Time to read: 5 mins
So you’ve decided to rent out your property, but what is the process and the best way get your home on the rental market.
Renting out your home can be a great way to build a passive income, while also servicing the mortgage, or it could allow you to purchase and move into a new home while holding onto your biggest asset.
Get Your Home Ready
The goal is to find a quality tenant who will pay on time and treat your property as their own, which is why presenting your home at its best is crucial.
The better you present your home the more rent you can charge, so even if there are costs up front to get it ready, the investment will pay off in the long term.
Make sure your home is:
- Well maintained. If something is broken, get it fixed. Also take the time to touch up paint, replace seals in the bathroom and kitchen, and fly screens in windows and doors.
- Clean, or better yet, hire professionals to give everything a thorough clean from the walls to the windows, the carpets to the oven.
- Landscaping. Your outdoor areas don’t need to be perfect but make sure the lawn and garden beds are tidy. Choose low maintenance plants and trees if possible to ensure everything survives, even with a little neglect from uninterested tenants.
- Decide what you are leaving. Will you include appliances such as an oven, microwave, dishwasher, or any furniture?
Find an Agent
Once your home is ready, it is time to find the right real estate agent. It is the agent’s job to manage the business of renting the property, as well as represent the owner when communicating with the tenants – which is why it is crucial you find someone you trust.
Approach your search like an interview and take the time to meet and speak with a number of agencies before deciding who to sign up with.
An agent will take care of many of the details, and also offer advice based on their experience. They will:
- Advise on the local markets and rent expectations
- Find a tenant, and check all applicants
- Take care of the paperwork such as the tenancy agreement and bond
- Collect rent and follow up late payments
- Conduct regular house inspections
- Represent you in the case of any disputes with tenants
Most agents take their fee as a percentage of your monthly rent, however some agencies charge a flat fee for their time.
Sort Your Financials
Rental income is considered income and there will be tax implications – even if you are ‘breaking even’ when all costs such as rates, mortgage, fees and insurance are taken into account.
Be sure to speak with, or find, an accountant before renting your home as they will be able to advise the best way to structure the income to benefit you at tax time. They can also start the process of depreciation in order to start you on the right foot.
Know Your Responsibilities
Renting your property means you need to ensure you and the future tenants are protected. One of the first things you will need to do is make sure your home is compliant with the current laws, and this is something your agent should be able to advise you on in detail.
Basic responsibilities of a landlord include:
- Working fire alarms in vicinity of all bedrooms
- No health threats such as mould, rising damp, unstable fixtures
- Working and locking doors and windows
- Working electricity, heating and water
- A number of water saving fixtures
You will also need to take out landlords insurance to protect against issues such as intentional damage by tenant, theft by tenant, loss of rent in case of tenant default, liability, and legal expenses should you need to take action against a tenant.
Create the Story
Once your home is clean and prepared, you have your agent, and everything else is in order- it is time to sell the story of your home.
Invest in a professional photographer and create a description that will attract the type of tenant you are looking for. Compare similar listings of properties in your area and take note what is mentioned, highlighted and how it is presented.