‘Tenant-ready’ your investment home
YOU’VE signed on the dotted line and are now the proud owner of an investment property ... but what happens next?
How does an investment property turn into a rental property?
Real Estate Institute of Queensland (REIQ) CEO Antonia Mercorella said in the 21st century, having a rental property was much more involved than just collecting the rent.
“There are many systems and practices that are required by legislation,” she said, adding that a property manager could help an investor make their investment ‘tenant-ready’ from the moment they bought the property.
“Property managers have a working knowledge of all the necessary legislation and have systems in place that assist the lessor in meeting their legislative responsibilities,” she said.
The Residential Tenancies and Rooming Accommodation Act is the legislation that regulates tenancies. But property managers also have to adhere to other legislation, including the Competition and Consumer Act, and the AntiDiscrimination Act during the rental process.
Under the Electrical Safety Amendment Regulation (No.1) 2006, owners of leased domestic residences have to have a safety switch installed for the power circuit of the residence within six months of a residential tenancy agreement being entered into.
As per the Fire and Rescue Service Amendment Act 2006, every domestic dwelling in Queensland must also have smoke alarms.
“Before a tenancy starts, the lessor must have the smoke alarm tested and cleaned in accordance with manufacturers’ instructions,” Ms Mercorella said.
“During the tenancy, the tenant is responsible for replacing smoke alarm batteries or advising the lessor as soon as possible if the smoke alarm has failed.”
The State Government’s pool fencing legislation requires every residential pool in Queensland to be fenced.
As well as maintaining the fence, the REIQ also recommends lessors have the pool fence professionally checked.
Ms Mercorella says before a tenancy begins, under the Residential Tenancies and Rooming Accommodation Act, the lessor must make sure that the property is clean, fit for a tenant to live in and, together with inclusions, is in a good state of repair.
If fittings such as a dishwasher or an airconditioner are supplied at the beginning of a tenancy, Ms Mercorella says the lessor has a legal obligation to maintain them throughout the tenancy.
Lessors also need to have a good look at their investment property and identify any potential dangers, such as pavers that are loose, or nails sticking out of fences that may injure people.
Any potential safety hazards must be rectified so that the property is a safe place for a tenant to live.
It is also highly recommended that lessors have valid public liability insurance cover (minimum $10 million), as well as building insurance and landlords’ insurance which, depending on the policy, can cover such things as damage and rent default in an investment property.