The numbers have it: Australia’s rental vacancy rate in early 2022 has fallen to a record low of 1%, down from 2% a year earlier. This creates a landlord’s market which may make sense renting privately your residence, bypassing the services of an agent.
With rental demand strong, you will probably think that finding prospective tenants will be easy even without an agent. However, it won’t be clockwork for a DIY landlord even as prospective tenants hunt for fewer rental vacancies.
Renting out your property privately requires time and effort; surely not for the faint of heart. Nonetheless, privately renting your property is doable and worthwhile.
Renting privately your home without an agent could save you hundreds or thousands of dollars in professional fees. To get the savings and maximise your rental return, you will have to assume an agent’s functions and responsibilities.
Here are eight steps to take when privately renting your property without an agent.
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How to rent out your home privately and without an agent
1. Prepare your house for leasing
Your first task when renting out your property is getting it spick and span in and out. Steam-cleaning carpets and polishing floors are among the priorities for the house’s interior.
The exterior job not only involves cleaning windows and clearing cobwebs. Getting the yard and other outdoor areas shipshape are priorities also.
If your budget permits, hire a professional cleaner. You may also need a handyman to do repairs to ensure that you’re privately renting out a house safe and convenient to live in.
Check your property’s compliance with all current safety regulations and guidelines. Take remedial measures immediately on matters like faulty power connections and smoke detectors.
2. Set a competitive rental price
In privately renting your property, you won’t have the expert advice of a real estate agent on pricing. You have to use your judgement on the rental price for your house.
As it’s a landlord’s market currently, chances are you may overprice your rental. To help ensure that your price quote is competitive, consider the following factors.
- Comparables. Align your rate with rental houses similar in size to yours in your area. Many online marketplace sites carry this information including lot area, house square footage, and the number of rooms and bathrooms.
- Neighbourhood. Go on an inspection tour of rentals in your neighbourhood, if possible, to verify their features. Consider also the neighbourhood’s desirability to certain renters.
- Local amenities. Also consider the proximity of your property to local conveniences, like malls, bus stops, or train stations. If you have an edge, leverage it in the rental pricing.
3. Market your rental
You will handle marketing and advertising in renting out your property privately. Without agent support, you will have to produce the rental ad —write its copy and shoot its photos.
Then, you need to place your ad online where about 90% of aspiring tenants look for rentals. For these ad placements, you can tap social media, like Facebook, and property marketplace portals which typically charge a fee.
4. Host the inspections
Set personal inspections of your rental with prospective tenants who responded to your ad. Be sure to come up with your talking points about your rental to highlight its best features.
Be transparent and straightforward about your rental, like its availability and restrictions. Take the inspections also as an opportunity to gauge the prospective tenants and their compatibility with you as the landlord.
5. Screen applications to select a tenant
Privately renting a house calls for a lot of time screening prospective tenants, especially if you received many applications. With no access to agents’ databases, you will have to tap basic online credit and tenant checkers like FinRet and Naborly.
You’d need to check the supporting documents that your aspiring renters submitted with their applications. To select a tenant, screen them according to the following:
- Current job
- Credit history
- Employers or previous landlords references
- Reason for leaving the previous one or two rentals
- Eviction notices or rent arrears history (if any)
Though you may reconsider them, red-flag applicants if their applications indicate these warning signs:
- Unverifiable income
- A low income-to-rent ratio
- A disjointed job history
- References entirely from family or friends
6. Organise the paperwork
After finding a tenant who met all your criteria, you’ll organise the paperwork for the signing of the tenancy agreement. The form for this document varies by state, and you can typically download it free from your local government’s website.
The specifics in the agreement should include the following:
- Number of residents allowed in the rental
- Rental bond amount
- Bank account information for rental payments
- Contact details of all residents in the rental
- Any specific property conditions, e.g. items already damaged or broken before tenant occupancy
As a landlord renting privately your house, you must also write a property condition report. You have to complete this report within seven days of the tenancy’s start and give a copy to the tenant.
7. Work on the insurance and rental bond
Get insurance coverage of the property when renting privately your house. This will cover damages the tenant may cause to the residence and to any item you may provide in it.
You should also advise the tenant to have renters insurance because your coverage won’t protect their household items in case of damage or theft.
The rental bond is another item you have to work on when renting privately your house. Take note of the following when you collect the bond of your rental:
Each state has a limit on rental bond amount, which ranges from two to six weeks’ rent. Four weeks’ rent, for instance, is set as the maximum for Victoria and NSW.
A rental bond can’t be deposited in a bank. It has to be lodged with the board or authority concerned, which requires completing a downloadable Bond Lodgment Form.
8. Maintain communication
Lastly, you have to maintain communication with your tenant. In your exchange of contact information with your new tenant, specify your preferred mode of contact.
Because you’re renting privately your house, its property management is also your main responsibility. In case of repairs, advise your tenant of your preferred tradesmen to call or if you’re capable of a DIY on them.