Becoming a landlord

[Hawkers]

Hi All,
I'm after some advice on renting out a property. Basically how easy or hard it is to do it.
Should I get a real estate agent in to look after it all or is it something that you can do yourself?
What kind of fees would I be looking at either way?

How does it work out with tax as well?

As you can see I'm pretty much in the dark about it all but am thinking it could help my situation for a bit

Thanks

 

[Simon_Nesbit]

Do you live close enough you can visit the property (even just 'drive-bys') regularly?
Do you have time to screen/interview tenants?
Do you have contacts for minor repairs (plumber/electrician/carpenter/handyman) or can you do it yourself?
Can you afford to advertise, insure, etc yourself?

What's more important, your time and peace of mind, or ~10% of rental?

We have gone down both paths, and much better dealing direct, but only with good tenants, and when we were located in the general vacinity.

 

[Hawkers]

Do you live close enough you can visit the property (even just 'drive-bys') regularly?
Wouldn't be a problem

Do you have time to screen/interview tenants?
Didn't think about this part actually. I suppose that would take a fair amount of time to check references etc

Do you have contacts for minor repairs (plumber/electrician/carpenter/handyman) or can you do it yourself?
Woudn't be a problem

Can you afford to advertise, insure, etc yourself?
Advertising shouldn't be too hard in this current climate I'd imagine.
What do you mean 'insure'. I would assume you just need to insure the property (house) but not contents. Is there some other insurance you need as well

What's more important, your time and peace of mind, or ~10% of rental?
Seeing as I've never done it before I think it would be better to pass it onto someone who knows what they are doing if the cost wasn't too steep. Does anyone know the approx. going rate?

I'm currently in the house but am thinking of moving home and renting it out to save up some extra cash.

 

[bunsen burner]

Can you afford to advertise, insure, etc yourself?
Advertising shouldn't be too hard in this current climate I'd imagine.
What do you mean 'insure'. I would assume you just need to insure the property (house) but not contents. Is there some other insurance you need as well

Regardless of which way you go, Landlord's Insurance is a must. Protects you from getting screwed over by a tennant.


Personally, I'd just pay the 9.35% or whatever it is and have a property manager look after it. If they are shit then have a crack yourself. But I'd watch someone else do it first so you know what is involved.

Does anyone know the approx. going rate?

8.5% + gst = 9.35% is a pretty standard rate across all states.

 

[windyhill]

1. Do not do it with friends
2. Do not do it with family
3. Let a property manager handle everything.

 

[Dan26]

I've had three investment properties. Moved into one of them.

I let the real estate agent handle the other two. It takes a load off your mind. Plus they can negotiate a good rent on your behalf, which might be more than what you could negotiate yourself. Plus, all the costs are tax deductable anyway. I'm expecting about a $13,000 payment in mid 2008 with the higher interest rates, meaning more tax back.

I'm into the whole, "Less work, the better" thing. If I don't have to waste my time with the property and I can just let the rent come in, then I'm happy. Let the agent handle it. It's what they are paid to do. One agent (Barry Plant) gets 6.6%, the other (Roberts Real Estate in Tasmania) a bit over 8%. I'm currently looking to change agents in Tassy.

 

[Hawkers]

Thanks for the replies

So the order I should do things is

Talk to my Tax Man
Talk to Insurance
Talk to Real Estate Agent

Do I need to tell my mortage provider?

 

[Simon_Nesbit]

Yeah, 8-10% for Agents fees, plus allow for at least 2 (preferably 4) weeks of vacancy each year.

Mortgage provider might depend on initial purpose of loan.

If you are over 80% LVR (borrowing/total value) then you could get into trouble, as it gets more complex. Less than 80% and most places have the same/similar offer for investment properties as they do for your own home.