By: Vivi Octaviani
Firstly, congratulations on being a landlord (Residential Rental Provider) or thinking of being a landlord, great investment choice! It’s one thing to own an investment property, yet it is another thing to manage it. Whether you’re taking on the challenge of becoming a DIY Landlord or employing a professional property manager, you are obligated to provide prompt communication in addressing issues and being reliable for your renters.
Can You Be The DIY Landlord?
First and foremost, you need to ask yourself if you have the right personality and the ability to maintain business relationships with your future renter. Renters always have the possibility of causing damages, late payments, or lease breaks (termination) without proper notice and action. With those things in mind, a DIY Landlord has to be ready to deal with difficult legal issues, whilst ensuring to not get emotionally involved.
Educate Yourself
You can get yourself ready by completing a short course in property management for Victoria or wherever your property is located in order to understand the relevant Acts and legislation, legal agreements, documents and forms. It is common for issues involving rental payments and bond claims to go to courts and tribunals. You will need to know the right steps in providing records as evidence for the VCAT member to decide.
Rent Collection
Another important task in property management is collecting rent. When you’re a DIY Landlord, try to organise a direct debit, don’t just drop by your property to collect payment and avoid instalments. When the rent is not paid in full at the agreed date every month, you have to send the renter a written reminder notice. In Victoria, formal proceedings can start on the 15th day from the agreed date.
Advertising and Getting The Right Renter
When your property is vacant, you will need to think about advertising. Advertising is very important to attract as many future renters as possible. The more applications you get, the greater your chance to have the perfect renter. It is highly recommended to advertise your property on the two major real estate websites, realestate.com.au and domain.com.au for your maximum exposure. You can also advertise on more low-key platforms such as Facebook Marketplace and Gumtree.
When you start receiving enquiries, you need to be as professional as possible to make the applicants comfortable to rent from a DIY Landlord. Screen your prospective renters by interviewing them in person; ask questions such as why they left the last rental, will any pets be on the property, how many occupants will be in the application, what they do for a living, and get them to provide references. It is important for you to call the previous landlords or agents and check the tenant registers in Victoria to ensure they have a good reputation.
After you are comfortable with the applicant, book a time to sign the lease agreement, along with bond payment and proceed with the appropriate bond authorities. Set up the move-in day with an in-going inspections and keys handover.
Routine Inspection
The first inspection should be conducted around three months after the move-in date and every six to 12 months thereafter. You must adhere to the Victorian legislation in the inspection frequency, notification, entry and documentation. It is highly recommended that you keep all detailed records of the inspection, especially photographs.
Rent Increases
DIY Landlords need to be aware of the growth and latest developments in the investment property area to be able to appraise your rate properly. If you decide to increase the rent, make sure this is in line with Victorian terms of lease and legislation. The local property managers provide this important service in determining the market rent for your property. With their local market knowledge, they are able to maximise your property potential and what it can achieve.
Maintenance and Repairs
Sooner or later your investment property will need repairs and maintenance. DIY Landlords need to understand tenant rights on this matter. It is highly recommended that you have a range of tradespeople who can do reliable work in a timely fashion and as cost-effective as possible. One of the many advantages of hiring a property manager is that they have numerous trusted trades in their network. They can compare the quality and cost, and could possibly save you lots of money.
Other Important Things to Consider
Do you really have available time and the right administration technology on hand? A DIY Landlord always needs to be ready for any concerns that arise from renters and deal with situations promptly. Some things can be quite complicated and time-consuming if you are unsure of how to address them.
Administration can also overwhelm you if you aren’t used to detailing revenue and expenses towards the EOFY. A DIY Landlord’s goal is to save money, but if you employ a professional property manager the costs are tax deductible and will reduce your taxable income, so it might be worth the costs!
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