Property Investors - Commonly asked Questions

What is Landlord protection insurance?
What happens when a tenant is behind in rental payments?
Are rental inspections necessary?
How do you select the right tenants?
What is a property condition report?
Why is it necessary for a property condition report?
What is a routine inspection?

What is Landlord protection insurance?

It is strongly recommended that you as the landlord take out landlord's protection insurance. This type of insurance should cover you for loss of rent, malicious and accidental damage, legal fees, liability claims and damage to contents. Many different companies can arrange such insurance however the policy will vary so it is wise to shop around and find a cover that provides the very best protection. BEWARE of the fine print and the hidden excesses.

What happens when a tenant is behind in his rental payment?

It should be reiterated to all tenants that a zero tolerance policy is standard with regard to rental arrears. If a tenant does fall behind with their rental payments it is important to act immediately without delay. Our policy is as follows; day 1-2 they will receive a phone call or SMS requesting that they rectify the arrears immediately. Day 4 they are issued with a notice of breach advising them that they are behind in the rent and that they must pay immediately. If payment is not forthcoming within the stipulated time, then a second notice of breach is issued at day 8 requiring that they pay within 14 days or vacate the property. If the second notice is not rectified, we will notify you the landlord seeking further instruction and if necessary apply to the court for vacant possession. If we have situation of repeat offenders we will issue a notice to vacate without warning, if a tenant receives more than three in a 12 month period we recommend to our clients that we terminate the lease.

Are rental inspections necessary?

Inspections are extremely important, not only ensure the tenant is looking after the property as outlined in the signed lease agreement but also to ensure the property is well maintained to retain/increase the capital value and avoid costly repairs.
If a tenant is not looking after the property satisfactorily then a breach may need to be issued outlining what needs to be rectified. As a landlord you should be notified about the breach and the time frame set for the tenant to rectify the problem. If the problem is not fixed, the tenant will be asked to vacate the property by issuing a termination notice. Inspections encourage the tenant to maintain an acceptable standard of cleanliness and presentation. A detailed report should be completed and dated in the event you require a record in the event of insurance claims or claims against the tenant.

How do you select the right tenants?

Potential tenants are traced through the national tenancy database if a tenant that has defaulted in the past through a real estate agency that subscribes to the tenancy database will have these instances recorded. These databases should help reduce the chances of getting a tenant with a bad track record. All references are checked and recorded including previous rental managers and private landlords and to ensure the references are legitimate we research the government list to confirm ownership of the stated property as standard protocol. We also require 100 points of identification and a recent original copy of the applicant’s credit history report.

What is a property condition report?

This is a report compiled at the start of a tenancy prior to the tenant moving in. The report outlines the condition of the property at the commencement of the tenancy and is used as a reference to ensure the property is left in the same condition.
At the completion of the lease agreement the property condition reports are compared to the condition of the property once the tenant has returned the keys. From this point the property is assessed and should be in similar condition as when the tenant moved in.
At this point any items that need to be rectified by the tenant in order to meet previous property condition reports can be attended. It is important to include the state of cleanliness as a part of this report to avoid disputes.

Why is it necessary to have a property condition report?

A thorough check room by room, collaborating a record of marks, scratches, walls including paint colour, holes, state of carpets fixtures and fittings etc. It is very necessary to give an accurate assessment of the overall condition of the premises. It is just as important that both tenant and landlord agree on the condition. A property condition report can take many hours to correctly asses. At the end of the tenancy, after the bond is completed, the property condition report is updated. The report is used to cross reference the condition of the property upon the tenant vacating. Without these reports and stringent processes it is very difficult to claim any damages or neglect. As a part of our practice we also take up to 100 photos internally and externally to provide a visual report of the condition that includes gardens and outbuildings.

What is a routine inspection?

These inspections are essential to ensure that your property is being maintained to an acceptable standard to identify any maintenance that maybe required. A copy of the inspection report should be forwarded to you after each inspection and you should also receive a telephone call to discuss the outcome. Routine inspection should be carried out at lease 3 times a year or even more frequently depending on how wel the tenants are caring for the property.