FAQ's
Inspections
The lessor has the right to carry out routine inspections on the property no more than four times a year.
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Inspections must be at a reasonable hour and you should receive between seven and 14 days' notice.
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The lessor must attempt to negotiate a day and time that does not unduly inconvenience you before sending you the notice.
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The notice should specify the day of the entry and whether the entry will be before or after 12 noon.
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In the case of carrying out or inspecting necessary repairs, 72 hours’ written notice is required.
Pet Bonds
If the tenant is permitted to keep pets capable of carrying parasites which can affect humans, a pet bond may be charged. Lessors/agents must lodge the security bond as a single amount, specifying the amount taken as pet bond.
The amount a tenant can be charged for a pet bond depends on the type of lease agreement they have.
Residential tenancy
The pet bond must be no more than $260 unless the weekly rent is more than an amount set by regulation ($1200 per week as at 1 June 2011).
Long-stay tenancy in a residential park
A maximum amount of $100 may be charged for a pet bond.
Assistance dogs
Tenants must not be charged a pet bond for an assistance dog.
Using a Property Manager
Property managers who offer their services for a fee must be registered real estate sales representatives working for a licensed real estate agent who is in charge of the agency.
If you choose to use a property manager, carefully consider the person’s experience in property management. Ask about:
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their agency’s management portfolio and the types of properties it manages;
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the property manager’s own approach to managing your property; for example, the frequency of inspections, their manner in dealing with people and the level of fees they will charge.
Self Managing your Investment
Once you have decided to rent out a property, one of the first decisions you will need to make is whether to do all the property management yourself or employ a real estate agent to do it for you.
It needn't be all or nothing. You may employ an agent just to find your tenants and handle the bond details and then manage the property yourself; or you may just want an agent to collect the rent but do everything else yourself.
If you don't live near the property, then using an agent may be your best option. An agent may also be the best choice if the house has been your home. Sometimes it's hard to be objective when tenants don't keep the house exactly as you did, even though they may be considered good tenants by most people.
If you decide to 'do-it-yourself', look at renting out your property as running a small business and your tenants as your customers and make sure you are aware of both your rights and your responsibilities as a landlord.
Recent changes to tenancy laws have clarified your responsibilities in regard to the safety of the property:
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Owners and occupiers are both responsible for ensuring that a suitable enclosure is operational around a swimming pool or spa pool on the property. If a fence, wall, gate, window, door or other barrier around a swimming pool or spa pool is not in working order or does not comply with the Building Regulations 2012, As the lessor you will need to arrange repairs immediately. If delays occur, or you need more information, contact your local council.
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Loose cords or chains on blinds or curtains, which are not fixed out of reach, pose a strangulation risk for children. As the lessor you will need to make arrangements to make the window coverings safe. Product safety laws apply.
As with any other business, you must expect and plan for some losses or unforeseen expenses and also accept that others may not always be as careful about the use and care of your property as you are.
It is very important to maintain full insurance cover on the building and any furnishings. It may also be a good idea to take out rental protection insurance to cover any losses of rental income if, for example, the property becomes uninhabitable, your tenants do not pay the rent or there is a vacancy for some period.
Information provided on this site and in renting out your property will assist you if you do decide to manage your own rental property.
Rent to Buy option
Under a rent-to-buy scheme, the seller makes a rental agreement with the buyer at an above market rent rate. The buyer may only exercise the ‘option to buy’ at the end of the rental period if they can get the finance to pay the balance of the agreed purchase price and have complied with the terms of the contract.
The buyer will typically pay an initial ‘option to buy’ fee as well as ongoing option fees which are separate to the rental payments. Even though the ongoing option fees are supposed to reduce the balance of the purchase price they are not likely to be secured in a trust account.
This is a high-risk scheme for buyers because their name only goes on the title of the property when they have purchased the property outright. Some rent-to-buy contracts may indicate the buyer will lose all payments made and have no claim over the property if even a single payment is not made on time.
In addition to rent payments and a fee for the option to purchase, the contracts generally require buyers to pay for costs such as repairs and maintenance, council rates and insurance.
If the seller has a mortgage over the property and fails to keep up their own repayments, their lender may have the right to repossess the property.
A rent-to-buy scheme can also be a high risk for sellers because they are effectively locked into an extended settlement period during which the property may increase in value. Sellers remain legally responsible for the property until the property title is transferred. They may be in breach of tenancy laws if they rely on contracts provided by scheme promoters and they may have to find another buyer for the property if the renters cannot or choose not to buy it after the rental period. If the seller is using the payments to cover their mortgage, they could be left vulnerable if the buyer fails to pay their rent or other fees.
Fidelity guarantee protections offered to those who buy or sell through a licensed real estate agent are not available to those who participate in rent-to-buy schemes.
At property investment seminars, spruikers often encourage seminar attendees to establish rent-to-buy contracts with people unable to get mainstream finance. Be aware it is illegal to facilitate a real estate transaction between third parties without an appropriate licence.