1. Keep vacancies, arrears and repairs to a minimum and tenant harmony to a maximum by setting the rent at ninety five percent of the current market value.

Novice residential property investors often fall into the trap of trying to obtain market rent or even five to ten percent above the market.

Rental properties which are placed on the market to let just below market value

• Attract the best referenced tenants, and

• Maintain minimum levels of vacancy, arrears and repair / maintenance

2. Tenant references are essential. Give the most weight to the response to the question

Do you believe the applicants would be able to pay $x per week for y weeks and keep the property clean and in good repair ?

Always obtain reference checks. The prospective tenant’s previous real estate agency or owner (landlord) and employer are essential references. If possible also ask the above question of their accountant, lawyer or banker.

Don’t be influenced by personal references. Successful investors readily confirm it is rare indeed to be provided with poor personal references.

3. Always utilise the services of an experienced, well-referenced, professional managing agent unless you have the time to gain a detailed up-to-date knowledge of the residential tenancy legislation, an understanding of local vacancy and rental movements, a background in repairs and maintenance, a bank of reliable tradespeople, an awareness of housing price movements and other governing factors such as insurance and property taxation.

Managing rental property is a role for experienced well referenced experts not enthusiastic amateurs.

Only a fool has him / herself as a client

4. Require your managing agent to provide

(i) A monthly statement of all income and expenses with your cheque banked directly into your account.

(ii) An annual written report of state of repair (internal and external) and cleanliness.

(iii) A mid year written kerbside report of state of apparent repair and cleanliness.

(iv) A six monthly written report of the current rental value and the local area vacancy rate.

(v) An annual written report of the current reasonable selling price of your property.

5. Carry out an internal inspection with the agent every two years.

Let the agent organise the appointment. Insist the agent accompany you and let them do all the talking with the tenant. Remain as anonymous as common courtesy will allow and never exchange telephone numbers or contact details with a tenant. It’s the agent’s job to be just that . . . . . the agent between you and the tenant.

6. Until you get to know the agent (usually three to six months) require all expense items to be referred to you (other than emergencies) prior to the agent spending any money. After three to six months set a limit on the amount the agent can spend (usually about the equivalent of one week’s rent) without reference to you.

7. Always have your agreement with your agent evidenced in writing.

Irrespective of your local legislation or governing regulations insist that your service contract with the real estate agent is completed before they start to perform any service for you.