Step-by-Step Guide: Renting out Your Property with a Real Estate Agent

One of the primary decisions to make when you’re ready to get tenants into your rental property is whether or not to use a real estate agent (also known as a property manager or rental agent). Here are the reasons why you should hire a property manager, questions to ask when comparing property managers in your local area and a step-by-step guide to follow when it’s time to rent out your property.

Finding the best property manager doesn’t need to be a time-consuming process. You can compare property management fees and other information, such as rental strategy and independent landlord reviews, side-by-side with LocalAgentFinder.

What is a property manager?

A property manager is someone hired to act as an intermediary between the landlord and the tenants. Here’s a look at just some of their responsibilities:

• Advertising your investment property for rent.
• Assessing tenancy applications by reviewing their information and contacting references.
• Lodging rental bonds and organising the residential tenancy agreement.
• Collecting weekly rental payments.
• Carrying out routine inspections.
• Handling all the paperwork and any tenancy issues, including organising repairs.
• Staying up-to-date with the strict laws and legal requirements governing rental properties.

Where do you find property managers?

When it comes to finding the best local property manager for your rental, you’ll want to make sure that you find someone who will work hard to protect your property investment. Compare agent qualifications with LocalAgentFinder, a one-stop shop.

Why should I hire a property manager for my rental property?

Now, a property manager can cost approximately 7-10% of your total rental income each week, which is a factor that causes some people to question this option. However, the services that an experienced property manager provides can be worth far more than this fee.

1. They’ll find suitable tenants for your property

Finding the right tenant for your rental property is one of the biggest battles you’ll face as a landlord. Finding suitable renters to avoid periods of vacancy and income loss is paramount. Fortunately, a property manager will handle all of this for you, including:

• Creating a rental listing with professional photographs and placing it on partner sites like realestate.com.au and domain.com.au, which only they can access. They’re experienced and know how to create a targeted advertising and marketing campaign to ensure your property’s highly visible to potential tenants.
• Organising open inspections that showcase your property in the best possible light to potential renters.
• Professionally screening potential tenants via tenancy databases to see their financial and rental histories and ensure they have the financial means to cover the rental bond and pay rent weekly.

2. They’ll act as a liaison between you and your renters

One of the main reasons to consider hiring a real estate agent who specialises in property management is that they act as a buffer between you and your tenant. Some of their responsibilities include:

• Organising routine inspections to ensure the tenants keep your property in proper working order.
• Acting as a liaison to make your life easier. It’s their responsibility to organise repairs, handle any complaints and collect both rent and bond money.
• Dealing with problems and resolving issues, such as late rent payments or damaged property, ensures you avoid unpleasant confrontations. Speaking of, consider getting or learning more about landlord insurance policies to protect your investment and to help you shoulder unexpected maintenance costs.
• Giving professional advice on landlord rights and legal obligations, from the property’s structure to its smoke alarms.

If you prefer to take care of some of these tasks, you can write this into your contract and the tenancy agreement. A property manager will give you as much or as little involvement with the daily management of your property as you like.

They are specialists at multi-tasking and are highly qualified to prioritise and perform any and all of these duties. You can expect them to help you with matters of communication, negotiation and conflict resolution.

3. They’ll look after all rental paperwork

There’s a remarkable amount of paperwork involved with managing a rental property, including property rules and regulations, the tenancy agreement, contracts for repairs and maintenance and more. Real estate agents are able to keep these files well organised, ensuring that nothing slips through the cracks. Experienced property managers also have a legal responsibility to keep tabs on the latest zoning regulations, federal and state rental laws, property values and landlord rights.

They will watch rental prices for your region closely, staying up-to-date on the current rental market conditions to best advise you on your investment. With this attention to detail, they will help you decide if it’s time to raise the rental price or make key repairs.

4. They’ll be proactive and trustworthy

To excel at all of these tasks, a good property manager will be proactive and trustworthy. They’ll also be:

• Willing to go the extra mile to ensure that both the tenant and the landlord are satisfied with their rental situation. Property managers will check in using various means, including phone interviews, regular inspections and surveys.
• Sociable, friendly and cooperative people, which helps them diffuse tense situations and handle uncomfortable circumstances with ease. They will be the go-to person for both parties, resolving conflict positively. 
• Knowledgeable of the local market. Your agent will be able to inform potential tenants of all of the relevant information they need regarding the house and the surrounding neighbourhood. 

5. They’re not emotionally attached to your property

This is a big one for many first-time property investors, who might have an emotional attachment to their own home. Having a property manager as a liaison between you and your tenant will make a big difference, as they’ll be there to make more objective decisions.

6. They’ll save you a lot of time and effort

Look at this list above and just think about all of the time and effort you’ll save by letting someone else manage your property investment and take on this great deal of work. Renting a property requires a lot of work and a high level of commitment, which many property owners don’t have the time or the inclination to put in.

A property manager will handle all the headaches and downsides of renting for you, potentially making life much easier. The percentage of your rental income that goes towards their fees will pay for itself when you’re able to sit back and relax.

The cons of renting out your property with a property manager

To be balanced, let’s look at the disadvantages of hiring a local property manager to look after your property investment.

1. It costs money

The main factor preventing many people from hiring a local property manager is the fees. But if you look at the advantages, we think you’ll agree that hiring someone to handle all of this for you is worth the extra money.

2. Your property won’t always be the highest priority

Any property manager you hire will be managing more than one property, so it’s safe to say your particular rental won’t always be their top priority. But when interviewing prospective managers, ask them how many properties they currently manage to understand their workload. You should be able to find one who you feel comfortable with. 

Questions to ask before you sign with a rental agent

Below is a handy list of questions to consider to help you choose a manager for your investment property.

1. Does the agency have a team strictly dedicated to leasing properties?

It’s quite common for real estate agencies to put more effort into property sales than into property management. In the worst cases, this responsibility may even be left to receptionists or administrative assistants. Be sure that you work with an agency that specialises in rental management.

2. Does the agency’s owner or principal/CEO/managing director have a role in the everyday functioning of the property management team?

When an agency’s owner plays an active role within a team of property managers, this often serves as an incentive to make the team work harder and with greater professionalism. Having a manager who isn’t afraid to get involved in their business’s success is also a sign of the type of agency that will work harder for you.

3. How many years of experience does the agent have?

If you’re looking at proposals from individual real estate agents, you’ll want to find out more about their experience. Many real estate agents are members of larger agencies with sterling reputations and a history of success to draw upon. But it’s also important to find out more about the specific agent who will be handling your rental property. The right agent will have a love for rental management rather than direct sales. Passion, dedication and experience are all vital to success.

4. What happens if there are problems with tenants? Will the agent represent me in court? What is the agent’s success rate in this type of situation?

Most rental agreements run smoothly with the assistance of professional property management. But things can still go awry and you may need to protect your legal rights as a landlord. Should this occur, you will need to have an experienced real estate agent by your side to help you navigate through the ins and outs of tenancy law. It’s extremely helpful in these circumstances to have property managers do the legal work on your behalf, helping you save time and money while achieving your desired outcome.

5. Does the rental management service cover specific areas?

If you’re investing in multiple properties, you’ll have the need for a real estate agent with the expertise and knowledge of areas outside of your immediate vicinity. There are several options to consider when you expand your portfolio of rental properties. You could either hire a real estate agent in each specific suburb where you own investment property, or you could sign up with a larger agency that covers a wider physical area to manage all of your homes simultaneously.

Lately, like many other countries overseas, Australia is becoming home to larger property management agencies that cover broad geographical regions. These agencies use modern technologies, such as online banking and advertising, to help manage far-flung properties. If you need someone to manage more than one property, be sure to compare proposals from asset managers that can handle a wide geographical area.

6. Does the agent attend inspections of your home with potential tenants?

Naturally, most property owners will not want strangers waltzing through their homes without supervision. The right estate agent will accompany potential tenants on visits to your property. Not only does this protect your home’s security, but it also can serve as another medium for marketing.

The agent can point out features and amenities of your home and learn more about the client’s personal and financial situations. This can help them determine whether the clients in question would be advantageous tenants. It’s best to avoid agencies that simply hand over keys to tenants with no questions asked.

7. How many properties does the agent personally manage?

Although managing multiple properties helps build experience, it’s a good idea to ensure that your potential agent doesn’t juggle too many at once. Agents can manage up to 150 properties. If they’re managing a higher volume, it’s a good idea to check homeowner reviews and find out the level of commitment you’ll get from them. If they’re managing too many properties, they generally won’t have the time to give each property the energy and effort it deserves.

While larger agencies will have more clients and smaller agencies will have fewer, make sure that the property managers have the time to manage each home effectively, ensuring higher monetary returns. It may be worth paying higher fees to a boutique agency of this nature if it means you get the extra care that could yield greater financial rewards and prevent vacancy, damage or other problems.

8. How many days per week will managing agents have available to show the property to prospective renters?

Many professionals in today’s busy world don’t have time to visit properties during the normal work week. If an agent is able to show properties on weekends or during extended hours, this will help cater to potential tenants’ needs. The ability to show your property at least six days a week can help market your home more effectively.

9. How does the agency check prospective tenants’ financial situations?

To help protect your investment, you’ll want to find tenants with good credit, steady jobs and a history of reliable rental payments. You’ll also want a good tenant who pays rent on time and treats your home respectfully. To help facilitate this, a good agency will be able to complete in-depth screening of individuals using a subscription to the appropriate tenancy database.

10. Does the agency use a computer system to stay up to date with rental arrears? What actions are taken if payments are overdue?

In today’s computerised workplace, most agents will use modern programs to monitor rental arrears on a daily basis. This allows them to accept electronic funds transfers and take immediate action should payments become past due. When rent payments are late, agents can follow up with tenants immediately using email, telephone calls, written documents or text messages.

It’s also important to have an idea of the kinds of processes that agencies have to deal with bigger problems or non-paying tenants should they arise. Once you’ve asked the above questions and compared agents online, you’ll be confident that you’re making the right decision in choosing the best real estate agent to rent out your property.

Step-by-step guide to renting out your property

So now you’ve asked the hard-hitting questions and hired your manager, it’s time to rent out your property. Here’s a step-by-step guide to follow to guarantee success and less stress.

1. Get your rental property ready for tenants

You want your investment property to look its best to attract the best tenants. So before showing it to prospective renters, double-check your home for anything in need of repair. This might include dripping taps, unlockable windows, mouldy grout or broken fixtures.

An empty property is also the best time to take on any bigger renovations you might have on your mind, like updating your kitchen and bathroom. The next step is to clean it from top to bottom and inside and out. We’re talking ceiling cornices, carpets, windows, window treatments and the backyard. Finally, it’s a landlord’s responsibility to make sure the gas, heating and electricity are compliant. A safe and well-presented property is guaranteed to entice higher-quality tenants.

2. Secure landlord insurance

Landlord insurance can protect you in many instances when you rent out your property. A typical landlord insurance policy covers things like tenant theft, financial loss due to tenants defaulting on payments, damage done by tenants and legal expenses.

3. Speak to your accountant

Before you rent out your property, it’s best to seek professional advice and speak to an accountant as there are tax benefits to property investing. They can advise you on capital gains tax, tax-deductible options and the possibility of a depreciation schedule.

4. Determine the rent

Your property manager has expert local market knowledge, so they’ll be able to effectively advise you on how much rent you can expect to receive from your property. They’ll review all the details, like the number of bedrooms and bathrooms, the location and nearby conveniences and amenities.

But we encourage you to do your research and view similar properties in your local property market on websites like realestate.com.au, so you’re comfortable with the decision.

5. Advertise the property for rent

As mentioned, this is where your property manager comes in handy. It’s their responsibility to organise your marketing and advertising campaign to garner attention from a higher number of tenants. The more applications, the more choice you have.

You want to make sure that their campaign includes professional photos, captivating copy, listings on all the popular websites and social media marketing.

6. Secure great tenants

Rental managers are responsible for screening tenants and checking their criminal history, contacting references, reviewing finances and accessing financial and rental histories via national tenancy databases. They will then pass this information on to you so you can make an informed decision regarding which tenants are best for your property.

7. Sign the tenancy agreement

Now you’ve got great tenants, this is when your property manager steps in to get the residential tenancy agreement signed. Your manager will have a template that meets legal requirements. This will include the lease’s start and end dates, whether it’s a periodic or fixed-term agreement, the rent amount and any specific stipulations. This might also include whether pets are allowed.

It’s also up to your manager at this time to secure the rental bond payment from your new tenants and submit that paperwork as well.

8. Ensure the condition report is complete

Your property manager and tenants are responsible for completing the condition report. This includes written and photographic evidence of your property’s condition when the tenant moves in, which is essential in case of future legal action.

9. Keep updated on your property

Now the tenants are in, it’s time for you to relax and let your agent manage the day-to-day needs and responsibilities, like inspections, paperwork and maintenance requests. But it’s beneficial to keep in regular contact with them to ensure your property doesn’t slip through any cracks.

Renting out your property with a property manager

It’s evident that using a property manager to rent out your property will save you a lot of time and unnecessary stress. Let LocalAgentFinder help you compare local property managers, so you find the right fit for you and your property.