Simply owning real estate investments is one thing. Managing real estate property is a whole different kettle of fish.
Actually, many property owners choose to engage property agents to manage their rental properties. This means the property owner won’t have the responsibility of directly interacting with either existing or potential tenants.
Other property owners, however, opt to go it alone. In such scenarios, the property owner decides how to market the rental property, who will lease the property, when and how to collect rent, as well as managing maintenance and repair issues.
Landlord duties can be quite overwhelming, especially if you’re new at it or are busy with other obligations.
That’s why you should join thousands of savvy landlords who have discovered Lodge, Australia’s leading property self-management software.
Lodge helps you:
- Find reliable tenants for your rental property.
- Screen potential tenants.
- Collect rent via secure online payments.
- Send automated reminders to tenants when rent is due or overdue.
- Schedule regular property maintenance checks.
- Create digital leases.
If you have decided to self-manage your rental property, these six tips will help you do it like a pro.
1. Update Your Rental Rates
Rental rates in Australia have been rising in the last few years. In fact, experts estimate that rental prices could rise by more than 15% in 2020.
These positive changes are due to interest rate cuts, reduced uncertainty about real estate, tax cuts, positive coverage in the media, and favourable bank lending guidelines.
As a property owner, you want to make as much money from your property as possible. With this in mind, you should research the market rates for similar properties in your area and adjust your own rates accordingly.
Before raising the rent, research the regulations in your state or territory. In general, however, you can increase the rent if a tenant is on a periodic rental agreement.
If a tenant is on a fixed-term lease for less than two years, you can’t raise the rent unless your rental agreement allows it.
Although no state regulates how much you can increase your rent, some states put a limit to the number of times you can raise your rates per year.
- In Queensland, Victoria, Western Australia, and the Northern Territory, you can only increase the rent every six months.
- In South Australia, Tasmania, and the ACT, you are only allowed to raise your rental rates once per year.
- New South Wales doesn’t place a limit on the number of times you can increase periodic rent.
Make sure any rental rate hike is fair. If tenants feel your rent is too high, you will have a harder time finding new tenants and convincing existing ones to renew their lease.
Moreover, existing tenants can appeal to the Tribunal for a decision if they feel your rent increase is too high.
2. Screen Prospective Tenants
“Can I move in tomorrow?”
A prospective tenant may ask this after viewing your property.
The tenant may even be ready to pay six months’ rent in cash right away.
If your property has been sitting vacant for a while, you might be tempted to take the money and give your new tenant a lease agreement.
But if you do so, you will have skipped a very important step in the process: screening prospective tenants.
Who knows, the way-too-eager prospective tenant could be an axe murderer on the run!
Screening prospective tenants, therefore, can’t be overemphasised.
When you thoroughly screen potential tenants you’re less likely to end up with difficult tenants who consistently fail to pay rent on time, become a nuisance to their neighbours, and cause malicious damage to your property.
Some of the key questions to include in your screening process include:
- When would you like to move in?
- Will you consent to a credit and background check?
- What is your monthly income?
- Why are you moving from your current apartment?
- How long have you lived in your current residence?
- How many people will be occupying the property?
- Have you ever been convicted of a crime?
- Are your former landlords willing to provide references for you?
These questions will give you a deeper look into the tenant’s reliability, financial soundness, and general suitability for your property.
Increase your cashflow by self-managing your property.
3. Collect Rent Online
Every landlord loves a tenant who pays their monthly dues on time.
However, some methods of paying rent might make the process unnecessarily long and tedious for both tenants and landlords. This might result in delays in rent payments.
That’s why the smartest landlords are encouraging their tenants to pay rent online.
Here are several reasons to opt for online rent payments through Lodge:
- Your tenants will have their own secure accounts they can log into.
- Tenants will be reminded when rent is due.
- Tenants can make their rent payments from anywhere in the world.
- Payments are recorded and documented (which can help prevent disputes).
- You won’t have to give tenants your personal banking details (making the process even more secure).
- Tenants are able to make automatic payments from their accounts.
- Tenants receive transaction confirmation emails, which they can use for their own records.
When you subscribe to Lodge, your tenants can make rent payments online conveniently and easily.
They can choose to pay via direct debit, one-off transfers, or BPay.
Lodge uses this four-step process for automatic rent collection:
- Advise them about your tenant payment schedule.
- Provide your banking details where you wish BPAY to credit rent paid.
- BPAY generates both a Bilier Code and Customer Reference Number.
- Advise your tenant of these details via email or SMS.
4. Schedule Regular Maintenance and Repair Checks
It’s only natural that your property and the appliances inside will age and require maintenance and repair.
As the landlord, it is your responsibility to maintain and repair your rental property and the appliances you provide with it.
You can schedule regular property maintenance checks using Lodge’s property self-management software.
In addition, Lodge has partnered with serviceseeking.com.au to help you connect with professional tradies in your area.
Service Seeking is an online marketplace that allows clients to review and rate the work of tradespeople. Founded in 2007, the platform has registered over 130,000 businesses and served over 2.1 million Australians.
Through Lodge, you can also generate income and expense reports at the click of a button. This will make your work easier when it comes to filing your annual taxes.
When you attend to minor repairs and maintenance issues, you save money by avoiding major repairs in the future.
You will also be more likely to attract high-quality, reliable tenants who will take good care of your property.
5. Get Insurance
No one likes having to pay insurance premiums.
But in case something bad happens and you’re sufficiently insured, you’ll be glad for the protection it offers.
There are several types of insurance that landlords can choose from, including:
- Home and contents insurance. This will protect you from loss when your home and any valuables in it are damaged due to natural disasters or accidents.
- Landlord insurance covers the same losses as home and contents insurance. However, it also protects you from loss of rent and malicious damage of your rental property by tenants.
- Income Protection Insurance can protect you from loss of income when you have rental gaps in case you evict tenants.
Moreover, ask your tenants to get renter’s insurance. This will cover their liability when they cause more damage to your property than the security deposit covers. It will also compensate for loss or damage to their personal property in case of natural disasters or accidents.
6. Maintain Open Communication With Tenants
Many property owners focus on getting high-quality tenants into their properties. But as soon as the tenant moves in and starts paying their monthly rent, many landlords fail to employ strategies to keep them.
One of the top ways to keep tenants happy is by establishing open and effective lines of communication.
When tenants can access you easily and you communicate with them regularly, they are more likely to maintain your property in good condition and pay their rent on time.
They will also report any maintenance and repair issues early enough before they turn into major, expensive concerns.
Here are some ideas to help improve your landlord-tenant communication:
- Maintain an open-door policy: Let your tenants know that you are always accessible to them and ready to address their concerns.
- Use multiple channels of communication: If you only provide one channel of communication, such as email, some tenants might not be able to access you as much and as easily as they would like to. Provide tenants with multiple ways to contact you such as email, phone number, text message number, mailing address, and even social media address if you have young tenants. You can advise tenants on which one is your prefered channel of communication and set reasonable expectations as to when you’ll be able to respond.
- Always be honest and truthful: Nobody likes being lied to. Right from when you advertise your property, be honest about its condition and amenities. Ensure that tenants have a clear understanding of the rules and regulations on the lease agreement. Always fix anything that’s broken when you say you will.
- Write letters of appreciation: Although it’s a tenant’s responsibility to pay rent on time and keep your property in good condition, you should always appreciate them for doing so. You can write letters of appreciation for your tenants. This will reinforce good habits and might even make tenants stay on your property longer.
Being a landlord can be both lucrative and fulfilling, especially if you’re equipped with the right information, skills, and tools.
Find more property management tips in this free eBook published by Lodge.
With these tips and a subscription to Lodge’s user-friendly property self-management system, you will definitely have a leg up in the game.
Get started today!