Deciding to use your property as a rental investment can be a big decision and not something that you should jump
into without understanding all the facts.
There have been many disappointed property owners over the years who failed simply because they did not have a full understanding of the obligations as a landlord when renting out their property.
There are many aspects to consider, ranging from your legislative requirements, property and landlords insurance, preventative maintenance, tenant management and risk mitigation to name a few.
We agree that there are many businesses out there that appear to do little more than collect the rent and make the odd maintenance call on your behalf. At JKL this is not what we are about. We exist as experts in our field with the purpose of providing our landlords with a complete management service for the life of their investment.
Listed below are a few things to consider before deciding to put your home on the market as a rental property.
A landlord’s legislative obligations are often the most overlooked or misunderstood requirement that people forget about when making the decision to rent out a property. The list of obligations is very in depth and covers many aspects from property compliance such as fence and boundary requirements, smoke detectors, security, water metering and property up keep, all the way through to understanding contract and consumer law. Phew!
When selecting an agency to manage your investment, it is always a good idea to ensure that they are highly skilled in interpreting the relevant legislation to enable them to provide you with correct and accurate advice that aligns with your obligations as a landlord.
Just like the agreement that is put in place between the landlord and the managing agency. The tenancy agreement between the landlord and Tenant is also a legally binding contract. The terms in the contract should be well read and understood by both parties to ensure compliance and avoidance of conflict throughout the agreement period. A good agency should take the time to explain your obligations under the agreement as a landlord.
Many agencies only consider the rental amount payable when discussing rental return with landlords. A promise of a high rent with a low management fee is often the approach used to win a landlord’s business. Whilst this is a valid point and is often appealing, it only makes up a portion of what should be considered when discussing rental return. Other factors include quality of approved tenants and how they care for the property, vacancy periods, length and frequency of tenancy agreements, periodic rental reviews, advertising and marketing costs, preventative and scheduled maintenance, wear and tear on the property, sale market trends and many other considerations.
Choosing the ideal tenant or tenants requires consideration of many facets. Not only do you need to consider the tenants financial ability to make the required rental payments but also the tenants intended use of the property, number of occupants and their rental history. JKL have access to tenant databases records that allow them to view the history of tenants if they have defaulted on rent or damaged a property in the past.
Care, Maintenance and Repair
At a glance maintenance can easily be misunderstood as a mundane, low stress task that a property management agency can coordinate for a landlord. Some landlords even contemplate the idea of doing the maintenance themselves or using their handyman friend or builder as opposed to the agencies preferred suppliers.
Surely its not that complicated or time consuming, right? Guess again, it is.
The things to consider with maintenance and repairs, that are often not understood are:
- Determining reasonable time frames for repairs
- Understanding what is and urgent or non urgent repair
- Determining the difference between wear and tear and damage in line with legislation
- Calculating the depreciated value of an item for replacement when charging a tenant
- The Landlords Contractual Obligations in line with the tenancy agreement
- The Landlords Legislative requirements in line with the act and consumer law.
- Safety, Quality and Liability issues with alternate or non-qualified repairers.
- Insurance liabilities
Representation at Tribunal
In simple terms, tribunal is the dispute resolution process that is used to resolve property related matters in a similar fashion to the court process for criminal and consumer law. It is often suggested to a person during the court process that they seek specialist legal advice before appearing in front of a magistrate. This specialist is commonly a lawyer or solicitor would have an in-depth knowledge of the relevant legislation surrounding the case to be heard and provide the person with advice and guidance in regard to the case. The recommendation to a landlord attending tribunal for a property or tenancy related matter is the same. A landlord should seek the expert advice from an industry expert such as a skilled property management agency who can professionally compile their case and represent them at tribunal. JKL offer a tribunal advisory and attendance service that can be discussed when entering into a management agreement.