It can be an exciting and scary time when your first rental investment is about to settle. There is a bucket load of money to be handed across to the seller; legal, mortgage and insurance documents to read, understand and sign, and then comes the prospect of the home sitting empty before the ideal tenant comes along. 

So, what do you need to plan for, and how much should you have set aside?

While every property is different, there are some common factors that can be identified to help set your budget. Some of these are direct costs, some are general maintenance, and some require dedicated time spent to ensure the property is compliant with all the requirements for a rental home. 

Expenses to budget for:

1. Advertising costs and marketing time;
2. Vacancy period till the new tenants move in; 
3. Healthy Homes assessment, if not currently compliant; 
4. Bringing property to RTA Healthy Homes standards; i.e, upgrading insulation; upgrading or adding compliant heating; installing extractor fans; draught-proofing where needed;
5. Adding or upgrading smoke alarms to compliant photo-electric alarms; 
6. Meth testing;
7. Deep clean of all areas, including carpets and windows; 
8. Routine and deferred Maintenance; 
9. Improvements to attract better quality tenants; painting, re-carpet, upgrading tapware etc; 
10. Replacing larger items such as the HWC, from low pressure to mains pressure; 
11. Unexpected repairs such as roofing and gutters. 

Careful and structured planning before settlement date can reduce your costs and reduce the stress of an empty investment. 

So, what can be done to reduce vacancy and minimise your costs?

1. Start marketing the property around 4 weeks before it comes available. Compare with similar properties in the area, and be objective about what makes your property stand out, or what features tenants may prefer at other homes. 
2. Ask if you can have access prior to settlement for trades quotes and to determine what work is needed. 
3. Set up a firm timetable of what work is to be completed and when. Make sure to check lead times on items so one item, (such as curtains or flooring), doesn’t prevent tenants from moving in. 
4. Schedule general maintenance to start as soon as you have access, such as lawn mowing, garden tidy, clearing gutters. Most tenants will do a drive by before a viewing, and will be put off if the property looks uncared for. 
5. Set up a temporary power account to start settlement day. 
6. Fit new photo-electric smoke alarms as soon as you have the keys. 

If you’d like to find out more , call Kim Willems at Ruby Housing today 03-379 5033