That Will Save You from Disaster
We’ve put together some tips when you’re renting your property to tenants.
Always ask prospective tenants for references and always call their referees. If you rely on your own assessment of prospective tenants, this can lead to problems down the track.
Referees may be reluctant to make negative comments about a colleague or friend. It is vital that you also carry out a credit check on prospective tenants. Most debt collecting agencies can conduct credit checks. You need to ensure you get the tenant’s permission first.
To name a few, the following should be undertaken:
- Background checks
- Social media
- Verification of ID
A professional property management company will undertake these and more on your behalf. Remember to get written permission from tenants first.
Outline Expectations in the Tenancy Agreement
The tenancy agreement is the place to outline what you expect from your tenants. It must clearly state if there are to be no pets, parties or smoking, the maximum number of occupants, and so on. Failure to make specific conditions clear can lead to dispute. If the matter goes to the Tenancy Tribunal, an unclear agreement puts you in a precarious position. Neither party can sign away their rights under the Residential Tenancies Act. Even if both parties agree to a clause at the time of signing a tenancy agreement, this clause may not be upheld if a dispute is taken to the Tenancy Tribunal.
Opt for a Fixed-Term Tenancy Over a Periodic Tenancy
You may find a good tenant who is going to pay the rent and look after your property. If you sign them up for a periodic tenancy instead of a fixed term tenancy, they could give 21 days’ notice and leave. This gives you very little time to find a new tenant, and it could cost you in lost rent.
A fixed term tenancy enables you to find new tenants before the current tenants move out. This could potentially save you thousands of dollars. It also enables you to protect against the property becoming vacant at a time of year when tenanting could be difficult, ie – November/December or mid-winter.
Take the Maximum Possible Bond
Many private landlords feel that no bond, or only two weeks bond is necessary. It’s very easy for a property to be damaged, which could leave the owner out of pocket. Tenants are given the right to live in an asset worth hundreds of thousands of dollars. It is advisable to insist on taking the maximum bond possible of four weeks.
Lodge the Bond with the Department of Building and Housing
Always lodge the bond. Not lodging the bond with the Department of Building and Housing is illegal. If a tenant takes you to the Tenancy Tribunal, could be a fine for you of up to $1,000. The actual amount is at the discretion of the adjudicator. You could lose many hours dealing with the tenants and attending the hearing.
Talk to Kerry Kirwan about Quinovic Parnell managing your rental property: