Things You Need to Know Before Renting Out Your Home

May 9, 2023
Buying Property in Australia

Whether you’re renting out your home while you live overseas for a few years and intend to move back in eventually, or have upgraded to a new home and want to turn your former place of residence into a permanent investment property, there are a few things you need to consider before renting out your home.

Remember that the rules will be different if you’re just subletting or fully leasing your property.

The costs

Before you rent out your property, you should understand all the costs involved. Don’t assume that because you will have rent coming in you’ll have a whole lot of spare money to play with.

You need to consider what turning your home into an investment will cost you. Have you done research on whether rentvesting bad? Do you have your finances in order?

This includes things like property management and advertising fees, maintenance, capital gains tax and insurance, some of which are discussed further below. Property maintenance fees will involve cleaning, repairs, and regular gas and electrical safety checks.

Before renting out your home, you should try to calculate the weekly income or deficit you will receive from the property so you can ascertain how it will affect your budget and lifestyle. Additionally, you should know how to work out rental yield to maximise returns.

Some consider buying a duplex and renting half so that at least you can live on the same property and maintain control.

Suggested reading: Wondering if you can rent your own property to your business? Find out how in Soho’s guide.

The benefit of a property manager

While some investors are tempted to manage their own properties, there are a lot of downsides to this approach and even more reasons why you should hire a professional property manager. A dedicated property manager will have a better idea of pricing, will manage any disputes and will help select a suitable tenant and conduct reference checks, among other things.

Hiring a pro to manage your property will also help remove some of the emotion from the process, which can be hard when the space has been your home.

Just remember, if you want to avoid Capital Gains Tax, you can only rent your house out after being owner occupied for a year.

Did you know that DHA might influence your home rental decisions? Before making any moves, ensure you’re well-informed. Discover everything there is to know about “What is DHA” in our detailed article.


As a landlord you will need specific landlord insurance, in addition to your standard home insurance. You will need a policy that covers you for things such as tenant damage and rental default, which general home and contents insurance won’t.

Is your home ‘rentable’?

Just because you decide to put your home on the market, it doesn’t mean someone will snap it up right away or at all for that matter. You need to make your home appealing to the rental market. This could be fixing those repairs that you’ve been putting off, replacing that daggy carpet, ensuring it’s tidy in general and has curb appeal. These things can also increase rental price, if you play your cards right.

How it will transform your tax situation

When you’re an investor, you’ll have access to a range of tax benefits that owner occupiers don’t. This includes property depreciation, where you can claim deductions for wear and tear to the property and its contents over time.

However you should also consider how the Capital Gains Tax (CGT) you pay will be affected if the property is sold in future. Read more on what CGT is and what the rules and exemptions are here.

Additionally, you should know that if you don’t live in the home for a year before renting it out, you will have to pay capital gains tax.

Your emotional attachment

Given that the property had been your home, it’s understandable that you will have an emotional attachment to it. However, when investing, it’s important to remove this emotional attachment to some degree.

You don’t want to care so little about it that you leave any damage unrepaired and let it get into a state of disrepair, but you also have to be open to changing things at the property if reasonably requested by the tenant, even if it may not have been that way when you lived there.

The legal obligations

things to know before renting out your house

You need to ensure that you conduct your investment in a legal manner. This includes everything from the tenancy agreement to inspections, rent collection and terminations. This is why it’s a good idea to hire a property manager, as they will take this concern and liability away from you. Even so, it’s a good idea for landlords to have a basic understanding of the Residential Tenancy Act, to ensure they’re acting in a legally compliant manner.

What’s included?

What will be included with the property? This may differ if you’re renting the property out for just a year or two, or long term.

For instance, will you include all furniture, just basics like the washing machine and couch, or no furniture at all? Furthermore, decide if certain assets will be off-limits to tenants, such as a spa or the garage you’re still using for storage.

Need more help?

Download the soho app. With the app, you can contact agents quicker, browse through your property matches and ultimately find your dream home even sooner. We are finding you homes we think you’ll love, so don’t forget to shortlist or swipe left on our listings so we can send you others that better match what you’re looking for.

Soho takes the hassle out of finding your next home. Whether renting, buying or investing, set up your match profile and we'll send you live property matches as they come on the market. Download the Soho app and never miss an agent's message, inspection or new listing. Agents list for free.
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Our AI match engine will match you with over 150,000+ properties and you can swipe away or shortlist easily. Making your home buying journey faster and easier.