Your Guide to Private Rentals

A private rental is when the landlord manages their own property without a real estate agent or property manager. The Australian Bureau of Statistics data shows about one-third of property owners in Australia manage their own property. The landlord deals directly with the tenants. The landlord vets the applications and chooses which tenants they have. The landlord completes all the paperwork and manages the issues that arise with the property.

With any investment decision, whether to have a private rental or an agency manage it for you has pros and cons.

Benefits of a private rental

Being closer to the process, cost savings, and keeping an eye on your rental property are all benefits of private rental.

Saves money

You could save thousands of dollars every year by listing a rental privately. Letting agents will take anywhere between five to 12 per cent of the weekly rent in fees. Instead of paying fees to the agency, the percentage of weekly income that covers management fees goes to you when you lease privately.

Be across issues

Private landlords tuned into their property will know about issues or problems as soon as they arise instead of relying on the agent to pass on the information.

Hand-pick tenants

Owners in the private rental market can screen potential renters themselves rather than rely on anyone else’s judgement. You can choose the most suitable tenants based on your personal preferences.

Downsides of a private rental

There are legal responsibilities and a lot of work to self-managing your property, so you need to be aware of the negatives before deciding to have a private rental.

It’s personal

Private landlords must negotiate tricky issues like lease agreements, rent increases or evictions, which can be very uncomfortable, especially if you’ve developed a good relationship with your tenants. It can be extremely difficult in tough economic times when you know the tenants personally.

Estate Agents or Property Managers can remain professionally unemotional about the issues.


Each state has different tenancy laws and knowing all the legislation involving private rentals can be very complex. A landlord has legal responsibilities that must be met, and it could be easy to unknowingly break the law if you do not know the legislation.

Property managers have a good understanding of rental laws in their area as they deal with these daily. They also get notifications of recent legislative changes that impact landlords and tenants.  

How to list a private rental

In the past, private landlords relied mainly on word of mouth, social media, or online selling platforms like Facebook Marketplace or Gumtree to advertise their properties.

Landlords now have the choice of online property portals that act as a classified and are the strongest form of marketing. They can create, edit, and save their listings, so it’s easy to relist the same property in the future. You can also receive tenant enquiries via email, phone, or SMS.

Why is using an agent to rent out your property wise?

While many property investors manage their rentals, most Australians still rely heavily on agents.

Investing in an expert to manage your property can be a wise decision.

The reasons investors should pay a property manager to handle their property include some of the following:

  1. It saves time & money

As well as dealing with rent collection and minor tenancy issues, private landlords have to deal with the big issues like major maintenance or even going to a tribunal. This can take up much time and can feel like a full-time job. Many people cannot afford the time running a property can take up.

A good agent will save landowners money and help them make a larger profit due to expert pricing advice, leasing knowledge and negotiation skills. Agents can also create maintenance contracts with reputable tradespersons for all of the properties they manage, which can lead to savings compared to organising maintenance contracts for a single property. 

Property managers will charge a percentage of the weekly rent for complete property management (usually between 4% to 8%), plus a fee of up to two weeks’ rent for leasing the property. 

  1. You get an expert on-call

Having a property manager means you have an expert in the industry who will be on top of all required legislation. This gives property owners peace of mind.

It is helpful to have someone on call to ask questions when you are unsure of your responsibilities as a landlord.

  1. Quality tenants are a given

Every landlord wants tenants who pay on time and take excellent care of their property investment. Agents are experts in selecting quality tenants and can access national databases listing bad tenants to weed out the tenants who may not pay rent or damage property.

A private landlord has a limited opportunity to vet potential tenants. They may be unable to pick up on clues that a tenant will be good or bad, especially if this is your first investment property. Bad tenants can be very charming and plausible at first. 

  1. The referrals are powerful

Your property investment is your future.

How to pick a good agent

One of the best ways to pick a good agent is to ask for referrals from people you trust.

Explore whether your friends or relatives own an investment property. If they do, who do they use and do they recommend them? You can find the top three most active agents in your area by searching current lease properties online. Visit each agent and compare their fees and experience. Look for an agency offering a quality team with the knowledge to manage your property successfully.

Managing a rental property without an agent

While property managers handle most rental properties in Australia, one-third of owners across the country opt to do it themselves.

You can manage your own property by dealing directly with your tenants.

The benefits of managing your own property

Landlords gain by managing their properties, especially by not paying commission costs to agents and property managers. Agent fees are a percentage of your weekly rental income, but you can keep this money if you manage your own property.   

You can screen the tenants yourself and select who you want to rent to. Private landlords can develop closer relationships with tenants, encouraging the tenant to pay rent on time and take better care of your house.

Being more involved also means owners can keep across any issues.

You’ll be the first to know if something goes wrong, such as a leaky pipe or a broken fixture. You will also be the first place a neighbour will call if there are complaints about your tenants, giving you more involvement in the day-to-day management of your investment.

Things to look out for

Although DIY management can save an owner money, it is important to understand everything involved before deciding to do it yourself.

Managing a property is time-consuming. You need to book inspections and keep up with general maintenance and repairs, and you will need to be available to deal with emergency issues outside of hours and at weekends.

Tenancy legislation changes frequently, and private landlords must be aware of any changes impacting their property. Serious penalties can apply if you break the law as a landlord, and pleading ignorance of the law is not an excuse.

A private landlord is emotionally invested in managing the property, which can be difficult when you need to make tough decisions, like managing disputes or communicating rent increases. If you have to evict a tenant, this can be both time-consuming and highly stressful, especially as you will know the tenants personally.

How to find a tenant

Tenant selection can mean the success of an investment property or its’ failure.

You can either engage a real estate to find a tenant for your property or join the 33% of landlords who manage their own properties.

Here are some tips for finding a tenant.

  1. Present the property well

Presentation is essential in getting the right sort of tenant who will care for your investment property.

Well-presented properties with no obvious repairs or maintenance outstanding will attract the best tenants. Give current tenants an incentive to present the property well for the marketing of the property. You may send a professional cleaner or a gift to encourage the tenants to help show the property in its’ best light.

  1.   Use professional photography

Professional photography will provide high-quality images of the property for advertising. You can have a professional photographer visit and provide digital photos with a small outlay. Check with your accountant or financial advisor if this is a tax-deductible expense.

If you are looking for a place to rent, you’ll be more likely to look at a house with bright, professional photography.

  1.   Find a skilled real estate agent

If you choose not to self-manage the property via a private rental agreement, you’ll need a good agent who is experienced and skilled in managing the property.

For a small weekly, and often a tax-deductible fee, owners can have their property looked after by a professional.

In addition to collecting the rent, they handle maintenance requests, and deal with issues during the tenancy. They also do the negotiating, routine inspections, reporting, listings, taking prospective tenants through, processing applications and conducting entry and exit reports. And most importantly, they understand and must abide by legislation.

Different laws in different states govern residential tenancies, so you want someone who knows their craft.

  1. Select the best tenant

There are fundamentals to follow to ensure you pick the right one for your dwelling.

Their presentation, ability to pay the rent, job security, strong rental history and references are all key. Not every applicant is created equal.

Carry out all the necessary checks and consider all cases and circumstances.

Nine unexpected costs landlords often don’t see coming

What can landlords actually claim on insurance?

If you suddenly discover your investment property is being used for illegal purposes, you’ll need a game plan.

Here are some ideas on how to solve these issues:

  1. What happened to the rent?

Sometimes you have a tenant who disappears. Perhaps they’ve stopped paying rent, left, in the worst-case, passed away.

Before getting the debt collectors involved, chat with your insurance team to claim any lost payments.

  1. The tenant leaves… but their stuff doesn’t

If your tenant suddenly vacates, but their belongings remain, you may need a hand physically and financially to move the furniture.

  1. Your tenants are running a drug lab

While uncommon, this can actually happen!

Technical cleaning or removal and repairing damage can be quite expensive.

Check that your policy covers damage related to manufacturing, storage or distribution of illegal drugs.

  1. Someone passes away

You may need to consider several things in the event of a death. Firstly, check if your policy covers rental default.

Are the circumstances of the incident linked to your property? Check that your landlord insurance policy has liability coverage. Some insurers will cover cleaning up after an accident or death.

  1. Pet damage

Dogs and cats can cause accidental damage. As rules related to pets on rental premises continue to relax, you’ll need to ensure your property is protected.

As a result, pet damage will become an important feature of your insurance policy.

  1. When your friends bring pets over

Refer to the above.

  1.   Home robbery

Check if you’re covered if your tenant takes your belongings like furniture, appliances, or even fixtures from the home.

  1. Black mould 

Mould is a serious issue. If it infects a rental property, the landlord is responsible. You can’t typically insure for mould issues, but there are exceptions.

  1. Acts of nature

Nobody expects their property to be damaged by flames or water, but it happens, and it is always costly.

You’ll want to be prepared financially, so ensure you get cover for the unexpected.

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