If you’re a people-person and enjoy research and organisation, then managing your own investment property may suit you. But, remember you’ll need to interview potential tenants, negotiate terms and understand tenancy laws. While this may sound complicated, it’s actually relatively straightforward. Let’s take a look at these seven easy-to-follow tips on managing your own investment property.
#1 Setting the Rent
Before you rent your investment property, you need to set a competitive weekly rent. Otherwise, you’ll find it difficult to find a tenant.
How do I set my investment property rent?
- Visit well known real estate sites.
- Click on the rent’ tab.
- Type in your suburb.
- Compare your property to others that are similar.
- Copy and paste similar listings into a Word document or create a spreadsheet so you can compare these. If you don’t know how to use these programs, then print out listings or jot them down.
- Review your information and then set your rental fee based on your findings.
- Remember you can always reduce your rental fee if you don’t get any interest after a week or two. So, setting it higher can be an effective way to measure the market.
#2 Marketing the Property
For a tenant to find your investment property, you’ll need to advertise. There are several ways to get your property out there; some are free while others incur a fee.
How do I advertise my investment property?
- Directory listing websites – Gumtree and Rent.com.au. The Rent.com.au site offers a package where you can, for a fee, advertise your property on Realestate.com.au and Domain.com.au. You also have access to TICA, the tenant database, to ensure your prospective tenant isn’t blacklisted.
- Local papers – Opt to advertise in newspapers that have cheaper rates for longer ad placement.
- Shopping centre notice boards – A simple and often effective method that can attract many locals to look at your property.
- On-site signage – Have a sign writer create a For Let’ sign with your contact mobile number on it or create a professional one yourself. Then place this out the front of the property.
What should I put in my investment property ad?
- Property benefits, features, and fixtures and fittings.
- Weekly rental cost.
- The number of bedrooms and bathrooms.
- Parking and transport options.
- The proximity to amenities.
- Lifestyle options – outdoor entertaining, land size, views, etc.
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#3 Selecting a Tenant
Finding the right tenant is a simple process. Create a tenancy application form in Word and print this out.
What should the tenancy application include?
- The property details, including weekly rent and bond.
- Personal applicant details.
- Residential history.
- Employment history.
- Income details.
- Any references.
- 100-points of identification.
If you need a template, then type Australian rental application form’ into a search engine. There are several options, and many are free.
What do I need to check when an applicant applies?
- Always check identification and make sure this person is the one who will be living in your property.
- Contact employers and verify rates of pay or ask for a statement of income. You want reassurance that the person applying for your property can afford the weekly rent.
- Review any criminal background. You don’t want your property used for illicit purposes.
- Check references. Phone anyone listed on the application, so you can get to know the person applying for your property a little better.
#4 Understanding Laws
Many tenancy laws apply in each state. As a property manager, you must abide by these rules always. If you’re not sure of these, then look up the tenancy act for your state. Then, read these and familiarise yourself with the law.
What are the basics of these laws?
- You and your tenant should sign a standard residential tenancy agreement.
- Both you and the tenant should sign a property condition report.
- Lodge the bond with the state tenancy body in the time specified.
- Give the tenant rent receipts and keep a duplicate.
- If rent is late, issue a reminder.
All forms needed for managing your own investment property are downloadable from your state tenancy office. Often, forms include a lease agreement, property condition report, rent increase notice and more. You’ll also find these sites a wealth of information, especially in relation to tenancy laws and dispute resolution.
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#5 Keeping Paperwork
It’s important to keep good records. Subsequently, keep all receipts, rent, property maintenance and any other costs. Always keep records up-to-date for taxation purposes.
What records do I need to keep for my investment property?
- Weekly rent payments.
- Any property maintenance receipts.
- Arrange for a quantity surveyor to carry out a depreciation report.
#6 Increasing Rent
When your tenant first moves in, they’ll pay the rent set by you. This rent is valid for the term of the tenancy agreement – 6 or 12-months. Any rental increases after this time must be fair and reasonable.
How do I increase the investment property rent?
- Wait until 6-weeks before the tenancy agreement comes up for renewal.
- Research the market and compare yours to similar properties.
- Marginally increase the weekly rental rate to match inflation.
- Write this new figure in the tenancy agreement.
Under leasing laws, you can conduct property inspections every three months. Before visiting a tenant though you must give them 7-days written notice.
What are the benefits of inspections?
- The tenant keeps the property well maintained.
- You can see the building’s condition.
- You’re able to discuss repairs and property changes.
Are you ready to start managing your own investment property and looking to make a purchase? If you said yes, then contact eChoice – our brokers have access to 100’s of products and can help you find a competitive mortgage to meet your individual needs.