Before you can lease your new investment property to tenants, there are several tasks you need to perform. Some will save you money and others are required by law.
Here are some tips for making sure your property is ready to rent.
1. Move your tenants in close to settlement
Every week that your new investment property is vacant, after settlement, is income you’re losing.
Once the property’s offer becomes unconditional, try to seek the current owner’s cooperation to advertise it for lease before the official settlement date. Then your tenant can start the lease close to settlement day.
Your property team may be able to ask the current owner for access to show tenants through (if the property is vacant). This isn’t always possible, but it’s worth asking so you can get tenants in as soon as possible.
2. Manage the keys
When you buy a property, the owner will hand over the keys they have for doors, windows and gates. Often this is a hit-and-miss process. Legally, the owner only has to hand over one front door key. However, as a landlord, you must give tenants keys for all openings.
Therefore, a good sales condition to place on your offer might be:
‘The seller to provide keys and remotes to all lockable openings. This includes (but is not limited to) door locks, window locks, letterboxes, garages, storerooms and gates. These keys and locks are to be in good working order. All keys are to be supplied prior to the buyer’s final inspection to satisfy this clause.’
3. Clean the carpets
Property owners aren’t legally required to professionally clean carpets as part of a real estate sale. However, landlords are required to provide tenants with professionally cleaned carpets. Tenants must return the property to the same condition when they leave.
To meet this requirement, you may need to have the carpets professionally cleaned before your tenant moves in (assuming the property isn’t brand new).
4. Check for locks and lights
In 2018, the WA Department of Commerce regulated that all rental properties need:
- a security light at the front door
- lockable patio doors.
You should determine whether your new property has a security light and lockable patio doors before you purchase it. If not, you’ll need to install these facilities at your own cost and plan that cost into your budget.
5. Check for RCDs and hard-wired smoke detectors
By law, a seller must warrant that the property has two residual current devices (RCDs) and at least one hard-wired smoke detector (or two for second-storey homes).
However, despite this legislation, sometimes a property is settled and the buyer finds these don’t exist. To avoid this, we recommend inserting this clause into your offer:
‘Seller to provide a current Electrical Certificate confirming the subject property conforms to legislation re: RCD’s and hard wired smoke detectors.’
If you don’t get this certificate at settlement, you must provide it to the property manager before the property can be leased. It will cost approximately $88.
6. Check for alarms and codes
Another important thing to check before you rent out your property is the alarm system. Even if the property has an alarm system, it may not work or you may not have the codes.
Check the alarm system at the final inspection before you purchase the property. You could insert this clause into your offer:
‘The owner warrants the alarm system is operation and codes will be handed over prior to the settlement.’
7. Have the property cleaned
Often the condition of the property at settlement will not be good enough to hand over to a tenant when they start their lease.
We recommend that you work with your property team to contract cleaners and gardeners to bring the property up to leasing standards.
Once the high standard has been set, it will become the benchmark for handing the property back at the end of each tenancy.
8. Don’t forget property management
Appointing a capable property manager will take the ‘frontline stress’ out of investing. The property manager will run your investment like a business – ensuring rents are paid and maintenance is done by qualified trades at reasonable costs.
All funds are accounted for and statements are prepared monthly, saving you accounting costs. So you can concentrate on earning your income and sourcing the next investment.
Do you have more questions about investing in property or need assistance with your purchase? Contact Alan Bourke or anyone from Bourkes on (08) 9474 2000.