Top tips for minimising the risk of privately managed properties

It’s funny (or more frustrating really) that property management seems to be one of the few vocations that an unqualified person seems to think they can do themselves (in order to cut costs and corners). Often times, the value in the property manager is seen during the bad times or during a vacancy.  A good property manager will minimise risk, reduce vacancy periods, negotiate higher rents and secure ongoing leases. So, whilst we don’t recommend that any landlord self-manage, I thought I would prepare a list of top tips for minimising risk if you are managing your own property:

Top tips

  1. When conducting private inspections, request that the potential tenant email or fax through their photo ID prior to the appointment. And always inform someone of where you are.
  2. Always takes names and numbers at public inspections. If someone isn’t happy leaving a phone number, then you shouldn’t be allowing them inside your property.
  3. Have information on display regarding what your intentions are in taking their private information
  4. Ensure that you get any interested parties to complete an application form (you can locate a standard application on the Consumer Affairs Website).
  5. When checking the details of the application, be sure to always call landlord lines and not mobile numbers. A mobile can easily be allocated to a friend and this is often a method used in fraudulent applications.
  6. As above, when checking work references the first call should be to HR or payroll (again their manager or that person listed as their manager may be a friend and not providing you with legitimate and honest information).
  7. As you do not have access to the National Tenancy Database it is more important that you diligently check personal & professional references  (always obtain photo id – 100 points).
  8. Ensure you create and sign a lease agreement. A lease template can be located on the Consumer Affairs Website.
  9. Take a detailed condition report. The best evidence is photographic – ideally print out all the photos and have your ingoing tenant sign to agree to their legitimacy.
  10. Take out a landlord protection policy. Then investigate the best policy as many do not cover you when a tenant is not on a lease agreement or has rolled onto a month-by-month agreement.  This is important because about 60% of all leases automatically revert to month-by-month leases.
  11. Always take a bond and ensure you lodge it with the RTBA. Failure to do so may lead to a hefty fine.  You are allowed to collect a bond equivalent to 6 weeks rent when the rental is over $350pw.
  12. Ensure you take responsibility for annual smoke detection compliance. I recommend you do this every 6 months during the routine inspections.
  13. It’s better if a tenant openly advises they have a pet as you can then initiate clauses to be added to the lease for additional protection. If they are not honest about it you have far less recourse.
  14. Regular inspections are essential to ensure that any issues are addressed in a timely manner for you and the tenant.
  15. Make sure you understand the Residential Tenancies Act and the use all the available resources in order to make accurate and informed decisions relating to your property and the handling of your tenant

I hope the above information helps you create a smoother transactions with future tenants!