My first investment property will be ready to rent out in 2 weeks. Wondering if i should just engage the local Rhyne & Horne to manage it or DIY. Visited them and they are happy to take on but gave me a list of things i have to pay for ( their fees ofcourse, landlord insurance, content insurance etc)…..so then what is their value add? All tips welcome.
Best way to rent out investment property
Blistering barnacles on 30/04/2017 - 21:09
Comments
Which agent did you use to purchase? Sometimes good to have the selling agent to lease it since they already know people that want similar properties (or, if not a new build, may have wanted to buy your property to live in it but didn't buy it but interesting in renting it from you)… Also, the agents can also use photos of the property taken during the sale process for the lease advertisements, saving some costs..
A big tip - often the agent's renting fees are negotiable.. no harm in trying!
If you have a lot of time and can easily find tenant then DIY is definitely cheaper.
However most people don't. Property manager on top of collecting the rent, also inspects the property (mine's quarterly), tells you what needs to be done etc and property manager can advert your property to their existing and past tenants, people walking in etc. We can only do it through Domain & realestate.com.
So overall there's plenty of benefits, mainly convenience and you could potentially save money loss from not being able to find tenants quickly.
When renting out, you definitely want landlord and depending the type of property building/content insurance. Firstly it's required by your mortgage provider for you to have them and also just in case tenant damages property, not paying rent etc, you may be covered (this may vary case by case).
You could consider Airbnb.
If you meant Raine and Horne, it is by far the worst rental experience out of the three real estate companies we had dealt with.
Our property manager is disorganized and unprofessional. We actually wrote the ads for her,doesn't reply to emails for more than 10 working days, when we chased her up she got her boss to call her and yelled at us.
We were more than furious and asked for a face to face discussion straight away with the boss and the property manager,both of them lied straight in our faces despite it was written down in black and white.I would not recommend them for this reason.
Sometimes the smaller agents can be better. They care more about keeping your business.
yep, a smaller agent is more likely to worry about their firms reputation. in the big firms you may get a pigeon property manager - one that sh!ts on everything and flies off to their next job.
Just pay the fees and write the losses off on tax and negotiate to the lower end of the below if you can. Unless you have plenty of free time and are very patient it is not worth DIY
Letting fee (3% to 5% annual rent)
includes
Provide estimate of potential rental income.
Provide marketing/advertising recommendations.
Recommend ways to maximise the property’s appeal to prospective tenants.
Arrange preparation/display of advertising on website(s).
Promote property to agent’s data base for prospective tenants.
Provide regular reports on prospective tenant interest.
Conduct property inspections with prospective tenants.
Check prospective tenant applications, including tenant database checks.
Submit tenant offers & recommendations.
Prepare property condition reports at start of lease.
Take pictures of property & include with condition report.
Prepare lease & arrange signing by landlord/agent & tenant.
Re-leasing to existing tenant in possessionManagement fee (4% to 6%)
Monitor, collect & account for rent.
Lodge bond/bond claim with RTBA Authority at beginning/end of tenancy.
Carry out periodic visual property inspection & report.
Notify breaches involving non-payment of rent/significant property damage/accidents.
Prepare & serve Residential Tenancies Act notices.
Representation at VCAT hearings, including necessary preparation work.
Engagement (as client’s agent) of professional/property services providers & tradespeople.
Monitor lease expiries & advise current rental trends.
Conduct rent reviews & report.
Liaise with tenants to arrange prospective tenant inspections.
Conduct final inspections at lease end including condition report & report to Client.
A periodic visual property inspection is carried out twice a year (every 6 months).Thanks thechemist! this is so helpful. Raine & Horne have asked for 2 weeks rent as letting fees.
This is pretty standard. Try to negotiate to one week but don't push the friendship too hard. They are accountable to their boss too.
Shop around, talk to people, and find a property manager that you feel comfortable with, that you can establish a relationship with. If anything goes wrong you NEED them on your side.
Do not rent out to ANYONE without landlords insurance.
What is the exact reason you ask to take a landlord insurance is it for public liability cover or something else?
To play DA since this is ozbargain after all.
Provide estimate of potential rental income.
Provide marketing/advertising recommendations.
Recommend ways to maximise the property’s appeal to prospective tenants.
Arrange preparation/display of advertising on website(s).
Promote property to agent’s data base for prospective tenants.
Provide regular reports on prospective tenant interest.5 min work on the web give you a rough idea of rental prices
Plenty of free advertising through gumtree or facebook.Conduct property inspections with prospective tenants.
Check prospective tenant applications, including tenant database checks.An hour showing some people around on a sat morning is not hard work.
Tenant databases are mostly useless in my experience and nothing beats meeting them face to face.Prepare property condition reports at start of lease.
Take pictures of property & include with condition report.
Prepare lease & arrange signing by landlord/agent & tenant.
Re-leasing to existing tenant in possessionDo this yourself (Most agents use this with a few modifications). Fair Trade site has most of the forms and guides you need. Pictures are super important and take 5 min with your cell to do.
Monitor, collect & account for rent.
Just use bank transfers
Lodge bond/bond claim with RTBA Authority at beginning/end of tenancy.
Super easy online form now. Get the tenants to do all the paperwork.
Carry out periodic visual property inspection & report.
Conduct final inspections at lease end including condition report & report to Client.
A periodic visual property inspection is carried out twice a year (every 6 months).I would want to do this yourself as you know your house better than an agent. An hour every 6 months is easy.
Notify breaches involving non-payment of rent/significant property damage/accidents.
Prepare & serve Residential Tenancies Act notices.
Representation at VCAT hearings, including necessary preparation work.Standard forms on Fair Trading site and if you need to serve notices or go to court you are better off getting a lawyer rather than an real estate agent.
Engagement (as client’s agent) of professional/property services providers & tradespeople.
Shouldnt be needed much if the place is new, but you know your house best and can shop around for a good tradie.
Monitor lease expiries & advise current rental trends.
Conduct rent reviews & report.
Liaise with tenants to arrange prospective tenant inspections.ah yeah the rent is trending and stripes are back in this season…
Seriously I have three places and have never had them unrented for more than two weeks. It takes around 10-15 hours a year per place to manage and is well worth learning even if you go through an agent. 10% would be over $10k/y for me. Get land lord insurance, be picky with tenants and enjoy being a land lord.
Hey Sparkles…this is a gold mine! Just the sort of input I was looking for!Thanks a ton.
Thanks everyone for all the great advise - really appreciate that. Just keep it coming. Just to add to the description, mine will be a brand new property & since there is a very good primary school, bus stop & shopping centre within 200 meters (railway stn is 750 meters), getting a tennant should not be that diificult. I will also look for a few more property managers.
Be super selective. With a brand new property, you want it kept that way. Speaking from experience, don't be talked into pets (or children).
Also if it's a brand new property you get special tax deduction for a few years (or at least you used to) so talk to your accountant. Also, get a quantity surveyors report done for deprecations deductions, might cost you around $500 but it's deductible and worth it. But as the others have said, do NOT lease it out yourself, use an agent and DO make sure you have proper landlords insurance in place.
thanks a ton
Use a property manager but shop around for the best deal.
Property managers should do a better job of checking the references of potential tenants and have access to databases which record tenants with a bad rental history.
thanks!
It doesn't cost anything to try DIY yourself if you have the time. And go to a real estate agent if you don't have time or need help.
Would you like to ask for an above average rent, or a similar rent to everyone else?
The last time I advertised for a tenant, I didn't even bother paying. Put up an ad on Gumtree. But I'm in a low vacancy area.
A real estate agent may charge you for advertising on both the big sites, realestate, domain and other fees.The real estate agent can check the bad tenants database. An unlicenced individual does not have access to look at or report anyone to this database.
Some times you may find a really good real estate agent who is close to the area. I had a previously one who was also involved with the running of the strata. But for most others, I find that they may advertise a similar place for rent for a different price and not have the time to contact you that the rent in the area has increased. You may have to check the prices once in a while.
During the tenancy. They'll inspect the property once a year, and give you an easy to enter tax document at the end of year. For a new place, not much repairs would need to be done. Unless something goes wrong, I usually don't have to do much.
Take pictures of every little corner. So if they break something or you claim insurance, you'll have some proof. This is also useful for when the property becomes available for rent again, you won't have to go an interrupt the current tenants for pictures. Ask for permission to take pictures during the inspections in case there's some minor thing that you hadn't spotted.
Whom ever sold you the new property should give you a capital allowance, capital works numbers that you can enter into your tax return.
Your state gov will usually have some info on how to do it…
http://www.fairtrading.nsw.gov.au/ftw/Tenants_and_home_owner…?Here's a condition report form for when you start the tenancy…
http://www.fairtrading.nsw.gov.au/pdfs/Tenants_and_home_owne…thats a wealth of information. thanks for sharing!
Hi all,
Is 5.5% of annual rent a reasonable fee for a Century 21 property manager?
It is my first time renting out a property so keen to hear everyones thoughts.
Thanks!
Get a property manager. Get them to look after rent and water (and rates if you wish), you do the rest yourself (insurance etc)