This article sets out the step-by-step process to renting out your property privately in Queensland. We understand that renting out your property can be an exciting venture, but it can also be overwhelming and filled with uncertainties especially for a new landlord. That's why we have created this comprehensive guide to help you navigate the process with confidence. This guide is for those who are looking to rent out a house, unit, apartment, townhouse or houseboat in Queensland.
1. Important updates you must know
The regulations regarding rent increase are set to change, with the introduction of a new legislation that restricts the frequency of rent increment to once in every 12 months. The existing rules on rent increase will be applicable until the new legislation takes effect, starting from July 1st, 2023.
Starting on September 1, 2023, new tenancies will be subject to minimum housing standards, and on September 1, 2024, all existing tenancies will also have to comply with these standards.
Further information can be found on The Residential Tenancies Authority website resources section on the upcoming rental law changes.
2. Get to know your responsibilities as a landlord
As the landlord of the property, you are responsible for:
Making sure the property is clean, vacant, and in good condition before the tenant moves in;
Respecting the tenant's right to peace and quiet on the property;
Following all health and safety regulations;
Maintaining the property in proper working order;
Providing appropriate security with functioning locks and keys for each lock;
Paying all fees, taxes, and charges related to the property and covering the costs of creating the tenancy agreement;
Repaying the tenant for any emergency repairs they carry out (with conditions in place);
Depositing all bond money with The Residential Tenancies Authority (RTA) within 10 days of receipt.
Ensuring that copies of all relevant documents (such as signed tenancy agreements and entry condition reports) are provided to the tenant within the appropriate timeframes.
Learn more about your rights and responsibilities as a landlord on the RTA website.
3. Get to know your tenant's responsibilities
Your tenant is required to:
ensure timely payment of rent;
maintain the cleanliness and integrity of the property, and strive to restore it to its original condition upon vacating, accounting for normal wear and tear;
adhere to the leasing contract's stipulations;
acknowledge and respect the tranquillity and stability of neighbouring tenants.
Learn more about your tenant's rights and responsibilities on the RTA website.
4. Set the right price
In this step, you will research the rental market. Go online and search for your property address on Property.com.au. It will list for you a lot of information about your property, its historical sales, your market statistics and of course similar properties for rent in your suburb and surrounding areas. When setting you rent price, be sure to be realistic and pick properties that have comparable features such as the property type (e.g. house or unit), location, number bedrooms, number of bathrooms, number of car spaces, amenities, etc.
The ideal rental price is one where the amount is enough or more than cover your mortgage repayments, property taxes, insurance, council and water rates and other costs.
Strike a balance between maximising your rental income and remaining competitive in the market. A well-priced property can attract more potential tenants and minimise vacancy periods.
5. Learn other utilities you can charge for
Tenants usually pay for services such as electricity, gas, phone and internet. You can charge a tenant for water if the property is individually metered (or water is delivered by vehicle) and the property is water efficient. See Charging for utilities section on the RTA website.
6. Preparing your property for rent
Here are some key steps to take in order to prepare your property for rental and boost its overall appearance and ambiance:
Thorough Cleaning and Repairs: Commence by deeply cleaning your whole property, encompassing the carpets, windows, and appliances. Attend to any necessary repairs or maintenance tasks to present a well-kept rental unit. Pay special attention to the kitchen and bathrooms.
Improving Curb Appeal: First impressions hold great importance. Mull over sprucing up the exterior of your property by refining the landscaping, repainting the front door, or adding alluring elements such as potted plants or outdoor seating areas.
Staging and Depersonalising: Forge a welcoming environment by staging your property with tasteful furniture and decor. Get rid of personal items to enable prospective tenants to envisage themselves living in the space.
7. Advertise online as a private property for rent
Once your property is ready and the rental price is set, it's time to market your rental effectively. Consider the following strategies to reach a wide audience of potential tenants:
High-Quality Image: Capture professional, well-lit photographs of your property to showcase its best features, including its internal and external areas. High-quality photos can significantly enhance the attractiveness of your rental listing.
Compelling Property Description: Craft a captivating description that highlights the unique selling points of your property. To get you stated, think of the answers to the following questions:
What are the biggest selling points of your property?
Are you located near schools, shops, parks, easy access public transportation etc.?
Is there access to fast internet?
Social Media and Local Networking: The most cost-effective way to advertise your property for rent is through social media platforms like Facebook Marketplace and local Facebook Community Groups. Share your property listing with friends, family, and real estate groups to increase visibility.
Online Listing Platforms: You can also advertise on popular online listing platforms, such as PropertyNow.com.au, Minustheagent.com.au, Realestate.com.au, Rentbetter.com.au and Rent.com.au, to promote your rental property. Costs vary between these platforms. Choose the one that best fits your needs.
8. Screen and select your tenant
Finding reliable and responsible tenants is essential for a smooth renting experience. Follow these best practices to screen and select suitable tenants:
Rental Application Process: Develop a comprehensive rental application that collects essential information about potential tenants, including employment details, rental history, and references.
Background and Credit Checks: Perform thorough background checks, including credit history, criminal records, and eviction history, to assess the reliability of prospective tenants.
Interview and Reference Checks: Conduct interviews with shortlisted applicants to gauge their compatibility with your rental property. Contact previous landlords for references to gain insights into their past rental behaviour.
Do take note that when you advertise your property as for rent by owner, that potential tenants see that, and you may receive an offer for a rental price that is lower than what you ask for.
9. Produce your private rental agreement with your tenant
The Residential Tenancies Authority (RTA) have provided templates for producing a tenancy agreement with your selected tenant. Simply follow the instructions provided for the in the following forms:
General tenancy agreement (Form 18a)
Entry condition report - general tenancies (Form 1a)
Bond lodgement (Form 2)
10. The alternate to doing all of the above yourself
If all that sounds too hard, you may also want to outsource part of the process to an agent. You may wish to engage an agent to help you with the initial work and advertise, screen and select the tenant, prepare the tenancy agreement and entry condition report, collect and lodge the bond then change over the property management to yourself as a private landlord.
11. Managing the tenancy
Don't be fooled, handling the property management yourself is no easy task. It is not a thing that you can just set and forget and get about your day as you please once a tenant is in. Maintaining a positive landlord-tenant relationship will mean effectively handling tenant concerns and complaints. Here's how you can foster a positive landlord-tenant relationship:
Open Communication: Encourage tenants to communicate openly about their concerns or complaints. Maintain a respectful and understanding approach to foster a positive rapport.
Timely Response: Respond to tenant inquiries and complaints promptly. Even if you are unable to resolve an issue immediately, acknowledging their concern and providing an estimated timeline for resolution can go a long way.
Professional Mediation: In case of conflicts or disputes, consider involving a neutral third party, such as a professional mediator, to help find a fair resolution for both parties.
Finally, ensure that you maintain comprehensive documentation. Create either a journal or file that includes all grievances, worries, resolutions, and discussions held with the tenant. Note down the date, time, medium of interaction, individuals involved, and actions taken. Believe me, these records may prove to be useful if the situation becomes more complicated.
12. Keep your property well maintained and in good repair
Maintaining your property's condition is essential for tenant satisfaction and preserving the value of your home. Follow these maintenance guidelines to keep your rental property in top shape:
Regular Inspections: Conduct periodic inspections, ideally every six (6) months, to identify any maintenance issues or repairs that need attention. Promptly address these concerns to prevent further damage.
Responsive Communication: Establish effective lines of communication with your tenants to encourage them to report maintenance issues promptly. Respond to their concerns and address repairs in a timely manner.
Proactive Maintenance: Stay proactive by performing routine maintenance tasks, such as air-conditioning system servicing, gutter cleaning, and pest control. This helps prevent major issues and ensures a comfortable living environment for your tenants.
13. What if you have to evict your tenant?
There are rules and timeframes that must be followed when ending a tenancy. A tenant or yourself as a landlord can issue a notice ending a tenancy.
The tenant gives notice to the landlord using a Notice of intention to leave (Form 13). The landlord gives notice to the tenant using a Notice to leave (Form 12). Minimum notice periods apply, so be sure to refer to the RTA website for the timeframes.
What if things, get complicated with the eviction? Remember the comprehensive documentation I mentioned, that will become a useful source of supporting documents for you if you have to make application to Queensland Civil and Administrative Tribunal (QCAT). This is a process that should not be handled lightly. We suggest that you consult with a local real estate agent first to see if they could assist you with the application. Failing that, consult with a legal professional.
14. Here's a list of other factors for you to consider
Being aware of your legal and financial obligations as a landlord is crucial for a successful rental experience. Here are some important considerations:
Taxation
According to the Australian Taxation Office (ATO), you can continue to treat a home you own and have lived in as your main residence for up to six years for Capital Gains Tax (CGT) purposes, even if you do not live there anymore and use it to produce a rental income.
The Australian Taxation Office (ATO) website lists the income you must declare at tax year. Consult with a tax professional to ensure compliance and maximize tax benefits.
Mortgage
If you decide to turn your owner-occupied home into a rental property, and you are paying off a mortgage, then it is important to notify your lender of this decision. This is because home loans for owner-occupiers are generally different to home loans for investors. If your lender finds out you have been untruthful about the purpose of your loan, there could be penalties, and you could potentially even end up losing your home. If you opt to transform your primary residence into a rental property while still paying off a mortgage, it is crucial to inform your lender about your choice. This is because the terms and conditions of home loans issued for owner-occupied houses vary from those given to investors. In case your lender discovers that you withheld the truth regarding the loan's purpose, there may be consequences, including potential penalties and the risk of foreclosure.
Insurance
If you plan on renting out your home, then you do need to purchase landlord insurance. Landlord insurance policies also carry higher liability insurance coverage limits than a homeowners' policy would. This is because landlords need that additional cushion to protect them from any possible lawsuits and legal fees. It is not unnatural to see a landlord with a $1M limit on their policy. In the event that you intend to lease your residence, it is important to obtain landlord insurance. Landlord insurance plans provide enhanced limits for liability coverage compared to homeowners' policies. This is imperative as landlords require an increased level of protection against potential lawsuits and legal expenses. It isn't uncommon to find landlords with coverage limits of up to one million dollars.
Conclusion
Renting out your property can be a rewarding venture when approached with the right knowledge and strategies. By following the comprehensive steps outlined in this guide, you can optimise your rental experience, attract quality tenants, and maintain a profitable and successful rental property.
At Pesco Properties, we are dedicated to providing the residents of Ipswich and Toowoomba valuable information that will help them maximise the value of their property or the return on their investment with our expert guidance and support. Feel free to reach out to our team for any further assistance or inquiries. Happy renting!
Disclaimer:
The information provided in this article is for informational purposes only and should not be considered financial, legal, or professional advice. The content is based on the author's personal experience, research, and opinions, and is intended to provide general guidance and insights. Every individual's situation is unique, and it is recommended that you consult with a qualified financial advisor, legal professional, or other experts before making any financial decisions or taking any actions based on the information presented in this article. The author and publisher of this article are not responsible for any errors or omissions, or for any actions taken based on the information provided herein.
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