For landlords and property investors
General landlord FAQs
Am I responsible for strata?
If you own a Strata Titled property the issue of maintenance is split (not evenly) between you as the owner of the property and the body corporate who is charged with maintaining the common areas of the strata complex.
Here’s a simple rule of thumb: You are responsible for everything inside a strata titled unit (from the paint-line in) and the body corporate is responsible for everything outside your unit (from your paint-line out). This rule can vary in some circumstances so a careful reading of your strata body’s regulations is highly recommended.
Do I need landlord insurance?
The short answer is YES.
- While we take every measure to select the best tenant for your property, no screening process can predict the future behaviour of your tenant. We can manage many parts of the tenancy but cannot be on-site around the clock to check on your tenant – this is where landlord insurance comes in.
- Without landlord insurance, the maximum compensation you can expect when a tenant leaves your property damaged or owing rent, etc, is the total of the bond. In NSW, for an unfurnished property, this is equivalent to 4 weeks rent, e.g. $400.00 per week totalling a sum of $1600.00.
- If your tenant stops paying rent for any reason (which may include losing their job, for example) they have to be two weeks behind with their payments before we can commence a tribunal action to recover the rent. In most cases we have to wait three weeks for a hearing and tribunal, after which the tenant is often given another two weeks to vacate or pay up all the rent owed (which they never seem willing or able to do). So, a failure to pay up means you can be out of pocket for up to seven weeks’ rent – and the bond won’t be enough to cover this.
- Standard Home and Building insurance does not cover you against intentional damage by a tenant or loss of rent.
If a tenant damages your rental property, such that it is unable to be rented for several weeks, a good landlord insurance policy will cover you for (all or part of) the period of restoration.
But which company offers the best cover?
After processing hundreds of landlord insurance claims for our clients for over three decades, we can assure you the only worthwhile landlord insurance policy comes from a specialist such as;
What is an ‘Agency Agreement’?
Your instructions to us as your agent are contained in a document called a ‘Management Agency Agreement’.
Since 1981 real estate agents in NSW have been prevented from acting for a property owner unless this document has been properly completed and signed by both the owner and the agent.
Consequently, we cannot advertise your property or show a prospective tenant through your property until the managing agency agreement has been signed and the work you expect from us has been clearly described.
What is a ‘POD’ and how do they work?
In short, it’s a team comprising up to three property managers that we allocate to manage your rental property at Prudential Real Estate.
Your team or POD is responsible for looking after every aspect of your property as well as the relationship with the tenant.
We developed this system at Prudential Real Estate to ensure that
- all members of the team understand and are familiar with your property, and
- someone is available at all times to speak to you, should you have a question or concern about your property.
Should I manage my rental property myself?
While a good real estate agent puts in place systems to manage a property successfully and with complete ease for the landlord, the likely outcome is that it often leaves the landlord questioning, this is easy, I have a great tenant… can’t I just do it myself?
But our value as your agent doesn’t only arise when you have an ‘uncooperative’ tenant. Consider that there are challenges likely to arise with even the best tenant, such as if they were to lose their job, have a domestic issue, fall ill or experience misfortune. While it’s a challenge of financial difficulty, the result is the same in the end – a tenant who can’t pay rent, adding up to a huge loss for you.
It’s in these common situations that it really does pay to have an experienced agent who can represent you, should you need to defend yourself at a tribunal. Consider that representing yourself against a tenant will require taking time off work as well as a struggle with loss in rent, a vacant property or in some instances, a property left badly damaged.
In all of these instances, Prudential Real Estate can not only make a convincing case on your behalf (which you may otherwise have lost), but can prevent you from even further loss from your property sitting vacant by finding a great tenant. And with the single largest rental property portfolio in South West Sydney, we can lease your property quickly.
When can I move back into my rental property?
Many of the properties we manage were once the homes of our clients. Some move interstate, overseas to work, closer to family or experience a change of circumstances.
When you want to move back to your home we are happy to assist you. The important thing to consider is it’s not as simple as asking your tenant to leave; our role is to advise and give the lawful notice periods, which much be adhered to should you wish to return to your property. Generally, the following notices apply:
- If your tenant is in a fixed term agreement, 30-days notice must be provided and that 30-day period must expire after the end of the fixed term.
- If your tenant is in a periodic agreement (when the original term, usually 6 months, has expired) then a 90-days “no-grounds” notice will be required.
Although we can ask your tenant to vacate earlier than these notice periods the tenant has the right to stay until the end of the period. Moreover, if they choose to move earlier than the end of the notice period, rent can only be charged until they hand in their keys.
Should I give my contact details to my tenant(s)?
Once you hand over responsibility for the professional management of your property to us it is in your best interests that you do not contact your tenant.
New landlords commonly make the mistake of visiting their rental property once a new tenant has taken up residence to check up on things. Before long they have exchanged phone numbers (or addresses) with the tenant, and that’s when things can run off the rails. Quite often the tenant will take this as a cue to contact the landlord should they have a repair, concern or complaint to make about their tenancy.
To prevent unnecessary hassle and contact between you and your tenant, it pays to leave your agent to represent you in all circumstances to do with your property.
What’s the law when it comes to discrimination when renting?
In sum, the law states that we cannot discriminate against anyone based on the following criteria:
- race (colour, nationality or descent)
- sex (male or female)
- marital status (e.g. singles or unmarried mothers)
- disability (physical, intellectual or psychiatric disability)
- homosexuality (both gay and lesbian)
- age (both young or old)
- transgender (transsexual).
Prudential Real Estate will refuse to take instructions from any client who asks us to discriminate against any applicant for a rental property. You can find out more about discrimination and the law on Fair Trading NSW’s website: Discrimination when renting.
Can I access the property during a tenancy?
In the Residential Tenancy Agreement, the landlord or agent can enter the property under the following conditions during a tenancy:
- In an emergency (this includes entry for the purpose of carrying out urgent repairs),
- If the Tenancy Tribunal (NCAT) so orders,
- If there is good reason for the landlord to believe the premises are abandoned,
- If there is good reason for serious concern about the health of the tenant/occupier,
- To inspect the premises (after having issued a 7-day written notice to the tenant),
- To carry out or assess the need for repairs (after having issued a 2-day written notice to the tenant),
- To carry out or assess the need for work related to health and safety obligations (after having issued a 2-day written notice to the tenant),
- To show the premises to prospective tenants with reasonable notice given to the existing tenant/s (during the last 14 days of the agreement).
- To value the property (after having issued a 7-day written notice to the tenant),
- If the tenant agrees in any other circumstance, and
- If the property is for sale (in accordance with clause 20,21,22 of the agreement).
If you would like to inspect your rented property, please contact our office to ensure we provide the correct notice to the tenant.
How many keys to my property should I have cut?
When a tenant moves into your property we typically provide two copies of every key to the tenant (one set for each adult is the normal arrangement). We also require an additional set to store at our office in the case of an emergency, plus your original set in a separate, locked location at our office.
As the owner of the property you should also retain a full set of keys.
This means you need five (5) full sets of keys before we can let your property to a tenant – one set for you, two for us and usually two sets for the tenant.
Each of these keys should be tested to ensure they work correctly, as well as locks to ensure they provide adequate security.
All keys provided to the tenant are photographed before the tenant takes occupation of your property. This record is compared to the keys that are returned to us when the tenant vacates, so we can keep track of your keys from one tenancy to another.
What is the rental bond used for?
The purpose of the rental bond is to compensate you for loss should the tenant leave your property dirty, damaged or owing rent.
The rental bond however is often not enough to cover serious loss of rent or damage. Therefore recommend that all landlords obtain insurance coverage to ensure losses are minimised or eliminated all together.
See Fair Trading NSW: Taking a Bond
How does the tenancy application work?
When we list your property for lease, tenants can easily apply to rent it via our simple and straightforward online system. We’ve streamlined this system so that our landlords can benefit from reduced vacancies between tenancies.
Once the online application has been completed, our leasing team check every item and subject the application to a tenancy scoring system that selects the best tenant. The purpose of this is to check their supplied documents and identify the likelihood of a successful tenancy in your property. The tenant will also be invited through the online system to inspect your property to ensure it matches their needs.
Should the tenant be successful, we will contact you immediately to allow you the opportunity to accept or reject the application. If accepted we ask the applicant to pay a holding deposit, after which we arrange for them to pay their bond (equivalent to 4 weeks’ rent) by EFT to the Rental Bond Board. When this is received and they sign their Residential Tenancy Agreement, their tenancy of your property has commenced.
Do I need to clean my property when a new tenant moves in?
The tenant is asked to keep and return the property in ‘reasonable condition’ compared to the condition of the property at the start of their tenancy – so it pays to present it in great condition from the start. Here’s our checklist:
- Keep lawns and shrubbery trimmed and free of clutter. Keep the garden beds weeded and mulched.
- Tidy up walkways
- Straighten gutters or fences
- Fix doorbells, tighten loose door knobs, and oil squeaking hinges
- Repair broken/cracked windows and shutters
- Shampoo the carpets and rugs and wax floors. Wash or brush walls. Wash windows and clean blinds and draperies
- Check that bathrooms are free of soap scum
- Clean kitchen countertops and cupboards, fix doors, handles and knobs, scrub out the “under sink” area and inside drawers.
- Degrease the oven. Let the kitchen smell fresh and fragrant
- Remove debris (dust, flies, moths etc.) from all light fixtures
What’s the maximum bond my agent can request from my tenant?
As a general rule the maximum bond for an unfurnished property in NSW is the equivalent of 4 weeks rent.
Although the law allows a few variations (for unfurnished properties, for example) almost 100% of properties managed by Prudential Real Estate come within the scope of this rule.
It is a breach of the Residential Tenancies Act to ask for or accept an amount greater than 4 weeks rent (unless the property falls within one of the variations as mentioned above).
Sometimes our clients ask us to accept one of their relatives or friends as a tenant in their property and insist we take no bond. This is not a breach of the Act, however, we ask, in these circumstances that you provide us with a clear written instruction.
Repairs and maintenance (for landlords)
What defines an ‘urgent’ repair?
We’ve got a comprehensive article on the difference between urgent and non-urgent repairs – click here for examples.
I need a repair in my property, what do I do?
Call your Property Manager – you can find their contact details here.
Almost all requests are generated by tenants when they notice something is not right at their property. We also report repairs and maintenance to you when necessary as a result of our property inspection cycle.
We manage repairs with the use of proprietary online software which automatically collects and streams requests from tenants, sends out notifications to tenants and trades people and assists with the invoicing and payments of the repair process. Your property manager oversees this process for you and your tenant on a daily basis.
One of the advantages of this system is that it manages the allocation of work to qualified and properly insured tradespeople only.
The trades people engaged by our office are selected by our property management staff on the following criteria:
- Value- for-money costings
- Quality of work
Once the work is completed we will pay the tradesperson’s invoice by deducting the cost from your next month’s rent collections.
Who is responsible for smoke alarms in my property?
As a landlord, you are responsible under the Residential Tenancies Act for:
- Installing smoke alarms in rented premises
- Accessing the rented premises to fit or maintain smoke alarms after giving the tenant at least 2 days notice
Other important information:
- Neither the landlord nor the tenant are, except with reasonable excuse, permitted to remove or interfere with the operation of a smoke alarm fitted in a rented premises
- Where a smoke alarm is of the type that has a replaceable battery, it is recommended that the landlord put a new battery in at the start of the tenancy
- After the tenancy begins, the tenant is responsible for replacing the battery if needed.
- Fire & Rescue NSW can assist elderly tenants or those physically unable to change a smoke detector battery.
Who is responsible for wear and tear in my property?
Whilst a tenant is responsible for damage and cleanliness at a rented property the owner is fully responsible for what the Residential Tenancies Act describes as “fair wear and tear”. This is natural deterioration that occurs over time such as when fixtures and fittings wear down.
You can reduce the impact of wear and tear by conducting regular maintenance at the property. Every time a tenant vacates your property we will provide you with advice as to any needed repairs and/or maintenance items we have observed and our recommendations as to any required action.
Who is responsible for fixtures and fittings in my property?
When a property is rented the tenant becomes responsible for taking good care of the fixtures and fittings at your property.
As the property owner you are responsible to make sure that all fixtures and fittings work properly. For example, a stove must have all elements working properly at all times; a toilet must be capable of being properly flushed at all times; an air conditioning unit must produce refrigerated/heated air.
If your tenant reports that any fixture or fitting has become inoperative you are responsible to have the item repaired or replaced. We can arrange a qualified tradesperson to either repair the problem for you or to provide a quote for the replacement of the item. If, on the other hand, the tenant has caused the damage to any of your fixtures or fittings, they would become responsible to undertake the repair.
My property has a swimming pool, what do I need to know?
If your rental property has a swimming pool then you are affected by NSW swimming pool legislation that commenced on 29 April 2016. Click here to read our latest advice to landlords.
Pets (for landlords)
Should I allow my tenant to have a pet in my property?
Given that more and more people wish to own one or multiple pets (in fact, a majority of tenants), it’s worth carefully considering whether or not to allow your tenants to keep pets at your property.
Every landlord is faced with the question of potential damage caused by animals, but luckily such circumstances are rare. Should you elect to not allow pets, it should be considered that you may eliminate nearly two thirds of the potential market who might rent your property (and who may otherwise be perfect tenants), which could be a substantial loss to your property if it sits vacant.
In any case, be assured that Prudential Real Estate will honour your decision and will pursue your goal to find the best tenant with or without a pet.
Can my property manager ensure no pets are in my property?
Although our property managers cannot be at your rental property every day they do take care to look for tell-tale signs that the tenant may be keeping a pet in breach of their agreement.
If we think their may be a pet at the property we will investigate, advise you and, following your instructions, enforce the terms of the agreement.
Finding a tenant
How will you advertise my rental property?
When you instruct us to market your property, we arrange for:
- Photographs to be taken with the best chosen for publication
- An experienced copywriter to write up online and print advertisements for your property, which will be sent to you for approval
- All images and content to be published online for prospective tenants via the following sites:
- More …
Additionally, when your property becomes available to rent we notify our tenant database they can now book to view your property. Prudential Real Estate has the single largest tenant database in Sydney’s South West which helps us maintain one of the lowest vacany rates in the industry.
My property is vacant, how can I find a tenant quickly?
Most property investors will experience a vacancy at some stage – however there’s a lot that can be done to reduce your chances to very little or even no vacancy at all. See all of our tips in our blog: What EVERY landlord should know about rent vacancies
Investing in property
Should I invest in a rental property?
There are many places you can invest your money, and residential property certainly comes with its advantages.
A good managing agent can reduce your risk to almost nothing.
In fact, with the use of proven rent collection systems, thorough and regular inspections, correct landlord insurance and time proven systems, many choose to invest in property above managed funds or the sharemarket because of the smaller risk associated.
Importantly, many investors are also attracted to the opportunity to add value that property presents – whether that be through renovate to resell or in leasing – that is not a benefit of any other asset.
How can I maximise rent from my property?
While we strive to achieve the maximum rent possible for your property at Prudential Real Estate, we must also balance this aim with the need to get your property rented as soon as possible.
For example, if your rent is $350.00 per week and your property is vacant for only one week it will take 35 weeks to make up an extra $10.00 per week in rent you may be hoping for. So, both factors (best rent, least vacancy) are important when marketing your property to prospective tenants.
These 3 factors must be considered:
- Demand: is there a high or low demand for properties such as yours at present. This can be seasonal and affected by a number of issues.
- What is available now: we look at all properties currently available for rent and consider their location and features for comparison to calculate a maximum rent for your property.
- What we have rented right now: we compare your property with the properties we have currently rented, taking into account property location and features.
What if I want a rent amount that is higher?
As the owner of the property you are entitled to ask any amount of rent you wish – and we are happy to accept your instructions. However, keep in mind that it is market demand that sets the rent, and if the market (made up of all prospective tenants looking for rental properties in your area) consider the rent too high, your property may stay vacant longer than necessary.
With this in mind, be aware your annual rental return will be reduced by 2% for every week it is vacant!
What is tax depreciation?
Tax depreciation is a legitimate tax deduction property investors can claim to account for the ageing of their property and assets.
If you have a question or concern relating to tax depreciation for your property, your best answer is to contact your property manager who can speak with a depreciation specialist on your behalf to find out what deductions you can claim for your property and/or assets contained within the property.
How do I manage my mortgage payments with rent?
While we strive to select the most reliable tenants, there’s always a chance that some will miss or be late with payments. Because of this, your end-of-month rent payment from us may occasionally contain more or less than you might expect, which will be a problem if you require every dollar of the rent to make your mortgage payment.
To solve this problem we recommend you pay your mortgage independently from the rent payment to ensure your payments remain regular with your bank. Treat the mortgage as a regular payment and the rent as an irregular income and over a year the two will tend to balance out. On the other hand, if you rely on the rent to pay your mortgage you may well suffer unnecessary financial stress when the monthly payment is due.
Can you sell my investment property?
At Prudential Real Estate, our property selling systems are unique as they have been created with particular focus on serving our landlord clients.
Managing the single largest portfolio of rental properties in Sydney’s South West means that we sell a lot of rental properties for our clients – giving us a real edge in the local market.
Importantly, we ensure your rental income continues as usual during the sale. We make certain the tenancy ends correctly, that all bond claims are properly settled and that the eventual transfer to your buyer occurs without a hiccup.
Our sales systems are designed to create a sale at the best price while also balancing the needs of your tenant, and protecting your interests under the Residential Tenancies Act during the sale.
To find out more or start the process, get in contact with our sales team today!
Inspections and vacating
How do I terminate my tenant?
At Prudential Real Estate, our role is to enforce the Residential Tenancy Agreement that the tenant has signed and our obligation to landlords is to ensure that rent is paid on time.
While for the most part this occurs like clockwork, we have also experienced cases where tenants ignore the arrangements made with the agent and landlord. The only action that can be taken in such cases is through the Tenancy Tribunal (NCAT) – a court specifically set up to resolve tenancy problems.
Should your tenant not pay rent, the law in NSW prescribes that an agent can only issue a termination notice when the tenant is 14 days in arrears. That termination notice must then allow a further 14 days to elapse before any further action can be taken. Hopefully, the tenant will pay their arrears of rent during this time – and most do – which means we would cease action. However certain situations may call for further action, which is determined on a case-by-case basis.
Please be assured that while Prudential Real Estate operates in accordance with the Residential Tenancy Agreement, protecting our landlords from any loss is our first priority. Should you have a question or concern, please get in contact with your property manager at Prudential Real Estate.
What happens at a vacating inspection of my rental?
After your tenant vacates their rental property, we conduct an inspection to determine if it has been left in the same condition as it was when the tenant began the tenancy. In most cases both the property manager and the landlord will attend this inspection with the tenant present.
The purpose of the inspection is to take note of everything that could be of concern to you, which we will highlight with the tenant on your behalf using our bond report. Once the inspection is completed, we ask all attending parties to sign the Vacating Inspection form to record our agreement.
In cases where tenants return the property in excellent condition, the bond is returned and the property marketed for lease in a short amount of time. Please note: tenants are not responsible for “fair wear and tear” or any natural deterioration of the property, in accordance with the Residential tenancies Act 2010.
How and when are periodic inspections carried out?
We arrange to visit the tenanted property within the first 90 days of each tenancy to determine how well the tenant is looking after your property.
This inspection results in a written report being forwarded to you, describing our observations of the property at the time of our inspection.
From this point forward, we will typically inspect the property every 3 to 6 months if the tenant demonstrates they are looking after it. Should we suspect the tenant is not fulfilling their obligations, we will conduct more regular inspections (up to 4 per year is the maximum allowed under the Act).
In every case, the regularity and outcomes of these inspections will be discussed with you, and you may also attend these inspections should you wish to keep up-to-date with any maintenance issues that may arise.