6 Character Traits to Consider When Looking for a Tenant

Finding a reliable tenant is one of the most important parts of being a successful landlord. The kind of person that lives on your rental property is one of the biggest factors that determines how straightforward or problematic your overall landlord experience is. Doing your homework and interviewing potential tenants is obviously very important, but there are certain patterns in terms of personality traits that you should also keep in mind. This article will discuss just a few of them that you may not have considered. 

What to Look For

Stable History

Someone with a stable job history that has made long-term rental commitments in the past is possibly the most important thing to look for in a tenant. If they’ve been at their current job for a long period, it may also be a sign that they’re looking to stay in the area, rather than changing cities or suburbs in the near future. The type of employment is also important; whether their work is ongoing or contractual, for instance.

Well groomed

It may seem slightly superficial, but a tenant who is generally well presented is often more likely to be reliable and dependable. Whether it be the way they dress or their general cleanliness, someone’s appearance can say an awful lot about the kind of person they are and importantly, how they live. If it is clear they look after themselves, chances are they’ll look after your property too.

Pet Owner

Understandably, many landlords will not allow their tenants to keep pets; often the property simply isn’t appropriate and can be bothersome for other residents in an apartment building, for instance. Further, some landlord insurance policies may not cover pet damage. So this may not apply to everyone. But some experts suggest that renting to pet owners can actually be a good way of entering into a long-term arrangement with a tenant.

When most landlords have strict policies concerning pets, allowing your tenants to have pets on the property can be a way to encourage them to stay. After all, they are less likely to find a suitable property that fills this requirement.

Interestingly, research shows that dog owners tend to be more secure and risk adverse. While this is a generalisation, it can be a sign of the kind of person you’re dealing with and potentially someone that is going to stick around for long.

What to Avoid

 

Unorganised

Over you can get a sense of the kind of person they are simply by how they approach the interview process. Prompt response times and punctuality when setting up the meeting can be a sign that they’re well organised, whereas someone that is all over the place and a little frantic may be a little more tricky and unpredictable. Asking about the tenant's life can give you an idea of how much drama they may be dealing with and how reliable they’ll be down the track.

Wanting to move straightaway

Again, this is by no means a hard and fast rule, and tenants that are wanting to move in within a few days may be a godsend for you as a landlord, but often pushing tenants that seem overly eager to get everything moving quickly may not be the most desirable tenants. Why do they need to move in so urgently? You should consider their current living situation, as it may be that they are being kicked out or not giving their current landlord enough notice, which says something about their character. This could be a sign of a chaotic lifestyle, or there could be a legitimate reason. It really depends on the context.

Incomplete applications

If the tenant hasn’t bothered to complete the tenant application, it’s generally not a good sign. There really isn’t a good reason that someone wouldn’t complete an application if they are serious about becoming a tenant. Also, you may notice that they are providing contradictory information in terms of what they’re telling you about their life, and what their application says. Applicants that can’t keep their story straight may be problematic. This should be regarded as a red flag and a sign that you probably want to avoid this kind of person. Click here to learn more about what qualification you should look for in a potential tenant.

These characteristics and traits can provide you with a general idea of what kind of person you’re dealing with, but they should be considered in context. Getting to know the person in an interview setting can provide you with a good idea of what you can expect from them, so trust your instincts. If you’re after more advice about being a landlord or want to have a chat with a landlord insurance broker to learn more about landlord insurance in Australia, give the team at SGUA a call today.

 

3 Property Maintenance Pointers for Landlords

There are many aspects to managing a rental property and a lot of organisation needs to be done in order to ensure things run smoothly from start to finish. Whether it’s screening tenants, finding suitable landlord insurance and getting your property in good condition as per your legal obligations, this can be a process that takes time and effort. This is particularly the case for older properties, where there may be the need for repairs and in many cases ongoing maintenance. In this post, we’ve compiled a few helpful maintenance tips that you should keep in mind.

Establish a Good Relationship with Your Tenant

Honest communication between yourself and the tenant is one of the most important things when it comes to ensuring a healthy ongoing relationship. It is always important as far as ensuring that you are up-to-date with the status of your property. If they notice or cause, or think that something is in need of repair, you need to know.

A smart tenant will let you know, as it is in their best interests to do so, but there are that may simply not know what to look for. You can provide basic information to your tenant to ensure they have a general idea of when you need to be contacted and most importantly, what they need to do in order to keep the home in good shape and running for longer. Often, first-time renters may not be aware of these things and it’s up to you to educate them.

Regular Inspections

While they can be inconvenient for some tenants, you have a right to inspect the property at regular intervals. The frequency and notice that needs to be given for this inspection should be stipulated in the tenancy agreement and can vary on a case to case basis. Regular inspections are one of the best ways to check for damage, potential corrosion, leaking, etc. that may be harder to spot for the tenant and thus they may not even be aware of it. As well as thoroughly inspecting the property after a tenant moves out and before a tenant moves out, inspections are also very necessary and can help you deal with repairs more quickly.

Factor Repairs into Your Financial Considerations

While this won’t necessarily help you maintain the wellbeing of your property, this is no less important. There is a tendency for less experienced landlords to underestimate how much repairs in the future can factor into over profit, so make sure you don’t overlook this. It can be instrumental in determining your profitability in the long run and can help you make more informed decisions. Another very important consideration is to avoid putting off repairs that are pending. Nine times out of ten, this ends up costing you more money as it may well worsen and require more work in order to be properly repaired. This is exactly why you need to budget for these repairs that may be required in the future. When you’re prepared and aren’t caught by surprise, you’re more likely to deal with the issue quickly rather than having to get the money together or simply putting it off.

This article has mentioned a few property maintenance tips that can help make your job easier as a landlord. Keep them in mind going forward and you’ll be a lot better off. If you need to discuss your landlord insurance policy or you’re looking for more general, feel free to give the team at SGUA a call today for a discussion about landlord insurance policy. Keep an eye on our blog for more helpful maintenance tips in the near future.

5 Things You Need to Know when Starting Out as a Landlord

Being a landlord and managing your own property can be a time-consuming and often difficult task if you’re not properly prepared. It’s always a good idea to educate yourself a little beforehand and find out exactly what the job requires. This gives you the best chance of being able to manage the requirements that come with being a landlord. This article will go through a few of the most important considerations and things you need to keep in mind as you go through the process.

Legal requirements

It is absolutely imperative that you understand the legal responsibilities of yourself as landlord and that of your tenant. Common law dictates that landlords have a duty to guarantee the safety of rented property and its contents and there are also laws and regulations specific to rental properties that must be followed to the letter.  To make matters more complicated, each State in Australia has its’ own specific requirements.

Information is available from each state’s relevant body along with forms and guides to assist you to be in a better position to protect your interests and fulfil your obligations as a landlord.

Screening your tenant

There is nothing that makes a property owner’s life simpler than having great tenants and no greater nightmare than bad ones,  so here are some screening tactics that have been proven to work;

1. The screening process starts when you meet the applicants at the property.  How they respect the property provides a fair indication of how they will continue, but always trust your gut and bypass them if you feel they are not genuine.

2. Use a comprehensive Tenancy Application form that requires the tenant to provide 100 points of Identification, Proof of Income (3 x recent payslips & bank statement), Employer & Personal references, and details of their current Property manager and their rent ledger if they are current renters. Once you have all the information, screen it ruthlessly.

3. Asking the right questions is key to getting the information you need, some useful questions are; Current Agent: Did they look after the place, was rent paid on time, did you refund their bond, would you rent to them again?  

• Work Reference:  Verify income with Payroll and ask to speak with the applicant's supervisor.  Good employees generally make great tenants so you want to know if they are they reliable and if they have job security
• Personal References:  You will usually get a glowing reference here, but the question to ask is “If you had a rental property would you rent to them?’ If there is no hesitation in saying yes, its’ a good sign. Finally, we recommend the use of a Tenancy Database such as TICA to check that the applicant has no previous history of rent default and/or damage.

Choosing the right tenant can save you a lot of unnecessary heartache and stress, so it’s definitely worthwhile spending some time on getting this right.

Property maintenance

There are certain legal requirements on the part of the landlord to ensure the property is well maintained. So as a landlord you need to be aware of potential problem areas in the home and have an idea of how and when they will need to be dealt with. 

Landlord responsibilities include: Maintaining the structure and exterior of the house; ensuring all 'installations' are working, such as gas, electricity and heating; Installation and appliance maintenance and safety. Please note: only applies to landlord-owned appliances; Treat potentially health-threatening issues such as rising damp; anything else that's stipulated in the tenancy agreement

Not to mention, future maintenance considerations need to be made if you want to be sure of your future income and the profitability of your rental property. Quite often it is overlooked by new landlords, however, maintenance costs should absolutely be factored into the equation.

Taxes

Tax is a tricky subject at the best of times, and managing a rental property will certainly complicate your tax situation. Broadly speaking, the income you earn from renting out your property is added to your income tax, but you also need to consider the expenses that you can claim as deductions and possibly capital gains taxes when you sell your property.  

It is also worthwhile to consider having a Depreciation Schedule prepared which enables you to claim against the reduction in value of items such as carpets, curtains, stove cooktops, some light fixtures, shower heads and so on.  Landlords can claim between 10 percent and 40 percent off a variety of depreciable items, and in many cases, up to 2.5 percent of the building cost of the investment home on an annual basis.

Have a chat to your accountant about way you can maximise your tax benefits of your investment property.

Landlord Insurance

Ensuring that you have an appropriate insurance policy in place for your property is of vital importance and you need to carefully choose a policy that offers you the right coverage with respect to the type of property and its value. Remember that landlord insurance is quite different than standard property insurance, and generally offers more coverage to protect your interests, especially when it comes to your legal liability.  Keep in mind that when you’re collecting property insurance quotes, make sure you’re comparing apples to apples, especially when it comes to levels of cover and the excesses applicable if you make a claim.  Take the time to fully understand what you are covered for and more importantly, what you are not covered for before deciding to go ahead with your policy.

We’d highly recommend doing further research on these topics, educating yourself is the best way to ensure you’re prepared. If you have any queries about landlord insurance or you’d like to chat to a professional, contact St George Underwriting Agency today.

General Disclaimer

The information contained in this article is general information only and does not constitute legal, financial or compliance advice. We recommend that you obtain your own independent legal advice about all matters relating to the ownership of investment property.

Common Landlord Mistakes You Need to Avoid

Like a lot of things in the business world, being a good landlord both for your tenants and in terms of managing your own investment, is something that you often learn with experience. First-time landlords will often make simple mistakes and in some regards, this is to be expected given that this can be a demanding role to take on in many cases. In your position as a landlord, you are essentially managing people, risk and finances too, so it can certainly be a challenge for a lot of people. This article goes through a few of the common errors that landlords can make, with some suggestions on how to avoid them.

Not Understanding Your Insurance Policy

Taking out landlord insurance is an absolute must whether you’re renting out your property, flat or holiday home, and a general knowledge of what you’re covered for is essential.

Working with an insurance company that explains things clearly and works closely with you is always a big help. They can present you with your options and make a suggestion or recommendation that best suits your financial situation, the size of your investment and other factors. But it’s also up to you to make sure you read the fine print and know exactly what it is your covered for; do your homework, understand your policy and you’re in a better position to keep yourself protected and understand your rights as a landlord too.

Not Giving Proper Consideration to the Circumstances of Tenants

More often than not, having to deal with and manage an unreliable tenant or someone with money issues can be a massive headache. Without the proper insurance, this situation can be a strain on your finances and cause a great deal of stress.

It’s mandatory to check your tenant’s ability to pay; just make sure you don’t overlook this and write it off as nothing to worry about. If you see any red flags, it’s important to think carefully about your decision. Ask previous landlords how they were to deal with and check out all the references provided - in short, do your homework. Choosing the right tenant can make all the difference so take the process of selecting your tenant seriously.

Underestimating the Effect of Maintenance Expenses to Profitability

If you want to be successful in this, renting out property should be approached as you would approach the running of a business, rather than a side project. Figuring your expected revenue and costs etc. is very important if you want to be profitable in the long run. There is a tendency on the part of first-time landlords - and often inexperienced business managers in a number of industries - to underestimate how costly maintenance can be over the years.

When it comes to your property, failing to properly predict this can be an unexpected and unwelcome strain on your finances; getting it right can help you make better investment decisions in the future. Whether it be damage from water, pests or general wear and tear, the costs can be quite high, so make sure you account for them.

Also, remember that it’s very important to be prompt of any repairs that are required. Failing to do so and neglecting things that need to be done can result in big problems if the tenant is put at risk as a result.

Not Having a Lawyer

Quality landlord home insurance for your rental property can help protect your interests and ensures that you have professionals in your corner. However, it makes sense to have an ongoing relationship with a lawyer to ensure that you're looking after if things between you and your tenant do happen to take a bad turn. Have a lawyer draft up the legal contract from the outset so they are aware of the circumstances and have some idea of the case if problems do arise down the track. It can save you a lot of stress, time and money if you already are prepared from a legal standpoint and have protected your legal interests with the help of an attorney.

If you are a new landlord, keep these considerations in mind. Ultimately being a good landlord comes down to preparation and organisation, doing what’s necessary not only to protect your interests but to ensure you are profiting in the long term. For more information in regards to the best landlord insurance in Australia, speak to the team at St. George Underwriting Agency today for a discussion about your needs.

Why Do You Need Landlord Protection Insurance?

If you are a landlord and are looking to protect your investment then waiting until it’s too late may end up costing you much more in the long term. Landlord insurance may be able to cover you for a number of issues such as burst pipes and roofing deterioration, as well as protect you against loss of rent if an issue may ever arise. But do you really need it or not?

Any insurance salesman will tell you that having insurance and not needing it is much better than needing it and not having it, and in most cases that are true. Who knows what the future holds for you, your tenants and your property with a number of issues that can arise over both long leases and multiple tenants being switched.

Protect Your Property From Specific Dangers

Many landlords suffer a few problems during their tenant leases with general household problems such as leaking roofs, burst pipes or worse. These can often be resolved simply and easily, but if your rental property suffers from something a little more serious, you could lose rental income for a number of weeks and even months while the problem is being rectified.

Insurance covers most of these general eventualities, as well as a number of unforeseen circumstances in which you may have no control. Some insurance packages include being insured through loss of rental income when a tenant does not pay rent, or when a household issue arises that means the tenant has to be moved into an alternative property.

Many of these landlord home insurance policies allow the landlord to claim monies on rent default where a tenant refuses to pay rent, or where a tenant causes malicious damage to the property. This also includes theft by the tenant from a multitude of items that can be added to your policy for safe coverage.

Recover the Costs of Loss of Rental Income

Landlord protection insurance can be similar to residential insurance in that it protects the building against a number of unforeseen events such as bushfire, weather and storm damage and other regular issues, but also adds in the policies of loss of rental income, and other unique events that arise if damage is done to your property and the tenant can no longer live there due to damage, fire or other, you can claim loss of rent from the insurance policy to keep you from losing out for the second time.

It is these policies that make landlord protection insurance one of the most popular additions to regular insurance once a landlord starts renting out a property. Aside from the confidence, it gives a landlord in renting out the property in terms of accidental damage, it also allows the landlord to further invest in the property without fearing larger losses.

Many insurance professionals are out there to help you decide which policies suit your property the best and can help decide on the costs of the policies you will be covered by. A full protection may be overkill in some places, but with the option to pick and choose from a range of policies, you will be able to fit the insurance burden into your budget and find that it will pay off in the long run.

When you balance out value for money and the level of protection you and your property will enjoy when opting for landlord protection insurance, you may find that it is a small price to pay for the benefits that it brings. There only needs to be one thing that goes wrong with your property to put your future of property landlord at risk, so act on to avoid an avoidable situation. For more information about landlord protection insurance visit St George Underwriting Agency's website.

How To Avoid The Loss Of Rental Income

One of the most important factors in being a landlord is doing everything possible to ensure that your tenants do not fall behind on their rent. For many new landlords, losing rental income can mean the loss of mortgage payments and possibly more. Luckily, there are ways you can protect yourself and ensure that your chance of having to deal with the loss of rental income is kept at a minimum. 

Ensuring that your tenants are financially sound is a great place to start, and there are a few ways to confirm that the people renting your property to are able to keep up with payments. First, as a private landlord, you can try a credit check with your tenants’ permission to see how well a possible tenant deals with repayments over long periods of time. While a credit check may not tell you the whole story, it will alert you to any unusual activity that you can talk over with your tenant which may also give an idea about what type of landlord insurance policy you require for your safety.

Knowing If Your tenants Can Afford The Rent

Asking for proof of income is the first step in seeing if the tenant can afford to rent the property. Requesting the tenant to note down their regular payments and bills will give you an insight into how well the landlord and tenant relationship will span out financially.

Always check the day that your rent payment is due on your bank account, and set up an alert with your bank to notify you of any payments being made on that day. Check throughout the day to ensure that a payment hasn’t simply just been delayed due to unforeseen circumstances, and allow the tenant the full business day to make the payment. 

If a payment hasn’t been made, first check with your bank that there are no delays for payments, or that the payment is currently processing, and simply notify your tenant that the rent due date has passed. A simple text might be all it takes to alert the tenant of the due date. 

If this is a regular occurrence, where your tenant is often late with a payment, talk to the tenant about arranging with their bank an automatic payment to leave their bank on a specified date.

Employ A Property Manager To Engage With Your Tenants

 

If you own a number of properties, it may be worth your while to hire a property manager who specialises in tenant liaison and will deal directly with the tenants and notify you of any issues that need to be dealt with.

If a tenant has not made payment by an agreed time frame then as a landlord you have a number of options to speed up the process and mitigate any losses you may encounter if the tenant refuses or is unable to pay. 

You should issue a notice of non-payment of rent and rent arrears if the tenant has not paid rent after 7 days (or 5 days for a caravan property). This notice is a “Notice to remedy breach” which gives the tenants 7 days to pay the arrears (or 5 days in a caravan park). If the tenant pays the arrears within this time frame, the tenant is able to continue the original tenancy agreement as normal.

Issuing Official Notices

If the tenant doesn’t pay the due monies within the allotted time frame, the landlord can then send the tenant a “Notice to leave”, which gives the tenant a minimum of 7 days to vacate the property (or 5 days in a caravan park).

If the tenant then pays the arrears within this 7 day period, the tenant can apply in writing and request that they remain at the property, which is up to the discretion of the landlord to allow the tenancy to continue, and accept in writing.

Get Help From Your Local Authority

If the tenant doesn’t pay the monies due and doesn’t leave the property, then the landlord can lodge an “urgent application” with the local authority, such as VCAT in Victoria, for a warrant of possession to enforce the tenant to vacate the property. Similarly, you can also opt for rental property insurance to protect yourself from tenant’s arrears.

Staying on good terms with your tenant is the best way to ensure rent is paid in full and on time, but if things go wrong, and rent arrears start to accrue, following these steps will allow you to deal professionally with your tenants, whilst keeping you on the right side of the law, and hopefully recuperating your rental income in full with minimal losses.

Speak to the expert team at SGUA for more information.

Why Do I need Landlords Insurance?

If you have decided to rent out a residential property you should consider landlord insurance.  Standard home insurance policies are often inadequate to cover you for situations which may arise from owning a rental property. Landlord insurance is designed to protect your investment against the unique risks associated with renting the property to tenants.

Malicious, Intentional, Deliberate Damage

One of the biggest expenses an Owner may face if not insured is caused by Tenants who maliciously damage the property.  This damage can be extensive and can be spread through the entire house.  Then there are tenants who put up numerous hooks on the walls and those that paint walls & make alterations without permission and whilst not vindictive can be costly to put right.

We provide up to $60,000 of cover – Excess free

Accidental Damage

While the majority of tenants don’t set out to cause damage, accidents do happen, just like they happen in your own home. Accidental damage is defined as a sudden unexpected event which is unforeseen and unintentional.

You are covered for up to $60,000 – $250 excess per event (capped at two)

Legal Liability

As an owner of an investment, you are exposed to the possibility of personal injury claims.  The abundance of “No Win – No Fee” legal services, has made making a claim easier.  Whether you are found liable or not, the costs associated with defending against the claim can be significant  

Our policy covers you for up to $20 million in liability cover, which includes the payment of damage awards, as well as lawyer fees and costs incurred against lawsuits.

Rent Default

Your Property Manager is a trained professional who actively seeks to place trustworthy tenants in your property.  However, even with the best of care, things can go wrong.  Tenant’s situations can change.   Events such as illness, loss of a job and marital breakdowns can cause even the best of tenants to struggle to meet their obligations.

We cover up to 15 weeks of rent for any tenant rent default situation including absconding tenants, failure to pay rent, tenant hardship, the death of a sole tenant and more – all completely excess free.

Loss of Rent

Recent natural disasters in Australia have highlighted the need for this type of cover.  Many properties have been severely damaged in recent times by fire or flood. Damage can also arise from a range of events such as Fire, storm, burst pipes and more. Tenants are immediately and automatically released from their obligations if the property becomes uninhabitable. The loss of rental income can quickly become a financial issue for the landlord.

Where an insured property is damaged by an insured event to the point where it is uninhabitable, we cover the loss of rent for up to 52 weeks with up to $60,000 of Landlord’s Contents Cover.

With the annual cost of the policy being less than a week’s rent and also qualifying as a tax-deductible expense, it makes perfect sense to ensure that your investment property is protected.

Landlord insurance can be compared to car insurance – would you hand the keys to your car to a complete stranger without it?  Don’t hand the keys to your investment property to a stranger without having some protection in place. 

St. George Underwriting Agency has been specialising in providing Landlord insurance for nearly 25 years, providing protection against financial loss.  For more information about how we can help protect your property, call our friendly team today or visit our website to learn more about landlord insurance.