Although ‘upgraders’ once dominated the Australian house buyers market, there has been a rapidly growing trend over recent years for turning a home into an investment property and building a small yet strong portfolio.
For many, the obvious solution is to partner with a letting agent and property manager who are there to oversee the ins and outs of the rental process, but renting privately is also an option.
However, renting your investment property out privately isn’t quite as straightforward as simply finding a tenant and collecting rent payments. There are seven essential things to look out for to help everything go smoothly.
Is your property a sound investment opportunity? A letting agent can offer good advice, but when going down the private route, however, you’ll need to look out for key rentability factors to assess and analyse your property yourself.
One of the most vital factors is space, so if your home appears quite cluttered and ‘busy’, it may be worth using secure self storage units for some of your belongings. These units can also ensure that any valuable items you’re not taking with you remain safe throughout the tenancy.
2) Market Demand
When renting your property out privately, you’ll need to decide how much rent to charge your tenants. One of the best ways to do this is to look out for market indicators that can provide you with a good idea of how in-demand properties in your area are at the current time.
One important indicator is to look at average days on the market for rental properties similar to yours.
If rentals are being snapped up in days, you may be able to charge a higher-end rate, while a slow rental market may necessitate a lower rate.
3) Marketing Opportunities
Finding tenants is one of the most vital tasks you’ll need to prioritise when renting your home privately, but this can be quite challenging if you don’t look out for prominent marketing opportunities that ensure your property is visible to the right people, at the right time.
The good news is that many online platforms welcome listings from private landlords.
Look to promote your property on some of the most popular rental websites in Australia which have the most traffic, such as the rent.com.au site.
4) Tenant Ratings
It’s important to remember that interest in your property isn’t enough to make someone a good potential tenant.
If you’re very keen to get the ball rolling, it can be tempting to approve the first renter that demonstrates interest, but it’s essential to look out for red flags that could suggest that you may encounter difficulties down the line.
Red flags that should be looked into further include lack of employment, a bad credit rating, and poor references from employers or previous landlords.
5) Bond Legalities
One of the most important things of all to look out for is that you’re maintaining compliance with the legislation within your state.
Rental bonds especially are one to look out for, as each state has different regulations relating to the maximum that can be charged.
For example, a maximum of 4 weeks' rent can be taken in Queensland, Tasmania, ACT, and NT.
In Victoria, however, landlords can only legally request one week's rent as a bond where rent is less than $350 per week, with no bond limit for rates above that.
6) Insurance Small Print
Any online resource for new landlords will advise getting specialist landlord’s insurance which provides financial protection for rented properties.
It’s a good idea to apply for this when renting your home privately as you won’t have any cover through a letting agent or property manager.
However, what these resources don’t always mention is that it’s vital to look out for the small print, and understand that some cover, like accidental damage and malicious damage, is usually optional and not included as standard.
7) Digital Tools
Just because you’ve decided to rent your home out privately doesn’t mean that you have to do it alone. Every landlord should make sure they look out for efficient and effective digital tools that offer comprehensive support and guidance across a broad range of areas.
This should include aspects such as property analysis and market growth data reports, along with other advanced functionalities such as access to new investment opportunities should you wish to further grow your portfolio in the future.
The Benefits of Renting Your Home Out Privately
By choosing the ‘DIY’ route, you’ll not only save money, but you’ll also retain complete control over your home, right through from tenant selection to rental rates and beyond.
However, there are potential obstacles that can create difficulties, so it’s always a good idea to stay vigilant and look out for these seven things.
In doing so, you can significantly increase the chance of a successful and satisfactory rental.