Owning an investment property can be a great way to bring in extra income, but it’s not something you can set and forget.
There are many rules, regulations and responsibilities you need to stick to as a landlord, often before you even think about getting a tenant into the property. Our property management team have created a checklist of things to take care of for Hunter region investment properties.
#1: Safety and security
As a landlord, it’s your responsibility to make sure your property is safe and secure for your tenants, so there are a few different laws to be aware of. These regulations tell you what you need to install in the property before anyone moves in, what information you need to give tenants and how to maintain everything on an ongoing basis.
The main areas to take care of are:
Smoke alarms, which need to be installed on every storey (typically in the hallway outside a bedroom). If your alarms have replaceable batteries, you need to put in a new at the start of a tenancy. Once installed, it’s up to your tenant to test the alarm yearly.
Swimming pools, including making sure your fencing is compliant, registering your pool with the NSW Swimming Pool Register and getting a compliance certificate, which will be attached to the tenancy agreement.
Providing and maintaining locks on the doors and windows to keep the property “reasonably secure” – Tenants NSW has good information on what counts as reasonable security
Landlords also need to consider safety on rural properties and around farm dams, which can lead to drowning – check the Farmsafe website for more information.
A professional property manager know the laws and can help you on top of your responsibilities without any stress.
#2: Maintenance, repairs and cleanliness
Tenants have a right to live in a home that’s clean and well-kept, so you have a responsibility to make sure the property is in good condition before they move in, as well as taking care of any maintenance issues throughout the tenancy.
If you had another tenant in the property, they should have completed a thorough clean when moving out and any maintenance and repairs should be finalised before the new tenant moves in.
To keep a record of damages or other issues, you need to fill out a condition report prior to your tenants moving in. They’ll then complete their own version in case anything has been missed.
If anything needs repairing during the tenancy, it’s your responsibility to take care of it. Repairs classed as “urgent” need to be fixed as soon as possible. Repairs, maintenance and damage are a normal part of any tenancy but can bring tough conversations and are a major source of headaches for landlords and tenants. For more information on repairs and disputes, check the NSW Fair Trading website.
An experienced property manager can keep on top of condition reports, help you find tradespeople, set up a time to get the work done and build a good relationship with your tenant to make sure budding problems are dealt with as soon as possible.
#3: Finding a tenant
When you’re looking for tenants, landlords are responsible for ensuring the property is marketed responsibly and that there’s no discrimination at play when selecting your tenant. This isn’t always easy if you are emotionally and financially invested in the success of a property, so working with a property manager is a good way to make sure everything is in line with the law, and you’re up to date with fair trading laws, direct and indirect discrimination and good practices.
#4: Starting a tenancy
There are several things you need to give your tenants at the start of the tenancy to meet your legal obligations and make sure they have all the information they need. This includes:
A copy of the New Tenant Checklist
A copy of the lease to be signed
Two copies of the condition report (one you filled in and one for them)
An invitation to lodge the bond online, or a lodgement form to sign
Any extra information that might apply, like a pool compliance certificate or a copy of the by-laws if the property is in a strata complex (like most units and townhouses are)
It’s up to the landlord to pay any costs to prepare the lease (also known as the tenancy agreement). If you don’t meet all of these requirements, you might also have to pay a fine, so it’s usually worth working with a property manager who’ll have everything under control.
#5: Financial rights and obligations
Landlords are responsible for paying levies, taxes and insurance on the property, though tenants need to take out their own policy if they want to cover their contents. You do have a right to charge your tenant for water usage, as long as the property has its own meter and meets water efficiency standards.
Landlords should also exercise their right to take a bond from your tenant before they move in, which can be used to pay for any repairs or cleaning needed because the tenant hasn’t held up their end of the agreement. The bond can’t be more than four weeks’ rent and it has to be lodged with Fair Trading NSW. Your property manager can handle this on your behalf.
New to investment properties or just need some help managing one? Our friendly team of professionals is here for you.