You’ve landed the perfect tenant after going through all the processes necessary. You’ve advertised, shown the property, received applications, selected candidates and signed the deal with the tenant you think best. The worst is over. But is it? Baxton in Hobart, one of Tasmania’s top specialists in the property management field, gives you some idea of what can lie ahead for DIY rental property owners while that tenant is in residence.
It is not time to take a holiday, however well-deserved, after all the work and organisation you have gone through to find a tenant. In fact, it could be quite hard even pencilling in dates for one at any point during your time as an investment property owner. This becomes more and more relevant when you own more than one or two properties, and hope to manage them yourself.
Collecting and registering the bond
With the ink hardly dry on the lease agreements, you will still have to do your part of the paperwork involved in the lodging of a security bond. The purpose of the bond is to protect you in case rent is not paid, or tenants cause damage to the property that goes beyond normal wear and tear.
As a private property owner, it is illegal for you to actually receive the bond yourself, but you do have to give the tenant a signed Bond Lodgement Form that states the amount of the bond involved. In terms of Australian regulations, that amount can’t be more than four weeks’ rent.
The tenant has to complete and sign the form. and then lodge and pay it at Service Tasmania or directly with the Rental Deposit Authority. Where a rental agent is involved, they can receive the bond and deposit it with the RDA. Although you as a private owner cannot receive the bond or lodge it, you do need to ensure it has been both lodged and paid, and that you receive and keep a copy of the Bond Lodgement receipt containing its unique Bond Number. This is essential for any later bond claims.
Condition reports and inspections
To make the security bond system work, it is essential that detailed condition reports are made and signed at the beginning of the tenancy. You, as the owner, will have to prepare the report providing details and photographs of the general condition of the property and any marks, damages or non-functioning features that exist at that time.
Two copies of this report are given to the tenant so that they can add anything that they feel has been omitted, and return one copy to you within two days.
During the tenancy it will also be necessary for you to conduct routine inspections (but not more than four times in one year) to ensure that the tenant is keeping to their side of the bargain and keeping the premises in the condition it was in when they moved in. It is also gives you a chance to spot if there’s anything you need to do, to meet your obligations regarding the premises and services supply. So it has its positives, but does take a lot of time.
What’s still to come?
The time-guzzling aspects of DIY rental management don’t stop here. Choosing the right tenant and getting the paperwork and reports organized, is just one side of the rental business. However, if handled correctly and efficiently it can make a very big contribution to the success or failure of your investment in rental property.
Is it worth the effort? Is going it alone is worth the time and stress, or is hiring professionals to do it a better option? Baxton Property Management in Hobart knows what managing rental properties involves. In this series of blogs on the subject, it seeks to share some of its team’s 100-years of experience in the field. And there’s more to come. Other articles in this series will cover rent collection, repairs and termination of leases.
Written and syndicated by
– Baxton Media.
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