When you buy an investment property to rent out you don't become just a property owner, but a landlord. That brings with it a whole new set of responsibilities you need to know about. If you are planning to manage the property yourself, this is vital or you could find yourself in legal hot water and facing a hefty fine if you do the wrong thing. Even if you engage an expert Century 21 property manager, who is fully up to date with all the legal issues pertaining to landlord rights and landlord responsibilities, it's still best to be aware of both your rights and responsibilities and the rights and responsibilities of your tenants.
Your best source of detailed information is the Office of Fair Trading website for your state, however here are some of the basics:
Dealing with the bond
As a landlord, you should insist on a bond from your tenants as a security deposit in case of damage, theft or neglect of the property, or failure to pay rent. If the tenants keep the property in good condition, they receive the bond back when they move out.
If, on final inspection, you or your property manager observe that the property has not been sufficiently cleaned or there is damage, some or all of the bond can be withheld. Before doing this, however, it's important to check the legal details of tenants' responsibilities on leaving the property. If the bond is withheld for insufficient reasons you may be hauled up in front of a tribunal.
Visiting the property
Once you have a tenant in the property you can't just pop in and check the place whenever you like. You need to give the tenant notice. Check your local legislation for details of how much notice you need to give, whether the tenant must agree to your visit and whether you need to give the notice in writing.
Handling repairs
If you receive a request from your tenant for an urgent repair then you must deal with it without delay. If you don't attend to it immediately, your tenant can arrange for the repairs to be done at your expense up to a certain value. Check with your property manager or consumer affairs office in your state to find out the definition of an urgent repair.
If the repairs are non-urgent there are still restrictions on the time you have to deal with them. In Victoria, for example, non-urgent repairs must be dealt with within 14 days.
Increasing the rent
You can't increase the rent whenever you want. There are laws governing how often you can increase the rent and by how much. You must also give the tenant at least 60 days' notice prior to any rent increase. This means you should discuss any rental increase with your Century 21 property manager well ahead of time.
Ending a tenancy
At some stage, you may wish to end a tenancy to sell the property, move into it yourself or some other reason. If the tenant is on a fixed term lease you can't just tell them they have to move out.
If this situation occurs, you will need to check the reasons allowed for giving notice that you wish to end the tenancy, how the notice must be given and how much notice is required.
Be aware of discrimination laws
As a landlord, you are able to choose the tenant you feel to be most suitable from those who apply, however, you need to be aware of the equal opportunity legislation in your own state. If you are seen to be discriminatory in your choice of tenant you could be made to pay damages or receive a fine.
While you can legally manage a rental property yourself, the headaches can be of migraine proportions. Securing the services of a professional Century 21 property manager saves you a great deal of time and hassle and you will know your investment property is in safe hands at all times. Managing a rental property is a complicated business fraught with legal pitfalls for the unwary. Best to leave it to the experts who know landlord rights and responsibilities and tenant rights and obligations backwards.