As a landlord there are a few outgoing expenses you should be prepared for and always ensure you have spare funds to cover. Maximising an offset account is best to keeping additional funds in preparation any upcoming expenses. As a rule of thumb, we suggest basing your budget of 48 rather than 52 weeks' rental income to account for any repairs and maintenance, and to cover any costs associated with the changeover period between tenants.
Repairs and Maintenance
Regardless of whether the property is new or older, repairs and maintenance are part of your responsibility as a landlord. And the fact is, they can crop up when you least expect them.
The best way of mitigating repair and maintenance costs is to work with your property manager to understand exactly what condition your investment property is in and what may need attention in the future.
Property Compliance
Meeting property compliance is a must as a landlord, and this means taking the steps to ensure compliance checks are conducted before the start of the tenancy and/or regularly conducted.
- Smoke alarms are required by to be checked annually to confirm they are meeting compliance standards.
- A water efficiency certificate is also a must if water usage charges are being billed to the tenant.
- Cord blind compliance is essential to ensure blinds within the property are being fitted to the wall or shortened to 1.6m from the ground to prevent any choking hazards for small children.
- Deck and balcony safety is also important to ensure that it is not unstable and/or made from inappropriate materials that could cause the balcony or rails to collapse eventually.
- Swimming pools and spas will require fencing that meet the requirements set out in the Swimming Pools Act 1992.
- Landlords are also obligated to maintain locks and safety devices to ensure the safety and security of the tenants.
- Electrical and gas safety are for landlords to ensure that there are no electrical repairs needed at the property prior to tenancy. Also, it's important to ensure that all gas appliances have been installed by a licensed gas fitter and that they are regularly serviced to make sure they are in working order and the devices follow the correct efficiency labelling and standards to remain complaint.
- Landlords must also ensure the property is free from pests, vermin, and mould. This will require landlords to book in annual pest inspections to check if there is any pest issues going unnoticed or unreported.
- Window compliance is required, and locks must be installed on windows as well as window safety devices to prevent the risk of failing, especially for children.
Council rates
This ongoing expense will be charged in quarterly instalments, and these payments go towards public services and infrastructure in the local government area.
Water rates
Landlords must pay all water supply service charges and all sewerage supply service charges. The landlords may only require tenants to water usage if:
- the property is separately metered,
- the charges are not more than the amount the landlord is billed for by the water supplier and,
- If the property meets the 'water efficiency' standards.
Strata Levies (if applicable)
Strata levies are fees that cover expenses such as building insurance, maintenance and utility costs of common areas and amenities, garden maintenance and general maintenance, management fees and other projects and repairs. Be mindful that strata levies can increase overtime.
Insurances
It is important to ensure any unforeseen damage, loss of rent and/or legal liability is covered by insurance to protect you and your finances. This means that as a landlord, you may need to invest in insurances such as landlord, building and/or contents insurance.
Have more questions about your investment property? Want to ensure you are maximising your returns? Why not see the difference a dedicated team of property managers makes? For a free copy of our Property Investors Guide or an obligation-free chat, email our Director, Casey Healey, on casey@c21newcastle.com.au or phone 02 4943 6333 today.