You just bought your first investment property. YAY!
Assuming you took it in vacant possession; you now have to look for a tenant.
Make sure you take quality photos of the inside and outside and make it feel welcoming.
You will already have an idea how much the house can rent for but you might want to get a rental appraisal. Then the next step is to ADVERTISE.
Generally, this would involve
- Posting an ad on Trade me and
- Listing your property with rental agents.
At the time of writing, it will cost you at least $99 to advertise on Trade me. This will depend on how much the weekly rent you are asking for and whether you choose to use their bonus advertising features.
The beauty of listing with rental agents is most don’t charge you anything. Barfoot & Thompson usually charge you a listing fee but Century 21 and smaller rental agents offer to market your house for rent for free. This is because the tenant will pay the rental agent’s costs (usually one weeks rent + any administration costs). Plus you often get the benefit of reference checks which the rental agent performs for you the landlord. And all this is paid for by the tenant.
Before choosing your tenant from a list of applicants:
- Find out their motive for leaving their previous tenancy. Did they have a poor relationship with the landlord or was it because they could not afford the rent?
- Find out how long they intend to stay. If your tenants turn over every six months, it can seriously cause wear and tear to your home (carpets, walls and entrance). Remember the most damage is caused when furniture is moving in and out of a home.
- Ask applicants to provide you references. Usually your rental agent will do this for you as part of the vetting process. Verify their income is sufficient to cover the rental payment.
- Make it clear upfront whether you allow subletting. Sometimes a couple may rent a 5-bedroom house and then use 3 bedrooms and rent out the rest. If you don’t allow subletting, state it in the tenancy agreement.
- Require the successful applicant to pay a bond which is deposited with the Department of Building and Housing.
Lastly, remember you cannot discriminate based on race or religion.
Owning an investment property can be rewarding but managing it can be time consuming. That’s why some investors find a property manager to look after their investment.