Life doesn’t always go as planned. This can sometimes affect your ability to complete the terms of your residential tenancy agreement (lease), like needing to break the lease early.

You might have lost your job or broken up with your girlfriend or maybe once you’ve moved in you’ve found the house just isn’t right for you. Or maybe you just aren’t getting along with your real estate agent – I’ve been there – and now you need to break your lease. So what’s the best way to get out of your rental’s lease?

1. Be upfront with your landlord.

As soon as you realise that you’re not going to be able to fulfill the terms of your lease you should let your landlord or real estate agent know including the reasons why. Your landlord will likely understand and be thankful that you’ve let them know sooner than later. Also make sure you let them know when you’re likely to be moving out and the steps you’re going to be taking to make the situation easier.

At the end of the day breaking a lease is not ideal but the more you can do to make life easier for your landlords the better the situation will play out. If you can help them find new tenants and minimise disruption you can still walk away with a great reference for your next place and with the minimum of out of pocket expenses.

2. Set a date to move out.

Work out when you’re likely to be out of the property. This will help you to plan packing and moving as well as cleaning and inspections to find someone to take over the lease.

Setting a definitive date that you will vacate the premises by will allow your landlord and their potential future tenants to plan their lives better.

3. Help advertise.

One of the bigger stresses that your landlord is going to face when you break your lease is how to find new tenants to move in. If you can help to solve this problem for them you’re going a long way to keeping them on your side.

Let them know you would like to help advertise the property and post the details to your social networks including online, to your friends and family and to your workplace. Being able to find someone connected to you socially is going to mean the transition will be easier and your landlord will have a personal reference from you.

The added benefit of helping to find new tenants is that you’re reducing the amount of time that the property is vacant for which you may otherwise be liable for.

4. Be open for inspections.

Let your landlords know when you’ll be ready to start having inspections for potential new tenants. The house will need to be in immaculate condition at this point though having a few boxes lying around is understandable.

The more flexible you can be in allowing inspections the better.

5. Leave the house in better condition than how you found it.

Generally it’s worthwhile to hire a professional cleaner to come through if you can afford it. They’re always going to be more thorough than you will be, they do this for a living.

If there is any damage that has happened to the property try to get it corrected before you move out or at the minimum let the landlords know. Any damage that is not on your property condition report is going to reduce the amount of bond you will get paid back when you vacate.

At the end of the day honesty and transparency is the best option when you need to break a lease. Keep in regular contact with your landlord or real estate agent and get them to understand what you’re doing and why. Breaking a lease doesn’t have to be a negative experience.

Have you ever had to break a lease on a rental property? We’d love to hear your experiences in the comments.

Ned

I found a great site yesterday dedicated to helping people who rent “lead an ecologically and environmentally sound existence”: GreenRenters.org. It’s full of advice for tenants and landlords on how to improve your homes green credentials including ways to grow your own food, reduce power consumption and waste.

Better still it’s an Australian advice making the content all the more relevant including details on government rebates on insulation for renters. They also run a range of workshops on how to create sustainable rental properties around Australia.

Check them out and let me know what you think.

Ned

So you’re currently renting a property through a real estate agent and you’ve had enough. They never return your calls, you can’t seem to get receipts for your rental payments and you’ve been trying to get the lock on the front door fixed for a month now.

What if you could get rid of your real estate agent?

In this post I’m going to give you some ideas as to how to stage a coup on your real estate agent and give the owner of your rental property the confidence to become the landlord themselves.

1. Be direct about why you would like to get rid of the real estate agent

I’m sure you’ve got valid reasons for not wanting to deal with your real estate agent anymore but you need to make these clear and concise. If it’s because you don’t want a property inspection every three months that’s not the best reason. If it’s because you’re not getting a decent level of customer service or you’re being hit with unnecessary fees than you’ve got a stronger case.

2. Find out why the owner uses a real estate agent.

The owner of your rental property has decided that they want to use a real estate agent for a reason. If you’re going to persuade them otherwise you’re going to need to know what this reason is. It could be to do with finding new tenants or handling lease documents. Once you know the reason you can see if you can create a compromise to allay any of their potential fears about handling the property themselves.

3. Give them a copy of your states “Landlord’s Guide”

Every state in Australia produces their own version of a Landlord’s Guide. It is basically a manual on how to manage a rental property including both tenants and landlords rights and responsibilities. Because it’s produced by government departments it is going to carry a lot more weight than what you can possibly say and it should help the owner of your rental to feel more confident as a private landlord.

You can find links to each states Landlord’s Guide in our landlords section.

4. Highlight the savings.

If you call your real estate agent they should be able to give you a schedule of their fees for property management; how much their management fee is, what extras they charge for etc. Using this you should be able to calculate how much the real estate agent is costing your properties owner every year. This figure effectively becomes the amount you’re going to be able to put into your property owners wallet every year if they decide to handle the property themselves.

5. Get an equitable lease agreement

You want to make it as easy as possible for the owner to fire the real estate agent and getting a well drawn up lease agreement is the best way to go.

The length of the agreement is up to you though the longer the tenancy the more attractive it will generally be for the property owner. If you’re already signed to a lease with a real estate agent this should be able to be continued with your landlord.

For a comprehensive collection of quality lease agreements relevant to each state in Australia check out Law Live.

6. Setup a direct debit.

One of the biggest concerns for private landlords is that rent will not be paid in full and on time. The best way you can make them feel confident about this is to setup a direct deposit from your account into theirs on a set day every month. This will mean that the rent will be paid every month automatically without the risk of a missed or late payment for any reason.

Your property owners bank will be able to give you a copy of a direct debit authorisation form which you will both need to fill out.

7. Show them Truecasa.com

Let them know that they’re not the only ones getting rid of their real estate agent. In Australia approximately 40% of all rental properties are managed by non-agents, I figure we anticipate will grow steadily over the next few years.

Truecasa has a wide range of articles and resources your new landlords will find helpful and hopefully inspiring.

At the end of the day the best advice we can give is to be honest and transparent with your intentions and your actions with the property owner. Mutual respect will lead to a long-lasting, positive relationship free of real estate agents.

If you do manage to stage a successful coup or have done so in the past let us know in the comments, we would love to hear about it.

Ned

1. Advertise first through social networks

The best tenants are going to be ones who you know through personal networks. They will always have good social reasons to do the right thing by you.

To start with we would advise you to advertise through your family, social and work networks. This could be done through Facebook or perhaps Twitter or you could send out an email to your contacts asking if anyone is looking for a rental property in your area. You may even have a job board at work that you can use or an internal messaging system.

2. Get thorough rental applications

Once you’ve advertised your property in all the right places and held an open inspection of your property you will start to get applications from prospective tenants. It’s important to know have a procedure for how your tenants will apply to make your job easier.

I cannot recommend enough having a thorough rental application. This will accomplish two things.

Firstly it will separate the wheat from the chaff. If tenants are serious about wanting your property they will be happy to fill out a detailed questionnaire for you, tenants who aren’t so serious won’t waste their time – or yours.

Secondly it gives you a great deal of information to start to create your short list of potential candidates. Information such as employment and rental history, how many people will be living in the house, whether or not they have pets and who their references are.

I have created a PDF rental application form that you can download and print out here.

3. Check your tenants rental history

Some private landlords will assess their tenants based on their intuition but it’s important to go that extra step to avoid trouble further down the road.

This is the best time to identify potentially troublesome tenants and avoid them. It will save you money and heartache so it’s worth doing right.

Once you’ve got a shortlist of three potential renters start to call their references, paying particular attention to the property manager of the houses they are vacating and ensuring that their employment history is correct.

You may also ask your tenant to provide you with a report from the National Tenancy Database. They will have to contact the NTD themselves but can ask that you be notified of the outcome of the check. For more details visit the National Tenancy Database website.

4. Get a lease. Get a lease. Get a lease.

A lease will lay out for both you and your tenant your rights and responsibilities. A well written lease will ensure that you both know where you stand on issues such as water rates, property inspections and little things like when the rent is due.

What can and can’t be in a lease agreement differs from state to state which is why I’ve created a short summary of free Australian lease agreements by state here on page for private landlords.

5. Get (and submit) a bond

The rules for bonds vary a little from state to state but the basic premise is that you should collect 4 weeks rent as a bond for your property. The purpose of a bond is to protect you as the landlord in case your tenants cause some kind of damage to the property or do not clean it to a standard when they vacate the premises.

In all states the bond has to be submitted to the relevant government agency where it is held in a trust account. At the end of the tenancy the tenant will apply to have the bond returned to them and the landlord can apply to have any relevant costs incurred be deducted from the bond and paid out to them.

Make sure you get a bond (even if you’re renting to a family member or a friend) and that you submit it to the relevant government agency.

6. Create an initial property condition report – and keep it up to date.

When your tenant signs the lease they are agreeing to keep the property in the condition that it is in. The best way to avoid any trouble in the future is to create a detailed report of the propertys condition, preferably including photos.

To do this simply go from room to room of the property and note any existing marks or damage to the property. Things like scratches in floor boards, chipped tiles, locks or windows which might not work. Once you’ve finished get your tenants to check over and sign off on the property condition report, provided that they haven’t noticed something you might have missed.

At each property inspection you should go over your property condition report and update it, making notes where damage has been created by your tenants and advising them that they will need to make amends. All of this documentation will protect both you and your tenant in the long run.

7. Conduct regular property inspections

A property inspection is a good time to check in on how your tenants – and your property – are going. You can make sure the property and gardens are being well looked after and find out if any preventative maintenance is necessary.

Once every 3 to 6 months is an ideal but you shouldn’t leave it much longer than that.

8. Get landlord / rental insurance

If you follow all of the above steps you will eliminate 99% of the potential problems you might have with your prospective tenants. However it’s still a good idea to get some form of landlord insurance or rent protection insurance. This will give you piece of mind that should there by any major damage to your property or your tenants are unable to pay rent you will not be hit with the bill.

Two providers of landlord insurance around Australia include AAMI and Terri Scheer, or contact your regular home and contents insurer.

Note: I will be doing a post in the not too distant future to compare insurance so signup to our mailing list in the right hand side-bar to find out when I do.

So there are my eight tips for new private landlords. Following these steps will help you to avoid some of the common pitfalls many new private landlords fall into and ensure that you have a positive experience with your new tenants.

What advice would you give to new private landlords?

Truecasa wants to see more privately managed rental properties and fewer real estate agent managed properties. But why would you make the decision to do it yourself? Here are 10 great reasons why you should become a private landlord for your rental property.

1. Save money on property management fees

Typically real estate agents charge between 6% and 12.5% of your rental income as a management fee. This is charged as well as property maintenance fees, leasing fees, property or landlords insurance, advertising and even a monthly postage levy in some cases.

The average weekly rent in Melbourne for the last quarter of 2009 was $330. That works out to $1430 a month or $17,160 a year. By not using a rental property manager you will save between $1029 and $2145 a year - for many properties that winfall will comfortably cover annual council rates charges or property insurance.

2. Find the right tenants.

When you manage the property yourself you’ll be a part of the process of finding new tenants. This means that you can find tenants from your social networks (whether through Facebook, work or social connections) and decide on who you want to live in the property.

Often real estate agents will select tenants based on who can pay the highest amount of rent rather than who might be the best applicant for your property. Choosing the tenants yourself will give you the opportunity to personally vett them and find the right ones for you.

3. You’ll always be in the loop.

When you’re managing your property yourself you become the direct contact for the tenants. You get to see when rent is paid on time and when it’s not as well as finding out any issues with your property.

If you’re collecting the rent in-person you’ll also be visiting your property once a month to at least get a superficial look at how it’s going.

4. Your property will get looked after better.

When your tenants can put a name and a face to the owner of the property they’re more likely to empathise with you. This leads to them showing greater respect for you and your property in turn. They’re less likely to skip out on rent or leave the property in poor condition when they’ve got a personal relationship with you.

5. Perform your own property maintenance.

By managing the property yourself you can also perform simple property maintenance work yourself. This may be as simple as replacing lightbulbs or unblocking a sink. By being able to inspect the problem you will be able to make your own judgement on how to rectify it and possible save yourself hundreds of dollars.

If  you do need to get a licensed trademan in such as an electrician or plumber you will at least have a better understanding of what work is required and how much it should cost. This means you won’t be lumped with any unwanted bills.

Alternatively there are a range of all-in-one property maintenance companies like Jim’s Building Maintenance who will assess and quote for you. Once approved they will then perform the work, liasing with you and the tenant the whole time to ensure the job is done with the minimum of hassle for all parties.

6. Your tenants will love you.

Take this from someone who has dealt with property managers for over 10 years: real estate property managers are rarely pleasant to deal with. Unfortunately the nature of the real estate industry means that property managers are some of the least qualified, lowest paid and overworked people in the real estate industry. This translates to some highly stressed people with a focus on retaining their rental properties rather than looking after the tenants needs as well.

In an average real estate shop a property manager will be a recent entrant to the real estate industry with a 4 to 8 week training course under their belt and 150+ properties to look after. The stress of the position often translates to tenants not being given the best level of customer service.

By removing the real estate agent from the equation and being able to give some one on one time with your tenants they will love you. You’ve just removed 90% of the stress from the process of renting a property and in return they will respond with the same level of respect in return.

Sound like good reasons? What’s holding you back?

Ned

The purpose of Truecasa is to increase the number of privately managed property in Australia. We want to connect more private landlords directly with their tenants without the need for real estate agents. So I thought I’d better write a post to let tenants know how you can find that privately managed property and stop dealing with real estate agents.

Finding privately managed property isn’t easy. Sites like Realestate.com.au and Domain.com.au specifically exclude private landlords from listing their properties, they’re really trying to protect the interests of the real estate industry. So where are the best places to look?

1. Saturday Real Estate Supplement

The real estate supplement in the weekend newspapers such as Domain in the Age on Saturdays or the Sunday Times in Perth are a great place to find privately leased properties. Generally you’ll find some more traditional landlords who have been renting out their properties for a few years.

I’ve personally lived in about 10 privately leased houses over the years and almost all of them have come via physical newspapers.

You should specifically be looking for classifieds featuring the words “Contact Owner” or “owner” and then the phone number.

2. Gumtree + Craigslist

While they’re not the easiest sites to navigate there are plenty of private listings, even moreso if you’re looking for a room in a sharehouse.

Both Gumtree and Craigslist do have more than their fair share of problems though, while there are plenty of listings there are also a few scam listings. Protect yourself by never revealing personal information such as your current address or bank account details until you’ve met the landlord yourself.

So those are the best places to find that privately managed rental house and get your real estate without the agents. We’re always looking for similar search engines and will post anything else we find up here on the blog.

Where do you look to find privately managed houses?

Ned

Around Australia there are slight differences in the laws around the relationship between private landlords and tenants. The laws are there to protect both the landlords and the tenants and a lot of the laws are about common sense.

The Consumer Affairs departments in each state have put together some great resources to make it easier for private landlords and tenants to know their rights and responsibilities. These include landlord/tenant handbooks, checklists and lease agreements.

Some common questions they answer include:

• How much bond can be charged?
• Can tenants sublease your property?
• How frequently can rental inspections occur?
• How much notice do I need to give to vacate a rental tenancy?

To find out your rights and responsibilities, either as a landlord or a tenant, visit your relevant State government Consumer Affairs or Fair Trading department.

Victoria:

Tenant and landlord advice

Forms and publications (including lease agreements, property condition reports and breach notices)

New South Wales:

Tenants and homeowners advice

NSW residential tenancy agreement (direct download)

Queensland:

Tenant and landlord advice (Residential Tenancy Authority)

Forms and publications (including general lease agreement)

Western Australia:

Tenant and landlord advice (“Managing your own property”)

Forms and publications (Landlords pack)

South Australia:

Tenant and landlord advice

Forms and publications (Landlords kit)

Tasmania:

Tenant and landlord advice (direct download)

Forms and publications

Australian Capital Territory:

Tenant and landlord advice (direct download handbook)

Standard tenancy agreement (direct download)

Ned

*image courtesy of Flickr user Chimay Bleue

Finding your ideal house is hard work.

First you spend hours online refreshing property sites looking for that perfect house, you create a short list of places you want to see and try to get into the inspections to make sure the photos and description aren’t too “creative”.

When you arrive at the inspection you find that there are 40 other people with designs on your dream house. 40 other people who you’re going to be competing with if you want to secure your dream apartment.

So what do you do? How do you give yourself the best chance to secure your new house?

1. Get a tenant check.
In Australia the National Tenancy Database provide checks on tenants to better inform landlords and real estate agents of errant tenants. You can contact them directly to get a free copy of your tenant check to make sure you’re in good shape to win the lease. Go here for more details: http://www.ntd.net.au/non_member/ntd/check/index.html

2. Make a good impression.
At the inspection make sure you have some contact with the landlords or real estate agent. Introduce yourself, let them know that you’re interested in the property and that you’re going to be applying. If you’ve got a business card give them a copy and get a copy of theirs.

3. Prep your references.
It might sound like common sense to most but make sure you contact all of your references before you put them down. Make sure that they remember you as positively as you remember them and ask them to let you know if they get a reference related call. A call to your reference is a good sign that you’re at least on the very short list.

4. Bring a completed application form.
You can get a copy of the application form ahead of time from the real estate agents office. Fill it in before you get to the inspection and if you’re still interested in the property hand it in, either on the spot to the agent or immediately afterwards at their office. If it’s a private landlord be prepared with all of the relevant information to fill out their application form on the spot.

5. Make a budget.
Work our what you can afford for a property. If it’s more than the property is offered for you might consider offering more. While rental auctions are illegal in most jurisdictions property owners will often rent properties based on who will pay the most. At the same time remember step 6.

6. Pay rent in advance.
Offer to pay a couple of months rent in advance up front. The agent can’t ask for you to do this in most jurisdictions but paying rent in advance is a great way to show that you are financially reliable and serious about the property. The start of a residential tenancy is often a financially tough time for property owners as they have potentially had a few weeks without rent and may have had to pay a management agent to get new tenants. Help make their life easier and they’ll be more inclined to sign up.

7. Follow-up.
Stay in touch with the agent or landlord via email a couple of days after your application to make sure they still remember you. Even if you don’t get this property it’s a good contact to have in the future for other properties. Private landlords sometimes own several rental properties and might have something else that suits you.

Finding rental property can be a long process but there are a few tricks that can help make it easier to land your dream home.

What other things have you done to make sure you get that lease?

Ned

*image courtesy of Flickr user Back Garage

Truecasa helps property owners to manage their properties without the need for real estate agents.

We provide the tools and advice to give private landlords the confidence to manage renting out their properties and save money in the process.

The internet allows people from all over the world to connect, share information and make transactions. We want to help make the process of renting  property easier for individuals rather than real estate agents. We want to help people to make informed decisions in regards to their homes and reduce their reliance on expensive intermediaries.

We’re building Truecasa because we know the frustration of dealing with difficult, expensive and unhelpful real estate agents. We see the barriers that have been created over the years to prevent property owners connecting with buyers and renters directly and the we want to bring them down.

Truecasa aims to make it easier for property owners and tenants to connect to each other.

Ned

*image courtesy of Flickr user JDickert