All you need to know when renting your first property
After making the decision it’s time to move out of home, there are some important things that you need to know.
What do I need to apply for my first rental property?
So, you’ve never rented before. But don’t worry, everyone must start somewhere. There are a few things that you can do to make this step a little easier.
Property Managers have a duty to ensure that you can afford the rent and that the property is the right one for you.
You will be required to provide verification of income and photo ID, along with proof of address and most likely personal references and professional referees.
In most newcomer’s circumstances, you may need to ask Mum, Dad or a relative, to go guarantor or co-sign the lease.
Talk to the property manager should you have any queries or concerns.
What happens when my application is approved?
Congratulations, your application is approved. There are several steps you will need to get through prior to being handed the keys. The first step will require you to sign documentation.
The Tenancy Agreement
Your Tenancy Agreement is an important document. It is a legal contract between you as the Tenant and the Lessor/Rental Agency.
By signing the lease agreement, you are legally committing to what is stated on the agreement, including any special terms which should be agreed to in advance.
Make sure you read and understand the agreement before signing and always keep a copy of it in a safe place.
The Bond Lodgement
In most states a rental bond is a compulsory requirement by the Lessor/Agent at the commencement of a tenancy agreement.
Your rental bond is lodged with the legislative Authorities and acts as security for the landlord or owner in case you don’t meet the terms of your lease agreement.
At the end of your agreement the bond amount will be refunded, however, if the property needs cleaning or repairs or if items need to be replaced the landlord or owner may claim some or all the bond.
The amount of the bond is specified in the Tenancy Agreement document.
What documents should I receive before moving in?
The documentation required to be given to you at the time of sign-up differs slightly from state to state, however, in most cases, the following should apply;
Information booklet relating to renting in your state or territory:
Copy of the General Tenancy Agreement
Copy of the bond lodgement form
Original and copies of the condition report – to be checked, completed and signed, then returned to the office in the required time frame
Receipt for initial rent amount, lease fees and bond
Photocopy of all keys and remote controls (if any)
Emergency contact details
What is an Entry Condition Report?
The Entry Condition Report is provided to the ingoing resident/lease holders at the beginning of their tenancy start date. This report outlines the condition of the property at the beginning of your Tenancy.
It is important that you carefully check the condition report and make sure it includes all existing damage or issues with the property. We suggest taking photos of the property before your move in and provide a copy of these photos to your agent / landlord as record of the properties original condition.
Legislation allows tenants a certain amount of days to check the details completed by the agent/owner on the condition report, to confirm or disagree with those details.
As the condition report, can be used as evidence if there is a dispute about who should pay for cleaning, damage or replacement of missing items at the end of the agreement –make sure you go through it thoroughly.
Make sure both you and the landlord/Agent agree on the contents of the condition report before signing it.
How do I prepare for a Routine Inspection?
Your landlord or real estate agent may carry out a periodic inspection of the property to ensure it is being well cared for and any routine repairs are made. This inspection may include the following:
The property is being maintained in a clean and tidy condition.
The grounds are being maintained in a clean and tidy condition.
The property is not being damaged in any way.
There are no more than the number of people specified on the tenancy agreement living at the property.
No pets are housed at the property, unless otherwise agreed to.
Any maintenance issues identified can be attended to.
There are minimum notice requirements to be given to a tenant prior to a scheduled routine. This will ensure that you have plenty of time to have a good tidy up beforehand.
Rental properties are considered water efficient if certain water fixtures meet the standards listed below.
The requirement for taps applies only to internal cold water taps that are installed over a hand basin, kitchen sink or laundry trough (including single mixer taps). The requirement does not apply to other taps in the property such as bath tub taps, outside taps for the garden, or taps which supply washing machines or dishwashers. These taps are not required to be water efficient.
Property managers/owners should be able to demonstrate the presence of water efficient fittings with a water compliance certificate, plumbers report or receipts.
If there is one thing an investment property owner doesn’t want to happen, it is to lose money on an investment. The intention of an investment property is always to increase income and wealth; however, sometimes things can go wrong and what starts out to be a dream of building a strong financial future becomes a nightmare that costs money.
A rental property can become an endless money pit for various reasons, such as repairs that were not foreseen or even damage to your property. Even worse can be bad tenants in the absence of reliable and succinct rental property managers to ensure all the workings of your investment are running smoothly.
Even if your property management is the best and the tenants are great, accidents can still occur either to your property or to people who are on your property. For the times when things do go wrong with incidents, accidents and more, the wise investment property owners makes sure they are covered by landlord insurance.
Why Landlord Insurance?
An investment property is a huge asset and one to be taken care of and protected. It is a business and should be treated as such. Landlord insurance will give astute property owners a sense of ease knowing that if something occurs or goes wrong, their hand won’t necessarily be reaching into their pockets. Depending on your insurer, the terms and conditions may vary. However, when expert property managers are selected, they should be able to put you in touch with a reliable insurer who can offer you the best asset protection.
Until then, set you mind to thinking that no investment property owner should be without landlord insurance. As the owner, whatever happens on the premises of your property could end up being seen to be your responsibility. This is particularly true if there is a carpet repair that should have been carried out on a stairway and the tenant trips and falls. Here you will probably be held legally liable, yet with the right cover you won’t end up having to pay for medical expenses, amongst others.
Don’t assume that if you are related to, or know the tenant, that these rules do not apply. It is a common tale that friends and relatives have become enemies when business transactions have gone wrong. If you are unsure of what landlord insurance covers, then you should get in touch with your property manager today to ensure that you receive sound advice and that you are pointed in the right direction.
If you would like more information on getting the best property management and the most thoroughly screened tenants for your investment, learn more about our property management in Brisbane. Our property partners will help with overseeing your luxury house, prestige home or executive rental property.
Firstly, you must know that the ‘Property Investment Advice’ industry is not regulated. It seems crazy that anybody can give you so called advice on investing in property without having any qualifications, a regulatory framework to adhere to or even experience for that matter. There is also no accountability for poor advice which has led the industry to breed some unscrupulous operators who sell their properties under the guise of property investment advice – the property shark.
The property shark can be quite easy to identify when you know what to look out for. They normally hold seminars that they fill through mass advertising campaigns. This is very expensive so you know that they are going to want to recoup those costs, as well as maximising a profit. The presenter is usually a smooth talker, hitting all of the psychological touch-points while delivering a generic property investing presentation. You know the one, “properties double in value every 7-10 years” and “you can’t go wrong with bricks and mortar” etc..
If only it was that simple and straight forward like they will have you believe, however not all properties double in value in that time-frame and you most certainly can go wrong with bricks and mortar if done incorrectly.
Then at the end of the seminar they will unveil their latest development which is a high-rise apartment building 3 years off plan which you get excited about because of the glitzy marketing material and that cool looking rooftop bar in the brochure. You could just imagine hanging out there with your friends having a great time and therefore your tenants will too. You will never be short of a tenant paying top dollar rent… or will you?
What They Will and Won’t Tell You
Will: Buy now at today’s price so that you can have an uplift in capital when the project is completed in 3 years.
Won’t: There is going to be 20,000 similar new apartments that are going to be coming onto the market within a few kilometre radius at the same time that will potentially dilute values significantly.
Won’t: Half the apartments in the project will be sold to foreign investors which could have inherent issues.
Won’t: A lot of lenders (banks) don’t have an appetite for high-rise apartments in areas of oversupply resulting in difficulty to finance when it is complete.
Will: This project has great facilities: lifts, gymnasium, rooftop entertaining area.
Won’t: There will be a body corporate bill of $8,000 per annum that will greatly affect your cash-flow budgeting.
Won’t: When the project is completed you will have 300 identical apartments coming onto the market at the same time meaning you can only compete on price to get tenants.
More Things to Look Out For
If a property shark is spending all this money to get a sale, they need a lot of people to buy. This means they need to have lots of properties to sell. They don’t necessarily care about how good of an investment it is, they just need a lot of them. That is why they will generally be promoting high density apartments or house and land options where there is no shortage/scarcity of land (because they can get the best terms….for themselves).
Another thing you need to look out for is whether the person/company that is giving you ‘property investment advice’ is also ‘selling’ you a property. Now be aware there is an important distinction between those ‘selling’ and those helping you ‘purchase’ (for example a Buyer’s Agent). The major factor is that one is working for the vendor and one is working for the investor. Once a person/company has an exclusive listing of a property to sell, they are legally and morally obligated to achieve the best outcome for the vendor. They have no obligation (and in a lot of cases consideration) about a good investment outcome for the investor.
If you are interviewing who you should take advice from in this unregulated industry, find out what their qualifications and experience are. Ask them if they have Professional Indemnity insurance to give property investment advice – this is rare in the industry. Find out if they have access to whole of market properties with no bias, as opposed to a limited stock-list that they have the exclusive listing.
There is no ‘one size fits all’ when it comes to property investing. Every investor has a unique situation with different goals, risk appetite and therefore requirements. A true Property Investment Advisor will take all of this into consideration when providing advice and developing a strategy.
About the Author
Nick Holden is the Founder of Simple Property Investment and an insured, qualified Property Investment Advisor under the ASPIRE Network industry body. He is a Licensed Real Estate Agent, holds a Diploma of Financial Services (Financial Planning) and Cert IV Financial Services (Finance and Mortgage Broking). As there is no ‘one size fits all’ with property investment, he is on a mission to help ordinary Australians create wealth for their futures with personalised strategies and advice.
Rentvesting: The Secret to Getting into the Property Market
A long-term renter and happy about it. Have you discovered the secret investing back door – Rentvesting?
There’s nothing more frustrating than to build a dream of owning your own home, get excited when you find a property you fell in love with, only to have your finance specialist utter those heartbreaking words – ‘You can’t afford it!’
Many are left feeling deflated and resigned to renting for the rest of their lives.
However, many others determined to get into the property market are not accepting no for an answer and have discovered a so-called secret back-door to getting into the property market.
It’s called Rentvesting.
Rentvesting is a scenario whereby you remain renting your place of residence and purchase an investment property instead.
Whilst this is not necessarily a solution for everyone, depending on your circumstances, this could be just the ticket you need to get into the property market sooner.
I’m not going to go through all the pros and cons of rentvesting in this article. You can find plenty of articles on this topic if you deem it one worthy of further research. You might also like to add some of your favourite Pro’s or Con’s in the comment below – I welcome your input and experiences. My intention is to introduce this concept to those who desperately want to own their home and have been turned away due to lack of finance affordability. In some cases, by literally a bee’s whisker! If you’re at a loss as to how you could ever own your own home, this could be the answer.
The Advantages of Rentvesting
Let’s look at a few reasons this could be for you…
It could get you into the market sooner. Maybe you have a decent deposit saved up yet, your finance specialist has said you still can’t afford your dream home. By re-jigging the numbers, you could remain renting and purchase a lower priced property receiving healthy rent. This could make all the difference to go from a decline to a bright green approval.
Live where you want to, in the nicest suburbs. Ok, so maybe the dream home is a bit out of your reach for now. Maybe you need to live close to the City for work and travel reasons. This enables you to be figuratively ‘living beyond your means’ without the price-tag. Still try to keep the costs down, you don’t want to over-commit yourself.
Live and purchase in two different States. Depending on your life-style choices, you might need to live in one State for work purposes but want to buy in another State, maybe because that’s where your family are and where you want to end up in the future or vice versa. Purchase prices and rents are vastly different in each State and in different regions. This can enable you to map out the perfect plan for your current and future situations.
Chase the higher rental yields. When buying an investment property many will tell you to buy without emotion and look at the numbers – you may never ever live there. If you’re happy living in the right suburb whilst renting, now you’re not limited to where you might buy as an investor. Your property expert will be more than excited to show you where the best rental returns are happening on their stock lists. By achieving top rental income, this could push your affordability over the line and start you on your journey as a property owner.
Property investors receive tax benefits. Now that you’re an investor, you are eligible for tax benefits such as depreciation, deductible interest, investment property expense deductions on your tax return. Make sure you engage an excellent accountant (if you haven’t already) so they can set you up to maximise your benefits – the difference can be thousands of dollars each year.
Drowning is the most common cause of traumatic death in children aged under five years in Queensland. Approximately five toddlers drown in Queensland swimming pools every year. Almost all swimming pool drownings are preventable.
As the temperature increases, so too does the need to find a cool spot in which to relax and escape the heat, especially for children.
Many parents look to small inflatable pools for this relief but there are several issues parents should be aware of before buying these pools. Unfortunately, every year at Christmas time, a number of lives are lost around Australia due to children drowning in small pools. Sometimes, people just aren’t aware that it only takes a small amount of water for a child to drown.
Portable pools and spas can pose a serious safety risk to young children. A number of child drownings in recent years have occurred in portable pools and spas. It is therefore important to consider the safety of young children around these pools.
If your portable pool or spa can hold more than 300 millimetres of water, has a volume of more than 2,000 litres or has a filtration system, the new laws apply to you. You will need to:
Obtain a certificate from a licensed building certifier stating that your pool complies with the pool safety standard, before filling the pool or spa with more than 300 millimetres of water.
Obtain a building approval.
Register your pool or spa.
If you are selling, buying or leasing your property with a pool or SPA, a safety certificate is required from a licensed pool safety inspector. Alternatively, the portable pool or spa can be removed.
Exclusions From the New Laws
Queensland’s pool safety laws do not apply to portable pools or spas that:
Cannot be filled with more than 300 millimetres of water.
Have a maximum volume of 2,000 litres.
Have no filtration system.
All three criteria above must be met to be excluded. Many models of portable pools sold at department stores and pool shops meet these criteria, but you should check before buying.
Morayfield – half way to the Sunshine Coast (a 1 hour drive from Wishart H.O.)
A big welcome to Shame and Pam Kelly from Narrabri NSW, who were referred to ARRIVE to manage their property in Morayfield, a 60-minute drive from Wishart HO. Rented for listed rental price within 7 days!
‘We would follow the ARRIVE team anywhere, regardless of where our property was located. We tried other local agents and they just didn’t do what they said they would do. We were a little skeptical at first about the distance, but Arrive proved that location no longer has any bearing. They rented our property within 7 days at a higher rent than the other agents had previously gotten us’. A big thanks to Karen and her team.
Long gone are the days where tenants walk into an Agency and ask for a Rental List, nor do they pay rent by cash and we continue to prove this time and time again for our owners.
At ARRIVE, we promote your home on the most prominent international and local accommodation websites. Our sophisticated contact management software enables us to effectively communicate with current and prospective residents looking for unique accommodation, either locally or overseas.
So, when it comes to showcasing a property, we will transport your home beyond geographical boundaries.
5 Top New Year’s Resolutions for Investment Property Owners
Treat it like a business
If you want to get the best possible returns on your investment, then you need to start treating like a business and not a hobby. Some tips below on how to become a business owner of your investment:
ATTEND THE PROPERTY
Best decisions can be made after eyeballing a property. While your property manager will usually send you photos and a report, there is nothing like being present and seeing firsthand the state of your property.
BUDGET FOR IMPROVEMENTS
Too many owner investors, don’t budget for maintenance let alone improvements to their property. Every business needs investment made into maintaining and future improvements
As any business, you need to know your worth. Get an annual Rental and Sales appraisal each year to keep track of how much your investment property is worth.
REVIEW OF FINANCING
You should review your loans at least once a year. If your broker or lender is not giving you the best possible interest rate, then it might be time to consider re financing.
You should also review your tax planning with your accountant twice yearly. Once at the beginning of the financial year, then halfway through. This allows you to plan and allow for any changes in your financial circumstances