If you’re thinking of moving abroad for some time or are in need of a steady side stream of income, renting out your property can be a perfect solution. There’s a fair bit of competition in today’s rental market, so it’s important to ensure that your property is in top shape and that you’re ready to take on the responsibility of being a landlord. Keeping the following aspects in mind can help you get started.
Top Investment Locations
For those who plan on purchasing a home with rental income in mind, it’s crucial to research locations properly before making a purchase. It will be easier to rent your house if it’s in a well-travelled location, whether that’s in a seaside town or a major city. Popular areas like Katoomba in New South Wales and Middleton in South Australia are filled with bed and breakfasts and holiday rentals. Towns like Dromana in Victoria offer the best of both worlds, providing a seaside holiday within weekend commuting range of Melbourne. Real estate investments in Australian Capital Territory and Tasmania are also worth considering, as they are available at low prices.
Preparing an Existing Home
You don’t have to purchase a new property in order to become a landlord. If you already own a home, you can prepare it for long or short-term rental by meeting with a letting agent. You’ll need to reduce clutter and give your home a thorough cleaning, repairing any faulty appliances and ensuring that your house is in best shape from attic to basement. Start making a list of your home’s best features to use in the online listing. Renters today love clean, modern spaces, so it may be worth upgrading your home’s features with wooden floors and stainless steel kitchen fixtures.
Fees Associated with Rentals
Although you will see a steady return on your investment in the form of rental income, there are some start-up fees that new landlords need to think about. You can rent your property using a letting agency, which will incur fees, or use an online listings site and draw up your own agreements. Further fees to consider include the cost of incidental repairs and maintenance, council tax, water and sewerage charges, and professional cleaning in between tenants. You may need to purchase additional insurance that offers landlord protection against malicious or accidental damage by a tenant and legal liability costs. Land tax may also be applicable in some circumstances.
Choosing a Tenant
Finding tenants is one of the first actions you’ll need to take as a new landlord. You can post your property on online listings sites, place newspaper ads, and spread the word amongst friends and relatives. Although it’s tempting to rent your home to the first tenants that turn up, it’s worth your while to be selective. The ideal tenant will keep your home in good condition while you’re not there and will be able to pay the rent on time, saving you a lot of stress. Ask for references and run a credit check as part of the screening process. With their basic background information cleared, you can ask for a security deposit and write up a lease.
Although renting your property out can involve a bit of time, money, and paperwork, it can be a consistent source of income on top of the equity and other benefits that owning real estate provides.