As a landlord, there are a few things that need to be covered when renting your property. It’s important that you weigh up your costs against your return, especially if you’re buying investment properties, to make sure it’s worthwhile.
First and foremost, make sure you have got yourself landlords insurance. This will protect you from damages caused by floods, fire and other natural disasters. Some policies will cover tenant damage and rental loss as well, so it’s worth shopping around and making sure you get the best policy for you.
Other outgoings that you’re liable for are your council and water rates. Council rates are a landlord’s responsibility and depending from council to council and what your property is worth will depend on the amount you’re charged. Water usage is paid by the tenant, though the service and sewage are covered by the landlord.
If you own a townhouse, unit or apartment which have common grounds and have an owner’s corporation in place, you will also have to pay the annual fees. All properties that are strata titled will attract owners corp fees. These fees will vary from property to property and whether they’re paid quarterly, half yearly or annually will be up to the company in charge.
Any maintenance costs will fall back to you as well. If something breaks down which isn’t the fault of the tenant it’s your duty to have it repaired. Some agents will have a certain amount allocated to spend at their discretion on any urgent matters. All non-urgent matters will be discussed with the landlord and works will be appointed as instructed.
The other costs are your real estate fees. These fees will differ from agent to agent and depending on your final negotiation with your appointed agent will determine the total outgoing to the agency. These fees will include letting fees for placing your tenant, any advertising coatings and the ongoing management percentage taken monthly.
Owning rental properties are a great way to build an income for the future. As long as you are aware of all your outgoings, you can work out the best way to move forward and gain the best returns.
The following advice is of a general nature and intended as an opinion and broad guide. For all legal, financial or real estate advice you should obtain independent professional advice to do with the specific nature of your circumstances before making any legal, financial or real estate decisions.