apply to your state civil and administrative tribunal for an order to approve the sub-letting arrangement. Also, should tenants sublet without permission, landlords may give a 14 day Notice to Vacate and apply to have the tenants evicted. 

2. Record of agreement

It’s also worthwhile requiring that the head and sub-tenants draft out an agreement in black and white. Do include their share of the rent, duties and responsibilities. Having some rules in place will ensure clarity and help prevent disputes. 

3. Lodge Bond

Once the landlord has approved, the bond needs to be lodged reflecting the new arrangement. In Victoria, the head tenant is responsible and will need to notify Residential Tenancy Bond Authority (RTBA) of the changes. 

These are some general guidelines when it comes to understanding how co-tenancy and subletting works. As mentioned, it’s essential for landlords to know the benefits, risks, rights and responsibilities involved so that they can make the right decision for their property. 

However, if you’d like to know more, especially with regards to your specific situation, do speak to one of our agents today. 

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.

Convenience Is The Key…To This Sparkling One-Bedroom Apartment

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****DO TAKE NOTE THAT THE PROPERTY IS UNFURNISHED*********

Spacious, Bright and Fully Furnished 2 Bedroom Apartment

This immaculate and beautifully presented apartment is available to move-in immediately. Positioned centrally in the heart of the Education Precinct, this apartment is within a stone throw away to RMIT as well as walking distances to Melbourne University and Trinity College. The location is well complimented with easy access via the tram stop in front of the building and Melbourne Central Station located close by. There is also an endless option for shopping with Aldi Supermarket located below the building on the ground floor and Queen Victoria Market and Emporium within walking distances. On top of being in a great location, the apartment is fully furnished with both bedrooms having its own windows and built-in wardrobe. There is also an additional powder room adding to its convenience. The apartment also comes with 1 off-street parking, split system air conditioning and secure intercom access. Astute tenants will also have accessed to world class common amenities such as the tennis court, swimming pool, spa, sauna, bbq area, cinema room and concierge. With so much to offer, this apartment is an absolute must in your next open for inspection list. Contact us now to organise an inspection.

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