You met your goal of rent my house in Australia but how would you feel if you find your apartment painted neon green on your next visit? This isn’t so bad, unless you’re the landlord. The culprit is your tenant, who was gracious enough to do repaint the walls for you. Being a DIY landlord is easy if you cover your bases and thread out loose ends.
What can you do when life gives you a lemon? You squeeze it and chalk it up to experience. Avoid mishaps by including these terms in the rental agreement. Even if you’ve filtered applicants like a lion picking out prey, it’s still possible the one you choose ends up a disappointment. This is why your terms of agreement need to be rock-solid and watertight.
Here are six terms of agreement crucial in for rent by owner properties:
Term #1: Names of every tenant
If multiple tenants are sharing your property, then everyone should be accountable and responsibility. Shared space has its limits, often within the bounds of hangouts and sleepovers. It’s a different story if you have what’s pretty much like the entire cast of Friends couch-surfing in your apartment without your permission. It’s important everyone is present during the walkthrough and upon signing.
You need the names of each tenant when you finally choose who’ll say yes to your rent my house ad. Every tenant indicated on the terms of the lease is responsible for the full amount of the rent, also on the state of your property. This means you can hound one tenant for the entire rent, even if others skip or move out. You can also end the tenancy for everyone with due cause. How’s that for evil genius (insert maniacal laugh)?
Term #2: Occupancy restrictions
The terms should indicate the unit is exclusive residence to signed tenants. Children or dependents are also named and accounted for. Being particular with this policy gives you the right to say who gets to stay.
Remember, you screened and shortlisted for applicants, and only those approved should be allowed tenancy. Set the limit on allowed number occupants; this is for your own peace of mind. The clause is valuable because it prevents anyone from crashing your place, at the invitation of any tenant.
It’s also a safeguard from subletting. You don’t want anyone mooching rent money out of your property. Tenants who put up ads that say rent my house are a cause for concern. A tight agreement that spells out the occupancy restrictions an easily solve this problem.
Term #3: Duration of tenancy
This is an essential provision in managing for rent by owner properties. The document must indicate if it’s a rental or fixed-term lease arrangement. Rentals expire every month and renew automatically (unless terminated). A lease usually lasts a year, and terms are reviewed or adjusted upon expiration.
Decide how long you want the rent or lease to last. Consider tenant preferences as well, adjust the duration if you can. Everyone should have the same expectations, and one party should be allowed to end the tenancy if the other doesn’t hold their end of the deal.
Term #4: Rent
Specify the amount of rent due, the regular due dates (first of the month, 15th of the month?), and how the tenant sends payment.
If you’re willing to accommodate a grace period, keep it down to two days. Setting payment options also spares you from the usual alibi of “I couldn’t reach you yesterday so I used the rent money to order Google Glass on eBay instead.”
Detail out your preferred payment methods (if you accept checks), any fees on late payments, and charges on dud checks. You’re in business for profit here, so close all the loopholes you can find.
Term #5: Terms on security deposit
This can be sketchy territory in for rent by owner properties if you don’t lay out the terms in detail, just to be sure. Avoid confusion and lawsuits by minding the details, including:
- The amount of the deposit (must comply with state laws)
- Specific provisions on how you’re allowed to use it (and how the tenant can’t use it)
- How and when you’ll return the security deposit, at the end of the tenancy
- An accounting of the deductions
- Non-refundable charges (cleaning, coverage for pets)
And be clear that the security deposit isn’t meant to cover for unpaid rent.
Term #6: Repair and maintenance
Your tenant will depend on you on the smallest upkeep if you don’t detail terms. You may even be liable for uncollected garbage! The tenant is expected to be responsible for keeping the property clean and orderly. They’re also liable for damages caused by neglect. You can also choose to prohibit installations or renovations: burglar alarms, built-in dishwashers, even wallpaper.
Tenants are responsible for informing you of damage and defects on your property. Detail how you’re going to handle alerts and requests, which are urgent enough and need immediate attention, and which ones you can put off for the weekend.
Managing a for rent by owner property comes with perks. Cover your interests in the terms to ensure a smooth lease. There are fewer kinks to straighten out, and hopefully you’ll always be on your tenants’ good side. Be the landlord your tenant wants to see, even on rent-is-due day.
Ready to look for tenants and rent your home privately in Australia? For $50 we’ll list your property UNTIL LEASED. Learn more here.
Being a DIY landlord can be a very rewarding experience. You might like our other blog posts to help you manage a rental property like a pro:
- 5 common mistakes DIY landlords should avoid
- Learn the 5 advantages of letting unfurnished property
- Movein.Space: a wonderful free tool every private landlord should use
- Have a property for rent or for sale in Australia? Or a business for sale? Find out how we can help
- 9 reasons to share your home for rent or home for sale on Facebook