One of the many ways to make money through real estate is via rental income. This is the process of renting your property out to suitable tenants who pay a regular fee for the living space.
The position of a landlord is one with plenty of responsibilities. As you own the property, you’re responsible for the large majority of maintenance, tax and legal obligations, among other things.
You’ll also need to keep track of the market’s movement, as any significant change to the real estate market can have lasting consequences for your rental income. Rental valuations in Perth tend to be a hugely beneficial tool for landlords as they navigate through the world of renting out real estate.
What obligations do landlords have?
In Perth, the obligations of the landlord are governed by state laws alongside common principles applicable across the country. The requirements of the landlord are in place to protect the rights and safety of tenants. A few of the key obligations are:
Provide a functional and habitable property
It is the responsibility of the property owner to ensure the living space is structurally sound, protected from water damage and leaks, free from mould, pests, or other potential health hazards, and ultimately functions as an appropriate residential property. Additionally, all basic amenities must be working, such as electricity and water.
Maintenance and repairs
Landlords are also responsible for all maintenance and repair obligations. Any issues that arise via normal wear and tear must be addressed by the landlord hastily maintain the habitable living space. A property owner who fails to do so can result in the tenant seeking assistance from a local authority.
Safety and security
Any property being made available for rent must have reasonable safety and security features in place. Functional locks, smoke alarms, and occasionally even safety switches are required. A tenant should feel reasonably safe in the residential property they’re renting.
While landlords must stay on top of responsibilities, they should not be overly hands-on and invasive of a tenant’s privacy or time. Always provide proper notice and schedule appointments for inspections or meetings regarding the property.
Legal and tax compliance
As the owner of the property, landlords must ensure the property complies with all laws and regulations. Any related tax payments must also be submitted on time. Lack of compliance and late payments can lead to penalties and possible legal consequences.
Providing tenants with documentation
Tenants need proof of the residential tenancy agreement and a clear outline of their rights and responsibilities. Landlords are obligated to ensure that tenants have all the necessary documentation.
A landlord is bound to all anti-discrimination laws. Tenants cannot be refused based on race, religion, gender or disability. Non-compliance to anti-discrimination laws can have grave legal consequences and ruin your reputation as a landlord.
There must be dispute resolution processes in place in case a dispute arises between the landlord and the tenants. Scheduled discussions and perhaps even mediation can be sought to resolve disputes peacefully.
When the tenancy is ending or being terminated, a notice must be provided to the tenant to allow for proper planning.
Rent and bond payments
Landlords have to follow the agreed-upon rental payments and frequency of payment as outlined in the contract. They are also required to submit the rental bond with the relevant authority which in turn serves as a security deposit for the property and is refundable at the end of the tenancy.
How do property valuations help landlords?
One of the most valuable tools available for landlords is rental valuations. They offer a range of benefits, including:
A definitive and clear understanding of market value
A valuation report gives a landlord insight into their property’s existing market value. This is critical for effective decision-making and strategic planning regarding rental rates, potential sales, property management, notable issues, and more.
Setting fair and reasonable rental prices
Valuations provide key insight into the rental market conditions of the area and help owners set rates that are competitive, reasonable and fair. A clear understanding of the market allows landlords to maximise rental income while maintaining appropriate pricing.
Tracking changes in value
By getting regular valuations, landlords can monitor any changes in the property’s value. As such, they can review the performance as an investment and make informed decisions regarding the property going forward. For example, a low valuation may drive an owner to implement renovations or upgrades to a property.
Equity refers to the difference between a property’s market value and the outstanding mortgage amount. Positive equity means the property’s value exceeds the mortgage, often a sign of a positive investment. Valuations give landlords the tools to determine the exact equity they hold in a property.
If a landlord is hoping to secure additional financing or would like to refinance existing loans, valuations are needed by financial lenders to determine the loan-to-value ratio. This helps lenders to determine the loan terms to set.
As an owner of real estate, a landlord needs to ensure all property taxes are paid on time and accurately. Valuations provide owners with a clear outline of the amount of property-related tax to pay based on the value of the property.
Being a landlord isn’t an easy task. The role requires dedication, hard work and a lot of your time. As a landlord, your obligations are plenty, and meeting them is absolutely critical to long-term success.
A few of the key responsibilities landlords have include creating a habitable space, installing safety and security features, respecting privacy, dealing with issues and disputes, providing notice periods regarding leases ending, taking care of repairs and maintenance, complying with anti-discrimination laws, providing documentation, and sticking to written agreements.
Property valuations are a popular service among landlords. They offer plenty of benefits. These include a clear understanding of market value, helping to set reasonable and fair rental prices, complying with property-related taxes, tracking changes in value, applying for refinancing, and analysing equity.
If you would like to learn more about independent property valuation services in Perth, we’re only one phone call away. Feel free to reach out today to speak to one of our highly qualified team members.