PREPARING THE HOME YOU LIVE IN TO BE RENTED TO THE BEST TENANT POSSIBLE

When you live in a home in Qld that you now plan to rent there are a few things you need to get organised. Some of this you can do yourself and some you can engage the help from the property manager you choose to engage.

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Here is a list to point you in the right direction.

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RENTAL APPRAISAL

Great place to start is to have an experienced property manager let you know what weekly rent might be achievable. These can be done remotely or in person. If you are busy, a remote appraisal is a good way to get a start. I do a fair few of these on the Sunshine Coast here in Qld and usually they are for homeowners that would like an idea of what’s possible within 24 hours as I can do them fairly quickly. Using information online about the property and then researching what similar properties in the area have been renting for I can give owners a fairly good idea of what weekly rental income to expect. I send them a report with comparable properties that have recently been leased and for how much.

When you get serious, nothing beats seeing a home in person to get an ideal of the space & how a home feels. When I do rental appraisals in person I only need to walk through the home for a few minutes but it’s the perfect time for an owner to sit down and ask all the questions they want about property management and how it all works.

We service the entire Sunshine Coast in Qld and our rental appraisals are a free service. So if you would like a rental appraisal, just reach out to me with what day and time best suits you.

CHOOSING A PROPERTY MANAGER

Choose a property manager early because they can assist and guide you along the way as you get closer to the date you need a tenant in place. There are a lot of pitfalls with choosing a property manager. What I can suggest is not to choose someone just because they are local. Look at google reviews. We service all suburbs on the Sunshine Coast Qld.

Most owners get caught up on comparing property managers fees. But they need to not worry too much about fees and engage a property manager that will get them the best return on investment. This is hard to work out though as many things impact how a good property manager will maximise an investor’s returns. From placing a good tenant, to ensuring the most rent is being paid, and ensuring the property is well looked after.

FEES

I find that owners get really focused on fees. A small savings on fees can often be wiped out if a poor tenant is placed or market rent is not achieved.

So it’s not about fees, it’s about return on investment .

A property rented for $600 PW with 5% fees the owner is netting $570 PW. If the same property is rented for $700 PW with 8% fees the owner is netting $644. While this is a hypothetical example. I see this all the time. Where properties are dramatically under rented and leases are not being renewed at market rent so the owner falls further and further behind on income they are missing out on.

I see this far too often. A property that is under rented with bad tenants in place. The owner assumed they were saving money with an agency with cheap fees but they also get poor tenants and lower rent.

Some agencies also have “hidden” fees like end of financial year statement fees & termination fees, monthly admin fees, lease renewal fees, etc.?So ensure you see a clear list of what their fees are.

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SIGN A FORM 6

This is the authority for your property manager to look after your property. My accountant has suggested that you can only start to claim tax deductions on your property that is currently being lived in by the owner once it’s ready to be rented and the easiest way to prove that is with a signed form 6. So do this first. Then anything you do after that is a tax decision for preparing the property for tenants. Obviously you should also seek your own independent advice.

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WATERWISE CERTIFICATE

If you get a certificate from a plumber that your home is water wise you can charge a portion of your water bill to the tenant. You really need to get this in place. If your house is not water wise the plumber you engage can change taps to ensure it is. I recommend?Jett Plumbing & Gas?on 0484 194 644. If you are in a strata complex you also need to ensure your property is separately metered as if it’s shared you can’t charge for water.

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GAS CERTIFICATE

If you have gas the same plumber above can get you an updated gas certificate which you also will need to meet legislation

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POOL CERTIFICATE

If you have a pool this will need to be in date so check its date. You can check your home address if your pool certificate is registered and current on this government site?here

If it’s expired we can recommend Colin on?0415713855?to give you an updated certificate.

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SMOKE ALARM COMPLIANCE

Legislation changed Jan 2022 so you might need new smoke alarms. But even if you have new alarms 30 days after the tenant moves in they need to be checked. We use?Coast Smoke Alarms?that charge about $119 annually to ensure all the alarms are working and compliant throughout the tenancy. Most of our clients just have us organise this for them. They charge from $119 per alarm if they need to be upgraded to the new legislation.

GARDEN CARE

If you plan to have the tenants look after the gardens it’s a good idea to get all the bushes cut back, all the weeds removed and even mulch put down, as this is how the tenant will be expected to maintain it.?

If you are having the gardens and lawns looked after for the tenant you need to get a quote from who will be doing this to ensure the cost is built into the rent. We use and recommend Emil on 0456 066 411.?Garden care can be a grey area so having this taken care of has its advantages.

MAKE SURE EVERYTHING WORKS

When a tenant moves in if something doesn’t work they will report it. So go around and test all the lights, locks and everything is working and in good order as it’s often easier to have it all sorted while you are still living at the property. We have access to great reliable value for money trades people if you need help with anything.

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PREVENTIVE MAINTENANCE

Does anything need to be done prior to the tenants moving in. Like a deck stained or a wall painted. Anything that can be done affordably now to prevent more maintenance in the future is a good idea.?

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SPEAK TO YOUR ACCOUNTANT

Depending on your personal structure you need to ensure you have things maximised for tax the best you can.

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ORGANISING MARKETING

Usually it’s best to have photography and a video done while your furniture is in place. This should be booked as soon as possible so it’s ready for when you go onto the market as sometime it can take time to get the photography done and ready, plus your property manager might be interested in organising other marketing like a floor plan.

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SOLAR PANELS

If you have solar panels, most owners allow tenants to move the electricity into the tenants name to benefit from the solar rebate. The only time electricity is kept in the owner’s name is if the rebate is huge and if the name was changed the owner would lose that large rebate.

You are allowed to keep the solar rebate and charge the tenant the full electricity bill but few landlords do this.?

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GAS BOTTLES

If you have gas, ensure they are both full for when the tenant moves in.

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WATER BILLS AND COUNCIL RATES

Most of our clients organise for these to come straight to us. We then pay them and the best part is it appears on the owner’s end of financial year’s statement so it’s easy to track. Some owners of course prefer to ensure these keep coming to them but sometimes they then forget to send them to us, or send them very late which creates tension with the tenants. These can be sent to?[email protected]?or PO Box 24, Palmwoods Q 4555

LANDLORD INSURANCE

While this covers for damage and loss of rent. The only time our agency has really needed it was because of pet wee. So get landlord insurance that covers pet damage but check how much they will cover. Terry Sheer is very good if a claim is ever needed.?Terri Sheer?are on?1800 804 016

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TAX DEPRECIATION REPORT

It’s a shock how many owners don’t get these. This report for around $500 will allow you to write off the decreasing value of the home every year. Most owners make the $500 back and more in the first year and the report can be used for years.?Summit QS?is great value on?1800 957 010

FINANCE

This is a big one. I have saved tens of thousands by reviewing my loans annually. This would be the perfect time for you to do the same. If you reach out to Paul on 0414 752 235, he’s an excellent finance broker who can look at your situation and advise if there is a better structure that will help with saving you interest and tax, Paul is very smart. A new structure now will also help you track when your property changed from a home to an investment

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CLEAN

It’s tempting to clean yourself. Ideally get a bond cleaner. A bond cleaner is different to a normal cleaner and will do a deep clean ready for when the tenants move in. Deb & Dave from Ocean Deep on 0430 059 653 or Jason on?0437679551.

I have lots of owners who want to clean, then when I check they’ve missed so many things like dirt in the window tracks, the ceiling of the ovens, dust on blinds or top of fans. The list goes on. It’s understandable after all it’s hard to realise exactly what’s expected.?

There is a very helpful article?here?that explains bond cleans in detail.

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CARPET

I’ve learnt not all carpet cleaners are the same. If you have carpet, get them cleaned ready for the tenants. Aaron on 0413 832 515 is very good. A tenant needs to return the carpets in the same condition less fair wear and tear so having them cleaned prior is a good place to start.

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PEST SPRAY

Legislation states that a property needs to be supplied to a tenant pest free. The best way to ensure that, is with a professional pest spray. A tenant needs to then keep it pest free so this is a great investment. Nambour pest are very good value on?54417090

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WHEN TO START ADVERTISING?

With most properties on the Sunshine Coast 4 weeks prior to a lease start date is a good idea. Interestingly the closer you get to a lease start date the more inquiries come through from people who need to move immediately. If you go to the market too soon, then enquiry will be low as people just don’t look that far

HOW TO AVOID GETTING A BAD TENANT

When I speak to new landlords their biggest fear is what if they get a bad tenant and the home is trashed. It’s a valid concern. I take over a fair few properties where the tenants have not been ideal. I’m not really sure how tenants like this get approved into a home, but they do.

With us we are very careful who we approve into the properties we manage. We’ve realised being super careful on tenant selection it makes our jobs as property managers much easier.

So for owners who choose to engage us as property managers, tenant selection is something they really don’t need to worry about.

WHAT ELSE DO TENANTS WANT?

Tenants here on the Sunshine Coast have some things they expect. By adding these or updating them it will help increase the rent & attract better quality tenants. I’m not saying you must have these, just that it all helps.

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FANS IN ALL ROOMS

Tenants now expect fans in all bedrooms and ideally in the living spaces too. If you already have fans check that all the speeds work as it’s common for the switch to fail so the fan will not work on its fastest speed.

FLY SCREENS

Fry screens on most windows, especially bedrooms & living spaces will allow tenants to keep windows open for fresh air throughout the year.

AIR CON

At least one really large air con in the main living, but ideally also a small one in the main bedroom. I have an investment in Buderim with two living zones and two large air conditioners. These are enough to filter into the bedrooms just enough to keep them cool.

DISHWASHER

If your kitchen has no space. Consider having a handyman make one. People’s lives are so busy and rents are so much more these days it’s just expected & really appreciated.

WHAT LOOKS TIRED?

Does anything look really tired or dated? It’s possible you may have really old fans, or even old lights that are rusting or dated. I’ve seen owners do fast cost effective updates like new fans and lights that can really give a home a more modern feel and help maximise the rent.?

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TAX DEDUCTIONS

Everything you spend is a tax deduction. It’s either maintenance or improvements and can be dedicated against your tax in some way. It’s important to check in with your accountant to ensure you’ve got everything structured correctly. Starting with getting a form 6 signed with your property manager first . But also don’t forget about investing in a tax depreciation report. You can even get these done 6 months after the tenant has moved in and back date it.

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SHOULD YOU PAINT INSIDE?

Fresh paint is the biggest bang for your buck. It totally transfers the look and gives a home a light fresh feel. So should you spend the money? First, think of it as an investment. It will raise the rent & get a better tenant. Painting inside will cost anywhere from $4,000 to $10,000. Usually a crew will come and paint the entire home within a few days.?

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SHOULD YOU REPLACE THE CARPETS

Carpets last about 10 years. We rent properties where the carpets are over 20 years old. Yes they are really worn & yes this affects the rental income and quality of tenants. Cost for carpet is around $3,000 to $10,000 depending on the size of the home. If your carpets are incredibly worn you might be able to still get away with it and maybe they just need a good clean.?

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CONSIDERING PETS

Almost all our applicants these days have pets. Soon in Qld it will become very hard not to allow tenants to have pets. Currently we advertise all our properties as “pets on application”, which allows everyone to apply and the landlord has the final decision who they choose.?

As pets become harder to not allow landlords need to consider pet proofing their properties so having vinyl planking or tiles instead of carpet.

While we have had very few issues with pets, the only time our current landlords have needed to use landlord insurance was due to the smell of pet urine in carpets which can never be removed unless it’s replaced.?

ENTRY CONDITION REPORT

About 1 or 2 days prior to the lease start date we do a detailed entry condition report. We take hundreds of photos and document the condition of the property everywhere. This report is then given to the tenant to check and make additional notes if we’ve missed anything.?

The entry condition report is extremely important as it’s a guide on how the property needs to be returned less fair wear and tear.

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KEYS

The tenant will need to be supplied a set of keys for every lease holder. So if it’s 2 adults and 2 kids we need to supply them 2 sets of keys. Plus the agency needs a set too. Bunnings cut keys but do a terrible job. So go somewhere like Mr Minute or a professional locksmith.

TENANT SELECTION

Many agencies send the owner a selection of tenants to choose from. We don’t do that. We usually send our owners the 1 application we feel would be suitable then if they have concerns or questions we can send more.?

I assume agencies send the owner a selection so when the owner chooses one it takes the responsibility off the property manager. If things go bad.?I personally can’t see how an owner could choose the best tenant by looking at a summary of several and choosing one.?

Most of our landlords trust that we’ve done our due diligence and the applicant we are suggesting will be ideal. If it’s not, it’s really on us to sort it out, which is also why we are very careful with our tenant selection process.?

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LEASE & DEPOSITS

Once a tenant is chosen we send them a lease to sign and ask them to pay 6 weeks rent into our trust account. 4 week is for the bond we send to the RTA and the other is for the first 2 weeks rent.

At the time of writing this article I am finding tenants are applying for multiple properties and good tenants are being approved on multiple properties so I have now been caught out a few times where the tenant takes ages to get back to us to explain they’ve changed their mind and signed a lease on a different property. Because of this we keep running the ad until the lease is signed and deposit paid.?

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TENANTS PAYING 2 WEEKS IN ADVANCE

Many people think a tenant needs to pay 2 weeks in advance. They do to secure the property but legislation states that they only have to pay the rent up to date which is calculated daily.?So once they have paid the initial 2 weeks in advance they don’t need to continue to pay in advance. Usually then they revert to paying about a week in advance, to ensure they don’t fall into arrears.?

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PAYING OUR LANDLORDS WEEKLY

Yes we are one of the few agencies that pay our landlords weekly every Friday. It’s a lot of work for us but we figure the money is no good to anyone in our trust account. So weekly, every Friday we dispatch any trust money to all our landlords.?

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ROUTINE INSPECTIONS

We do the first routine inspection 6 weeks after the tenant has moved in. Then every 12 weeks after that. These include photos and some small notes. Once we jump in the car our landlords get an email with a link to the report. If we see anything of concern we have a follow up process with the tenants to ensure they understand what we expect from them.?

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CAN YOU RENT THE PROPERTY JUST HOW IT IS?

Above is a lot to take in. But sure you can just move out and do the very basics to cover legislation. So the basics are;?

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Smoke Alarm compliance

Gas Certificate

Pool Certificate

Clean

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I hope this has given you an idea of the process and a few things to think about. If you live in the Sunshine coast and looking to rent the home you live in now, get in touch I’d be delighted to hear from you.?