Here we discuss key factors to consider while renting out your investment property as a landlord
- Finding the right real estate agent to rent out your investment property – Check the real estate websites on which agent is more active in the area, who are renting out more properties, and who are renting out properties for more rental. Please, keep in mind the amount of money that an agent will get per year to manage the property. Simple maths, if a property is rented out for 500 per year and the agent fee is 5% that means the total rental is 25000 per year and the agent commission is 1250 AUD per year. Please understand that 1250 is very little money for an agent per year. Hence please, understand that you are not doing a favor to an agent by renting out your investment property via an agent, and you don’t own their life by doing so. Hence please, be reasonable and keep in mind that it is a small ticket item for an agent. They do rental management just in anticipation that one day you will sell via them where they can make some money.
- Fees, GST included, etc. – Cheaper is not generally the best. Hence find out the fees of a real estate agent to manage your investment property. Please keep the above point in mind, that if you squeeze out too much then it will not leave any room for the agent to provide you any service. They have to make money to survive in this competitive environment. Coming back to the point, check what is the fees, whether GST is included in it, etc. Management fees range from 4% to 8%, generally plus GST.
- Apart from the management fees, there is another type of fee, as mentioned below…
- Leasing charge: 1-week rent plus GST
– Advertising: $380
– Professional photo fee: $130
– Gas check (once in 2 years): $200
– Elec check (once in 2 years): $150, Smoke alarm fee: $400
– One-time minimum safety standard: $500
– Hoarding board: $120 - Routine inspection frequency – Check what is the routine inspection frequency of the agency, whether it is yearly, quarterly, half-yearly, etc. Whether they will provide you pics, videos, etc., of your investment property.
- What is the notice period to change agents – Check if the agent is not performing or you are not happy with them; what is the notice period to change the agent, whether it is 30,60,90,120 days? Differences come up over a period of time, and usually, you will have to change the agent every 2 to 3 years.
- What are the extra fees – Apart from the rental management fees, what other fees are there? Statement fees, monthly fees, admin fees, etc., are some examples.
- The threshold which does not require approval – Usually, an agent keeps some threshold for maintenance work, for example, under 500 AUD, it does not require approval from the landlord, please check that clause.
- Any rental portal for the landlord to self-manage – Pls check whether the rental agency has a website or a self-management portal to manage the rental statements and other documents of your rental investment property.
- Insurances – Pls check with your insurance agent what all types of insurance you will need for your rental investment property.
Disclaimer: – Articles in this blog are just personal opinions of the author or authors.
It may or may not be correct. Pls do your own due diligence and pls seek professional advice according to your own personal circumstances. The author or authors cannot be held responsible/liable for any content in this blog.
