How to Screen Potential Tenants For Your Rental Property
One of the important factors that influence the success of a rental property is finding the right occupant. With the right tenant, it is guaranteed that rent will be paid on time every time and the property will remain reasonably intact, save for normal wear and tear. With a bad tenant, the condition of the investment property is always uncertain.
With more and more people moving in and out of different Brisbane suburbs, if a property is well-marketed and presented, there’s no doubt it will attract various types of tenants. However, for self-managed landlords, finding the right tenant for their property can be tricky and challenging.
Any prospective tenant will put their best foot forward during the initial walk-through of the apartment. This makes it difficult to make an informed assessment during this brief interaction. There are no hard and fast rules when it comes to finding the best tenant. You can, however, do a thorough screening of each applicant before allowing them to sign a lease.
Here are some tips to help you sort the good from the bad, and give you a pleasant and profitable investment experience:
Get Relevant Information
The rental application is a series of questions that allows the landlord to know about the prospective tenant. To get the best results, the questions should cover financial, employment and personal information.
It is also important to gather lifestyle information. Is the applicant a pet owner? Do they work odd hours or away from home? Do they often get visitors that would stay in the property?
The information they provide in their rental application should give you an idea of whether or not they are the kind of tenant that you are willing to trust your property with.
Ask For References
Do at least three reference checks from past landlords when possible. Ask the landlords how long the applicant stayed at previous properties and their reason for leaving. Good tenants live in one property much longer, usually at least a year, and their property manager or landlord reference will be available or easily obtainable. Any discrepancy in the information provided implies that something is being kept secret by the applicant and would usually raise a flag.
Check a Tenancy Database
You can check if the applicant is included in any tenancy database, a record of personal information about tenants who have had issues with their tenancies. The database tells landlords or managers whether prospective tenants had a previous record of not paying rent or damaging the property.
Here are tenancy databases that landlords or managers can contact:
Tenancy Information Centre Australasia
National Tenancy Database
Trading Reference Australia
Interview the Applicant
Conduct an informal interview of applicants that have passed the initial background screening. You can do this either by phone or face to face during a walk-through of the property.
When showing the property, pay equal attention to “selling the property” and evaluating the prospective tenant. Ask questions that will help you determine if they meet your requirements for a tenant. Do they conduct themselves in the right manner? Do they look neat or unkempt? Do they smoke?
Consider Hiring a Property Manager
A property manager will take a lot of load off your back as a landlord. They will take over many responsibilities, including screening prospective tenants and managing the operations of your investment property. Unlike self-managed landlords, they have access to tenancy databases, individual public records, identity verification and credit history.
At the outset, make sure your property is properly presented and marketed in order to attract as many prospective tenants as possible. Having a large pool of applicants increases your chances of finding a long-term tenant.
First-Time Home Buyers: The Most Affordable Suburbs for You
Domain has released its First Home Buyers Report which reveals the Australian suburbs that are the most affordable for first home buyers.
The report, which covers all eight of Australia’s capital cities, takes grants and initiatives for first home buyers into consideration, and looks at the average median price that can considered to be affordable for first home buyers.
The most affordable area overall, according to Domain, is Greater Hobart which has the most affordable suburbs that are closest to a CBD.
The Greater Hobart area has the lowest entry price point for houses, with a median at $130,000 in Herdsman Cove, 22 kilometres away from the closest CBD, while the Greater Adelaide area has the best median price point for units.
“While Greater Adelaide is the most affordable region for first home buyers looking for units, with the median price in Rosewater – the most affordable suburb in Greater Adelaide – at $154,000,” Domain’s chief data scientist Nicola Powell said.
The report considers a suburb to be affordable if it is below the average home loan size over the same period per state or territory plus a 20 per cent deposit and additional grants.
The cheapest suburb for each capital city, as determined by Domain, are:
Houses – Gosford ($412,5000, 65km to nearest CBD)
Units – Ettalong Beach ($301,500, 51km to nearest CBD)
First home buyers in Sydney have access to the First Home – New Home scheme and a $10,000 First Home Owner Grant.
Under the First Home – New Home scheme, a new home valued at $550,000 or under are exempt from stamp duty. There are also concessions available for homes valued between $550,000 and $600,000.
The First Home Owner Grant is also available for purchases made on or after January 1 2016.
Houses – Millgrove ($295,000, 70km to nearest CBD)
Units – Albion ($225,000, 15km to nearest CBD)
First home buyers in Victoria have access to the First Home Owner Grant and stamp duty concessions.
The First Home Owner Grant is worth $10,000 for new homes valued under $750,000, with another $10,000 available for homes in regional Victoria, from 1 July 2017 to 30 June 2020.
Stamp duty concessions are eligible for both new and established homes valued at $600,000 or less up to a potential 50 per cent.
Houses – Brendale ($259,750, 20km to nearest CBD)
Units – Mount Warren Park ($183,500, 39km to nearest CBD)
First home buyers in Queensland have access to the First Home Buyers Grant and transfer duty concessions.
The First Home Owners’ Grant is valued at $20,000 for new and substantially renovated properties at $750,000 and below, but it is only available until 30 June 2017.
Transfer concessions are on a sliding scale, determined by the total amount of duty payable by the value of the purchased home and the concession rate minus the first buyer concession.
Houses – Not considered to be affordable.
Units – Hawker ($277,500, 11km to nearest CBD)
First home buyers in the ACT have access to the First Home Owner Grant, and stamp duty charges at concessional rates.
The First Home Owner Grant is valued at $7,000 for the purchase of new or substantially renovated homes priced below $750,000.
Stamp duty is also charged at a concessional rate for new or substantially renovated homes priced below $590,000. For homes priced below $590,000 and above $468,000, stamp duty is valued at $14.70 per $100 or part of $100 where the dutiable value exceeds $468,000. Homes priced at or below $468,000 have a $20 duty payment.
Homes – Medina ($250,000, 39km to nearest CBD)
Units – Orelia ($165,000, 39km to nearest CBD)
First home buyers in Western Australia have access to various grants, special rates for stamp duty and the Shared Home Ownership Scheme.
Concessions are available in the form of a $10,000 grant and a payment of an additional $5,000, the latter of which is only available until 30 June 2017. Eligibility for the grant is determined by the value and geographical location of the home.
Stamp duty is also charged at a special rate for first home buyers for homes valued below $530,000. Homes, both new and established, above $430,000 and below $530,000 will have duty imposed at the rate of $19.19 for every $100 or part of $100 with the dutiable value exceeding $430,000.
New and off-the-plan homes offered by Western Australia’s Housing Authority are also available to be purchased through the Shared Home Ownership Scheme, which gives first home buyers a SharedStart loan through government lending agent Keystart. This allows for just a $2,000 or a 2 per cent deposit, whichever is greater.
Houses – Elizabeth North ($176,500, 29km from CBD)
Units – Rosewater ($154,000, 12km from CBD)
First home buyers in South Australia have access to the First Home Owner Grant and off-the-plan concessions.
The First Home Owner Grant is currently valued at $15,000 for new and substantially renovated homes under $575,000.
First home buyers buying off-the-plan can also be potentially eligible for concessions on new apartments at or below $500,000.
Houses – Herdsmans Cove ($130,000, 22km from CBD)
Units – Claremont ($174,000, 14km from CBD)
First home buyers in Tasmania have access to the First Home Owner Grant, valued at $20,000 until 1 July 2017 for the construction or purchase of new homes, including off-the-plan. After 1 July, the First Home Owner Grant will be valued at $10,000.
Houses – Not considered to be affordable
Units – Millner ($331,500, 10km from CBD)
First home buyers in the Northern Territory have access to the First Home Owner Grant, First Home Owner Discount and the Household Goods Grant Scheme.
The First Home Owner Grant can be claimed for both new and established homes, valued at $26,000 for a new home and can be potentially available for established homes.
First home buyers purchasing established homes can access the First Home Owner Discount, removing stamp duty for homes below $500,000. Additionally, a $10,000 grant is available for first home buyers to renovate the home.
Also available for first home buyers purchasing or constructing a new home is the Household Goods Grant Scheme, which allows up to $2,000 claimable for new household goods.
Maintenance of your B&D garage door and opener is critical to ensuring its smooth, quiet, reliable operation, and in most cases is necessary to ensure your warranty remains valid.
COLORBOND AND COLOURED STEEL FINISH DOORS
Your coloured steel door has been pre-painted with a silicone modified polyester formulation, which is one of the best paint films available today. However good a product may be, all exposed surfaces require some attention to guard against corrosion and any other harmful atmospheric effects.
Washing the door with clean water and a cloth every 14 days is recommended. More frequent washing is advised in salty or industrial fallout areas.
Remember, when you think of cleaning your car… clean your door!
NOTE: DO NOT WASH THE AUTOMATIC OPENER, IT WILL VOID THE WARRANTY AND COULD CAUSE ELECTROCUTION.
Regular Maintenance Required
B&D recommends that you check the operation of your door at least every three to six months (more regularly in extreme environments or frequent use). The effort required to manually open and to manually close the door should be about the same (if door has an automatic opener, put into manual mode before testing door).
NOTE: IF CORRECT MAINTENANCE & SERVICING ARE NOT CARRIED OUT, WARRANTY MAY BE VOID.
(every 3-6 months)
(Rolling Doors) Clean the internal sections of the guide tracks with a cloth dampened with mineral turps or methylated spirits. Polish vigorously to achieve a smooth, dirt and moisture resistant surface, allowing the Nylofelt to glide more easily. DO NOT USE GREASE OR OIL ON THE GUIDE TRACKS.
(Sectional Doors) Should be cleaned as per rolling door instructions, but do not required polishing of the internal guide tracks.
(If fitted) Sparingly lubricate with an all purpose machine oil. Also lubricate wheel to axle bearings.
No lubrication is generally required, however silicon spray may be used if necessary.
(Where accessible). Wipe over with an oily rag.
Your lock does not require special maintenance, however if the key becomes stiff, a spray lubricant such as RP7 is recommended. Do not grease the lock.
Lubricate with Chain Lube.
Service & Repair
(If fitted). Check for wear through by rubbing. If there is fraying or signs of corrosion contact B&D or an approved B&D dealer. These cables are under extreme tension and should never be adjusted, except by B&D Doors or approved B&D Dealers.
Check all screws, nuts and bolts to ensure they are secure.
It is natural for springs to lose tension. Should the door become hard to operate or completely inoperative, contact your local B&D office, or call the B&D dealer who installed your door.
To keep your door running well, it is recommended that your door be serviced by an experienced technician, every 12 months or earlier if required. Contact B&D Doors for more advice on servicing.
The spring unit is under tension at all times and should never be adjusted, except by B&D Doors or approved B&D dealers. No operator or other person should ever stand directly in the path of the door in its downward travel or walk through doorway while door is moving. Always use the door handle to manually operate the door. If the door is now or later becomes automatically operated, the pull down rope on the door must be removed.
DO NOT PLACE YOUR FINGERS NEAR ANY MOVING PARTS OR BETWEEN THE DOOR PANELS WHEN THE DOOR IS OPERATING EITHER AUTOMATICALLY OR MANUALLY.
*Cedarpanel Woodoil Application Instructions:
To keep your B&D Cedarpanel door in optimal condition, WoodOil needs to be applied.
If you have an automatic opener fitted to your door it is important that you ensure the optimum operation of your door, otherwise you may reduce the effective life of the opener, and void your opener warranty. For more information refer to the maintenance schedule in your opener’s instruction handbook.
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.
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.
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