20 quick questions to ask yourself before your tenants move in.
Your new investment property is perfect. Your builder has handed you the keys, the property is immaculate and your first tenants are ready and waiting to move in.
Your new investment property is perfect. Your builder has handed you the keys, the property is immaculate and your first tenants are ready and waiting to move in. But before they do, have a quick read through the check list below and make sure you have carefully considered every question. It is surprising how many investors, particularly first time investors, manage to overlook many of the small (but important) details. Dealing with these items before your tenants walk through the door can possibly save you plenty of time, headaches (and possibly money!) in the long run.
1 Are you going to appoint a property manager or DIY? The decision is yours but to save yourself countless headaches and hassles, you are strongly encouraged to appoint an experienced property manager. The good ones are worth their weight in gold and their fees are tax deductible!
2 Have you got the best Property Manager in the business? An inefficient Property Manager can affect the performance of your property or portfolio so make sure you appoint the best and find them early so they can help you very step of the way.
3 Are you leasing furnished or unfurnished? There are plenty of pros and cons for each option but you need to decide early and plan accordingly. Your Property Investment Specialist or Property Manager can help you decide if leasing your property furnished or unfurnished is the best strategy for you.
4 Are you providing everything (including the kitchen sink)? If you do decide to lease furnished, give thought to whether you want to lease fully or partially furnished. Again, this can impact your costs (both initial and ongoing) and the type of tenant you attract. Consider the size and location of your investment property plus your target tenant when making this decision.
5 Are pets allowed in your property? Before you advertise for tenants, decide if your tenants are allowed pets and if so, which ones? If you allow pets your choice of floor treatments, furniture (if furnished) and landscaping should be tailored accordingly. Be strict on your policy and make the decision based on what is best for your investment strategy, not your tenants.
6 Do you have a copy of your warranties and manuals? Many property owners and managers kindly provide a copy of any warranties and manuals for appliances to the tenants but forget to keep a copy themselves. Often tenants are forgetful and misplace or throw out these documents which can be timely and painful to replace. Keep a copy for you, your tenants and the Property Manager and don’t give away the originals!
7 What window treatments and floor coverings did you choose? It may seem obvious but some building packages don’t include window treatments and floor coverings so make sure you have them organised. Select high quality, durable materials which are easy to clean in neutral tones.
8 Is the landscaping low maintenance and water wise? Check to see if your building package includes landscaping and make sure the garden is water wise and low maintenance. Very few tenants want to be stuck with loads of gardening so make the garden as presentable and easy-care as possible.
9 Have you remembered the clothes line and letterbox? Don’t laugh but often when the homeowner isn’t the person moving into the house, some of the most obvious items get missed! Just make sure you don’t forget the clothes line or the letterbox because your tenants won’t be impressed!
10 Where is the bin? It may seem as obvious as the clothes line and letterbox but don’t forget to arrange a bin through the local council. It’s these small details that will make the transition into their new home much smoother for your tenant.
11 Have you considered hiring a gardener? If you have gone to all the effort of planting a beautiful garden, it might be worth your while to hire a gardener and avoid relying on your tenant to keep plants alive. It is a small cost to you but might be much cheaper than starting the landscaping again from scratch if your tenants don’t keep up their end of the bargain! It is also your responsibility to ensure a pool or spa meets the necessary safety standards plus you are required to carry out any major gardening maintenance such as tree lopping or the provision of reticulation.
12 Do you have a full set of all the keys and remotes? Remember not to give all your keys and remotes to your Property Manager and keep a full set for yourself, including all window keys. This will ensure there is always a safe ‘master’ set, no matter what, avoiding costly locksmith visits and replacements.
13 Are the utilities and connections organised? Although most of the responsibility lies with the tenant, make sure your tenant can easily connect to all utilities including phone, hot water, gas and electricity. They won’t be impressed if they move in and can’t access hot water for a month! Similarly, make sure all accounts are closed when a tenant vacates your property so the next tenants don’t inherit a $1,000 phone bill before they even pick up the phone!
14 Do you have a copy of your property inventory? If you are leasing your property furnished, make sure your Property Manager compiles a full inventory before your tenant moves in so you know exactly what you provide and what condition it is in. This will provide you with coverage if any items are damaged or go missing at any stage.
15 Do you have a copy of your Property Condition Report? The Property Condition Report (PCR) is another crucial document to ensure both you and your tenant agree on the condition of the property at the start of the lease and it gives opportunity for recourse if there is any damage during the term of the lease. It is the Property Manager’s responsibility to draft this report so make sure it is thorough.
16 Have you got the vermin under control? And no, we are not talking about your tenants - we are referring to the pesky bugs and vermin that can create havoc and damage throughout a property including mice, rats and termites. It is your responsibility to make sure they are under control so remember to book routine inspections.
17 Have you considered Landlord’s insurance? For added protection, you may wish to consider Landlord’s insurance, particularly if your property is furnished. This insurance protects your property against damage and can often be money well spent! The various levels of cover can include a combination of general contents, loss of rent, malicious damage, accidental loss or damage to goods and legal liability.
18 Is the property correctly registered for land tax? If a property is tenanted as at 30 June, land tax will be applicable on the property. You are encouraged to contact the State Revenue Department to declare the property is not your principle place of residence and to make sure the property is correctly registered.
19 Are you aware of all relevant deductions and depreciations? If you own an investment property, you are required to declare any rental income plus you are eligible to claim any costs associated with the property including fees, repairs and maintenance. Based on the current legislation you can also claim depreciation of the property and its contents so make sure you have a copy of the current depreciation schedule or speak to your accountant for further advice.
20 Do you need a property appraisal? Should you wish to review the current value or the property for tax of resale purposes, this can be arranged by contact ABN Realty direct or via your ABN Realty property manager
So, if you are confident with your answers to the fifteen questions listed above, it looks like it is almost time for your tenants to move in. However, if there was anything that rang an alarm bell, be sure to seek the advice of your Property Investment Specialist or your Property Manager before you go any further. Don’t leave anything to chance and don’t just utter the phrases ‘she’ll be right’ or ‘we can sort that out later’ because time and time again investors have learnt the hard way. Just remember – the devil is in the detail so be smart, be prepared and give your investment the very best chance for success!
For further information contact Investor Assist on 08) 9200 7200 or firstname.lastname@example.org