Property represents a very secure, sound, long term form of wealth creation as it will protect the owners against inflation over the long term. A properly managed investment property can provide the owners many advantages including passive income in addition to capital growth. Many investors may also be able to use their investments to reduce tax payable on their assessable income.
It is then important, to be aware of the responsibilities of managing your property investment and assuring proper care and responsibility. As considerable money is at stake, you need to take the time to obtain quality advice with regards to your investment. It is therefore wise to always seek appropriate advice from a qualified financial advisor or your accountant in addition to consulting a properly licensed real estate agent.
Here are answers to some commonly posed questions on property management.
- What is the typical lease period?
The most common lease terms are six (6) or twelve (12) months. However, there is no restriction on the lease term you can offer. A 12-month lease allows you to build a more stable relationship with your tenants, which may encourage them extend the lease. However, some may also shy away from longer leases that lock them in for an extended period.
- What rental income can I expect from my property?
It is not possible to estimate the rent you can charge prior to properly appraising your property. The factors that affect a property’s rental value include location, space, amenities, the condition of your property, landscaping, washing and drying facilities, provision for allowing pets, etc.
However, to give you a rough idea, perform a quick research and have a look at properties currently up for rent in your area and compare the features and location.
- Can I increase the rent in the middle of a lease period?
The rental rate set in the contract will hold throughout the lease term unless a special provision exists allowing a rent increase in your tenancy agreement. If not, at the end of the term, you must provide tenants a written notice of the intended increase.
- What is the definition of a ‘good tenant’?
A good tenant is someone who pays rent on time and maintains your property responsibly. You can expect a smooth and positive experience with most tenants. As many renters go on to own homes, they understand the importance of upholding the terms and conditions of their contract.
- Would a tenant default on their rent?
We conduct a background check to qualify only trustworthy prospective tenants. However, there is a small window of possibility that one or two tenants may pose problems. The issue of bad tenants is often seen in poorly managed and maintained properties. Our experienced property managers go the extra mile to ensure that you won’t face this problem.
- What if my tenant does not pay on time?
It is inevitable that some tenants may find it challenging to pay rent at some point during their tenancy. We have strategies and systems in place to effectively manage this risk.
- What happens at the end of the lease?
At the end of the lease, you have the option to renew the lease or you can request the tenant to vacate. Landlords typically tend to extend the lease when their experience with tenants has been smooth and fruitful.
- What is my major responsibility as a landlord?
Your major responsibility as a landlord is to offer and maintain a property that meets basic habitability requirements, such as structural safety; heat, water and electricity; sufficient water-proofing and a sanitary indoor environment. You are responsible for ensuring the safety requirements set out in the Building Code of Australia.