On face value, renting out your home can seem like the fast track to a rich and comfortable future: simply place a deposit on a house and get someone else to pay it off – rinse and repeat… Our own personal monopoly game that we always end up winners. Unfortunately, as many investors can attest to, this philosophy can be flawed, particularly for the inexperienced.
The problems lay in the vagaries involved in real estate leasing. These include unreliable tenants who may vacate with rent in arrears or have caused extensive damage. Then there are the inevitable maintenance and repair issues and numerous trips to VCAT (The Victorian Civil and Administrative Tribunal) or other unforeseen hiccups, which can result in drains in the landlords’ finances and time.
Call in the experts
One of the biggest fallacies when leasing out a property is to think you can go it alone. Victorian residential tenancy laws are a complicated governing legislation which can’t be taken lightly. For only a small fee expert, qualified leasing agents offer streamlined property management in Melbourne, protecting your investment through:
- Comprehensive knowledge, understanding and enactment of leasing laws
- Drawing up and managing legal leasing contracts
- Carrying out regular property inspections
- Liaising between landlord and the tenant
- Managing maintenance and contractors
- Monitoring rental payments
- Advising landlords and tenants of their rights
- Scheduling and managing fire safety equipment inspections
- Attending VCAT hearings and enforcing rulings
Hardworking property management agencies pay for themselves many times over the life of a tenancy. They will have a thorough knowledge of the Residential Tenancies Act of Victoria and understand the rights and responsibilities of both the tenant and landlord.
One of their most crucial jobs is preventative, which begins with tenant screening. It is in an agent’s best interests to thoroughly research tenant references and they have access to valuable information which assists in identifying the best applicants. A smooth tenancy makes an agent’s life much easier and they will work hard to ensure they pick the most viable prospect for your property.
Excellent tenant = happy tenancy
The single most important factor in a successful tenancy is finding a conscientious, reliable tenant. Many first time landlords will list receiving a high rental yield as the primary objective when leasing out a property but the truth is, a good tenant is gold to an investor.
A dream tenant who fills the following profile, is worth far more than a few extra dollars each month. They will:
- Have a solid history of timely rental payments
- Maintain the property internally and externally
- Be reasonable in their expectations and happy to fix little issues themselves.
If you have a tenant who fits the above profile then you are extremely fortunate. Keep them happy by ensuring that maintenance issues are attended to in a timely manner and keep rental increases to a reasonable level.
To lure the best quality tenant, ensure the property offers:
- Well maintained fittings and decor throughout including:
○ Plumbing and electrical appliances
○ Window treatments where applicable
- An effective, functioning source of heating and cooling
- Low-maintenance landscaping and gardens
It’s not always about the money
It is not uncommon for properties to languish on the market for weeks, or even months, as landlords hold out for top dollar. This can be the epitome of false economy. Every week a property is empty means money lost to the landlord. Trust the leasing agents guide price. They will have real time experience with the market in your neighborhood.
The fact is, it is better to get $370 per week from a reliable tenant who pays regularly and keeps the property maintained, than to have tenants paying $400 sporadically or who are causing damage to the property.
According to a recent survey by the Australian Bureau of Statistics, around 30 percent of Australian households rent. This equates to a huge opportunity to investors entering the market who offer a well-maintained property and who are keen to look after their tenants.
The formula to real estate success is simple. By ensuring you have a comfortable, well-equipped property, a hardworking rental agent and a conscientious tenant, you can be well on your way to a lucrative and financially secure future.