Renting Resources - Landlords

While your choices regarding your homeowner property will be primarily influenced by emotional reasons (such as personal taste), your property investment will need a different approach. The best way to view your investment is in purely financial terms of risk and return. You need to consider both the rental return and the potential capital growth.

It is important to have a plan upfront of how long you intend to hold your investment property. Most financial advisors believe that the minimum timeframe for investing in property is five years to allow sufficient time for capital gain.

Location is perhaps one of the most important factors to consider when purchasing an investment property. Those who are renting usually value convenience, so include proximity to public transport, public amenities, shopping centres and parks in your choice.
Talk with our property manager about vacancy levels, rental levels and expected future capital growth of the area. Make sure that you have a really good understanding of an area before you purchase a property in it.

Reassess your budget with a view to gauging exactly how much you want to spend; of course, the choice of unit or house will have significant bearing on this. Units are generally a more popular choice for several reasons; less maintenance is involved, larger tenant demand and generally lower price range.

While some property investors choose to take the management of the premises upon themselves, most people prefer to arrange for a real estate agent to manage the property for them. Pittwater Property Management is fully versed in all aspects of property management and the Residential Tenancies Act and can assist you so that your investment is stress free. Remember that if you do decide to take up the role, there will be a number of aspects to consider: finding and vetting the right tenants, collecting and accounting for rentals, paying outgoings such as body corporate fees and rates, arranging maintenance work and conducting ongoing inspections.

Think carefully about whether you’ll realistically have the time to cater to these pressing needs.

 5 back to top

Negative Gearing

The difference between the amount of rent from your property and the expenses related to the property are (assuming there is a loss) tax deductible. There is also provision for non-cash expenses, for example depreciation on items such as light fittings, carpet, building costs, etc. which may increase your available deductions. Much has been written about the benefits and pitfalls of negative gearing. It is essential to consult your accountant before you purchase an investment property to ensure the correct structure is put into place to maximise your returns on the investment. A very informative website to visit in relation to negative gearing and investment is www.propertyinvesting.com

 5 back to top

Trust Accounting

Real Estate agents are required to keep a properly audited trust account. It is in this account that all rent is deposited, owners funds administered and dispersed at the end of each month.

The Department of Fair Trading requires the trust account, to be reconciled each month to a zero balance. The trust account can never be overdrawn under the Act.
There are extremely heavy penalties for breaches in regards to trust accounts. All agents in NSW are compelled to abide strictly by the requirements of the Act to ensure all clients’ funds are well protected.

 5 back to top

Who Pays Council & Water Rates?

The owner is responsible for payment of Shire, water sewerage and drainage rates, land tax and all corporate charges. The tenants are responsible for electricity, telephone, gas etc. The tenant is responsible for the cost of excess water consumption per year.

 5 back to top

Who Pays For General Maintenance?

Under the terms of the tenancy agreement, both the owner and the tenant are responsible for the upkeep and the maintenance of the property.
The owner agrees to keep the property in good and tenantable condition and the tenant agrees to maintain the property in accordance with the original property condition report.

Full working instructions for appliances such as pool filters, air conditioning, heaters, hot water systems, reticulation etc, should be supplied. It is a good idea to copy these rather than supplying the originals.

Any repairs such as electrical and plumbing repairs are at the owners’ expense, provided the cause of the repair was not through tenant negligence.

Our property management department has access to licensed and qualified repairers and will arrange maintenance on you behalf.

In the case of strata units, some repairs may be the responsibility of the Body Corporate. Your property manager is well versed on what constitutes a body corporate repair.

 5 back to top

What Happens If The Tenant Causes Damage?

The question of what constitutes damage and what is considered acceptable “wear and tear” is always an issue in property management. However, in cases of damage attributable to the tenant, the tenancy agreement states that the tenant is liable to pay.

Although most tenants are very reliable, respectful and responsible people we do highly recommend that the owner take out a Landlord Protection Policy. This policy may provide you with peace of mind and cover you for malicious damage by the tenant, loss of rent while any resultant repairs are carried out, public liability, contents cover and more.

 5 back to top

Landlord Insurance

As an owner you are required to adequately cover the property and we recommend that you cover yourself with the following policies:

Public Liability (Contained in some Landlord Policies)
Building fire insurance including fixtures, fittings and removal of debris.
Landlord Protection including wilful damage, loss of rent and legal costs.

We also recommend that you fit deadlocks and window locks which will not only provide better security but will be another feature to attract tenants.

For further information on Landlord Insurance visit www.terrischeer.com.au

 5 back to top

Who Pays My Mortgage?

To avoid any possible confusion and because their may be insufficient funds in your account to cover them, we do not pay mortgage payments. We will pay your rental income electronically into your nominated account twice monthly. It is a good idea to have a top up amount to cover any shortfalls.
 

 5 back to top

How Do You Choose The Tenant?

The tenant who wishes to lease your property completes a detailed tenancy application. A points system similar to that needed for identification purposes when you open a bank account is used. References are thoroughly checked including rental references and employment history. Your property manager will always discuss with you and seek your approval of on any tenancy application that is submitted on your property.

 5 back to top

How Often Can I Inspect The Property?

One of the conditions of the tenancy agreement is that the tenant permits the owner to inspect the property up to a maximum of four times a year, provided reasonable notice is given, in accordance with the Act. Our advice is that you leave the inspections up to your property manager and that you try to arrange any personal inspection to coincide with our routine inspections.
 

 5 back to top

The Residential Tenancy Act 1987

The Act regulates the relationship between the owner and tenant. It determines many important issues relating to the rights and obligations of both the tenant and the owner. These issues include use of premises, payment of rent, notice of termination, disputes and premises. Substantial fines may be imposed for breaches of the Act.
Your Pittwater Property Manager has a full working knowledge of the Act.
 

 5 back to top

Our Guarantee

We guarantee our property management services

Every Pittwater Real Estate client is happily provided with a no strings attached, money-back service guarantee. If any of our clients are not fully satisfied with the service they receive during the first three months of Pittwater Real Estate leasing and managing their properties due to any of the following expectations not being realised, all management fees and leasing charges made by Pittwater Real Estate during that period of management will be repaid in full. We are confident of the level of service we provide to all our clients.

 5 back to top

What you can expect from Pittwater Real Estate

The following is a list of client expectations that the Pittwater Real Estate Property Management Division Team has established as the “bare minimum” service levels that will be provided to all its clients.

Marketing

§  You can expect that a ‘For Lease’ sign will be erected on your property (if signs are allowed);

§  You can expect that your property will be listed on our website with comprehensive and descriptive copy plus at least two digital images;

§  You can expect that your property will be advertised in the most appropriate print media;

§  You can expect that the property will be open for inspection to prospective tenants at least one day every week until it is leased plus unlimited private appointments:

Leasing Expectations

§   You can expect that every tenancy application received on your property will be referred to you for your decision;

§   You can expect that every tenancy application will be screened on the national tenancy database that we subscribe to;

§   You can expect that all business and personal references will be thoroughly checked out and that you will be advised of the results;

§   You can expect that your property will be leased at the amount of rent as outlined in your Managing Agent Agreement or higher and that the property will not be offered or leased at a lower amount without your specific approval;

§   You can expect that once the tenancy application has been approved, the tenancy agreement documentation will be completed at the earliest possible opportunity;

§   You can expect that a comprehensive condition report will be completed prior to the commencement of the tenancy;

§   You can expect that the sign-up interview with the successful applicant will focus on the tenant’s responsibilities in residing in your property

Leasing Renewal

§   You can expect that we will review the tenancy agreement 90 day’s prior to its expiration;

§   You can expect that we will renew the tenancy agreement for a further fixed term at the same or a higher rent (subject to your instructions); and

§   You can expect that if the tenants do not wish to renew their lease, you will be advised of this fact at the earliest possible opportunity

Property Inspections

§   You can expect that whilst your property is vacant, it will be inspected at least once every week;

§   You can expect that we will conduct at least one annual routine inspection of your property and provide you with a detailed report on its condition, both internally and externally;

§   You can expect that your tenants will be contacted within the first thirty (30) days of their tenancy to ensure that all is well with their tenancy and the property;

§   You can expect a comprehensive out-going inspection will be carried out when your tenants have vacated the property and its condition compared in detail with that listed on the in-going condition report.


Rent Collection

§   You can expect that we will make all efforts to collect the rent in full on or before the due date for payment;

§   You can expect that if payment has not been received by the due date that your tenants will be contacted;

§   You can expect that if payment of the rent in full is not received within 5 days of the due date, the tenants will be mailed a ‘friendly reminder’;

§   You can expect that if payment of the rent in full is not received within 10 days of the due date, the tenants will be mailed a ‘not so friendly reminder’ advising them if rent is not paid within 5 days, that a Termination Notice will be issued;

§   You can expect that if the rent is not paid within 15 days of the due date, a Termination Notice will be issued advising the tenants to vacate your property within 14 days*.


Rent Processing & Accounting

§   You can expect that you will receive a monthly itemized report showing all income and expenses relating to your property with original invoices;

§   You can expect to receive a year end summary of all income and expenditure for the preceding financial year;

§   You can expect that we will make such payments as you specifically instruct in a timely manner and should there be insufficient funds held to meet those payments, you can expect to be advised of this fact.


Repairs & Maintenance

§   You can expect that we will not proceed with any repairs that exceed your specific written instruction unless they are deemed to be of an urgency that warrants immediate action;

§   You can expect that we will use only qualified tradespeople to carry out repairs and maintenance to your property;

§   You can expect to receive original invoices for all repairs carried out to your property; and

§   You can expect that if any repairs you authorise exceed one month’s rent, you will be requested to attend to the payment of the relevant account or alternatively, forward payment to Pittwater Real Estate that will facilitate payment through your account


Communications

§   You can be expected to be promptly advised of any matter affecting your property or its tenancy;

§   You can be expected to be immediately advised of prospective tenant response following every time your property is open for inspection or advertised;

§   You can expect to be promptly advised every time your tenant is 10 days in arrears with a rental payment;

§   You can expect to be promptly advised every time your tenant is issued with a Termination Notice;

§   You can expect to be promptly advised every time an application is made to the Tenancies Tribunal;

§   You can expect to be informed immediately your tenant advises of their intention to vacate the property; and

§   You can expect to be informed every time your tenant advises their intentions regarding the renewal or otherwise of their tenancy agreement.


*This is the very earliest that this action can be taken under the Residential Tenancies legislation
 

Smoke Alarms

Under the Environmental Planning and Assessment Amendment (Smoke Alarms) Regulation 2006, landlords are responsible for fitting smoke alarms to all residential premises. The landlord has the right of access to fit the required alarms (after giving at least two days notice to the tenant). The landlord must fit a new battery (if the alarm has a replaceable battery) at the beginning of the tenancy. During the tenancy the tenant is responsible for replacing batteries unless physically unable, in which case the landlord must be advised of the need for battery replacement.

For more information about the type, location and number of smoke alarms that are required to be fitted contact;

Smoke alarms hotline - Tel: 1300 858 812

NSW Fire Brigades - www.fire.nsw.gov.au