While engaging a property manager provides convenience, many real estate investors choose to self-manage their rental properties to save on property management fees.
In Queensland, this allows landlords to pocket around 7-12% of the rental income that would otherwise go towards a property manager’s fees.
However, self-managing involves several responsibilities that must be carried out precisely according to the state’s rental laws. Read on to learn how to manage your own investment property.
The Benefits of Self-Managing
One of the main benefits of managing your property yourself rather than hiring a professional property manager is having direct control over what happens. You can carry out regular inspections to ensure your property is well cared for by tenants.
Many landlords are also motivated by the potential cost savings compared to paying letting fees and management commissions to an agent. However, self-management requires substantial time and effort on your part.
Preparing for New Tenants
Before finding tenants, determine the ideal lease terms such as duration, type (fixed-term or periodic), the number of tenants, pet policies, and rent amount based on comparable properties in the area. Consider what type of tenant you are targeting – a family, couple or single person – and what amenities/appliances they may expect.
You must also thoroughly understand your legal obligations under the Residential Tenancies Act 1987 (RTA). This includes providing specific documentation to tenants like the Residential Tenancy Agreement, Information for Tenant booklet, and a detailed Property Condition Report. Non-compliance can result in significant fines.
The RTA also dictates how much bond money and advance rent you can take, as well as how this money must be handled and documented precisely. Seek professional advice if you are unsure about any requirements.
Advertising your property effectively is crucial for attracting quality tenants. Research the costs and exposure of different advertising platforms. Invest in high-quality marketing photos that showcase your property beautifully – these can be re-used for future tenancies.
While professional ad copy is ideal, you can save money by writing the description yourself, highlighting key facts like room numbers, features and nearby amenities.
See also: How to Find Out Who Manages a Property
Tenant Screening Process
Plan viewings at suitable times for your target tenants (e.g. after school for families, evenings for workers, and the like). Have tenancy application forms and sample lease agreements on hand. It’s advisable to not conduct viewings alone for safety reasons.
When evaluating applications, verify that prospective tenants have positive references from previous agents they’ve rented through. Confirm their stated income and employment details are legitimate. Tenant databases used by property managers can reduce risk but involve subscription costs.
Taking the bond payment correctly is critical. Bond money must be lodged with the rental bond authority within 14 days of receipt – it’s illegal to hold it yourself. The bond lodgement form must list every tenant’s name, and tenants must receive a receipt immediately after payment.
During the Tenancy
Under the RTA, you cannot ask the tenant to pay more than two weeks’ rent in advance. Rent receipts must be issued within three days and include the tenant’s name, date, amount paid, property address and period covered.
While receipts aren’t needed for electronic transfers, strict record-keeping is essential as penalties of up to $5000 can apply for mishandling rent.
Before the tenancy begins, you must complete a detailed Property Condition Report (PCR) documenting the property’s condition with written notes and date-stamped photos/videos of all areas, including close-ups of any existing damage. This report is required by legislation – photos alone are insufficient evidence if disputes arise.
The RTA allows for up to four routine inspections per year, with tenants given 7-14 days written notice each time. Substantial fines apply if proper notice periods aren’t provided before entry.
Respond to repair requests within reasonable timeframes. For urgent issues like failed utilities or other hazards, repairs must be arranged within 24-48 hours of being notified as per the RTA. Have a network of reliable tradespeople ready in case of emergencies.
To minimise maintenance costs, consider installing durable, low-maintenance materials like composite decking instead of timber. Choose drought-tolerant native plants for gardens to reduce tenants’ water usage and bills.
Ending the Lease
When ending a tenancy, strict notice requirements under the RTA must be followed based on the specific circumstances. For periodic leases, a 60-day notice is required from the landlord.
When a fixed-term lease is simply ending at its expiry date, a 30-day notice is needed, though if served late the tenant can stay until that 30-day period elapses.
Notice periods and paperwork vary for other scenarios like breaking a fixed-term lease early, if there is unpaid rent, property damage, domestic violence concerns or the premises being uninhabitable. Carefully review the RTA requirements for your situation.
Termination notices are valid if hand-delivered to the tenant, posted (allowing extra days for delivery) or emailed if permitted with an email address specified in the lease agreement.
The Final Property Inspection
When tenants move out, a final property condition report must be completed, comparing the property’s state to the original report done at the start of the tenancy. Any damage beyond fair wear and tear may allow you to make a legitimate claim on the rental bond.
Tenants must be given the opportunity to attend this outgoing inspection, and you must provide them with the final report within 14 days of them vacating the premises. Fines can apply if these processes are not correctly followed.
If disagreements arise over the bond, you may need to apply for a tribunal order to make a claim on it through properly documented evidence.
Seek Expert Advice
While self-managing can allow more control and cost savings, the responsibilities and legal requirements are substantial. Have a thorough understanding of the Residential Tenancies Act and your obligations around documentation, bond handling, condition reports, repairs and terminations.
Don’t hesitate to seek professional advice from property lawyers, accountants or the Residential Tenancies Authority when needed, especially for complex situations involving disputes or tribunal proceedings. Costly fines can apply if you mishandle areas like bond money, entry notice periods or tenants’ rent payments and receipts.
If the self-management becomes too time-consuming or legally precarious, consider engaging a property manager who specialises in residential tenancy legislation. Their expertise reduces risk and can be well worth the fees compared to potential penalties.
See also: Should I Get a Property Manager For My Rental
Wrapping Up
Self-managing your investment property in Queensland gives you greater autonomy over your asset but requires dedicating substantial time and effort to understanding and executing all the associated responsibilities.
By familiarising yourself with the Residential Tenancies Act and following its requirements diligently around tenancy documentation, bond money, inspections, repairs and terminations, you can successfully self-manage while minimising legal risks.
However, never hesitate to bring in professional property management if self-management becomes overly burdensome or legally uncertain.