Property Investing FAQ's
How much rent can I receive for my property?
To determine how much rent you can charge for your property, you will need to assess the market rent - in other words, how much money similar properties in your area are renting for.
A good place to start is to carry out some research online. It is important to pay attention to the requested prices, as well as how long the properties stay on the market at those rates. Your local LJ Hooker property manager can provide you with plenty of useful information on comparative rentals in the area.
How long is a typical lease?
In Australia, standard lease periods are generally either 6 or 12 months. While longer lease terms are possible, you are likely to find a smaller number of tenants who are willing to commit to this time.
You may wish to speak to your LJ Hooker property manager about the different advantages of each lease length and help you determine how to maximise your return most effectively.
Can I increase the rent during the lease period?
During the term of the tenancy, rents cannot be increased. Unless there is a specific term written into the tenancy agreement at the commencement and at the time, the appropriate notification is given. Once the lease has expired, or is coming up to expiry or a new lease is being negotiated, it is the perfect time to discuss a rent review with your property investment manager. Keep in mind each state and territory has different legislation they must abide by, please speak to your property investment manager about your local legislation and requirements.
How much should I increase the rent by?
Different states and territories have different legislative obligation in the amount rent can be increased at any one time. Speak to your property investment manager about your current local rental approximation and discuss the gap with the current rent and what you can execute legally. A guideline to work with is, keep the rest a fraction below market opinion. That way you will maximise your return, while balancing the recognition of a good tenant - you don't want to lose a good tenant for a few dollars and then incur additional wear and tear on the Property when the tenant vacates, possible vacancy, any marketing and / or letting fees associated with re-tenanting the property.
Is it mandatory to enlist the services of a property manager to manage a rental property?
While you are not required to have a rental agent manage your rental property, it is important to know that private owners are bound by the same legislative requirements that also apply to real estate agents.
This means that if a private owner was found to be in breach of the Residential Tenancies Act, they could be subject to the same disciplinary action - including potential fines - that would apply to real estate agents.
Property Management Issues
Who is responsible for property security?
As the owner of the property, you are responsible for ensuring your property is secure and lockable - your tenants may not be able to insure their belongings unless window locks, deadlocks and other security measures are in place.
It is commonly recommended that locks are installed to ensure the safety of your tenants - safeguarding the contents of the property is the responsibility of all parties, including you as the property owner.
Who is responsible for carrying out property repairs?
Owners should arrange for repairs to be carried out by a qualified, licensed tradesperson. Your local LJ Hooker property manager can help you find someone in the area to carry out minor repairs - this is often a more affordable option than finding someone on your own.
While it is uncommon for tenants to request small repairs, such as replacing a light globe, you will want to ensure other repairs - such as replacing tap washers - are carried out as quickly as possible to avoid damage to the property.
What happens if a tenant requests maintenance, but is never home?
In this circumstance, owners may wish to write a letter to the tenant explaining the situation and giving clear notice of a new date and time for the repairs to be carried out. This note should also advice that the tradesperson will be given the keys to access the property at this time if the tenant is not present.
Enlisting the service of a professional property manager that liaises frequently with tradespeople - such as LJ Hooker - can help you, as there is often a reduced charge for a call-out if work cannot be completed.
What if your departing tenants claim to have lost the keys to the property?
All leases require that tenants return all keys to the property - including the ones originally given to them at the beginning of the tenancy - when they move out.
Tenants who have lost the keys they were provided are responsible for the cost of replacing them - this can be claimed from the bond. It is important to note, however, that tenants may dispute any claim on the bond by making an application to a tribunal. Property owners and their agents must ensure their paperwork is in order, including proof that the tenants were given keys at the beginning of their tenancy.
Can I charge the tenant for the cost of having the water and sewerage connected to the property?
It is the owner's responsibility to have utilities such as water and sewerage connected to the property.
However, in most areas of Australia, tenants can be charged for all or part of the water usage costs.
As these can vary depending on your region, you may wish to speak with your local LJ Hooker agent about the different ways you can manage and pay your rates notices.
Neighbours are complaining about the noise my tenants make. What should I do?
If you have received written advice from the strata managers of the building about the noise your tenants are making, this is a good opportunity to contact your tenant and let them know about their neighbours' concerns.
It is advisable to do this in writing, advising your tenant they are in breach of the terms of their lease. They should also be advised that due to the nature of strata buildings, any further noise complaints could result in a formal notice to vacate the property.
What if the cost of repairs to the property is higher than the bond?
If your vacating tenants have left your property needing repairs that cost more than the bond, you will need to apply for an order to recover the necessary amount needed to carry out the repairs.
Owners should ensure they have proof of the damages, as well as any relevant correspondence or conversations with the tenants.
Depending on your property and the type of damage that has occurred, you may be able to make a claim on your landlord protection insurance policy either before or after a tribunal hearing.