Question: I've never conducted a property inspection before. Where do I start?
While property inspections may seem like a daunting task for first-time landlords, making them a priority can help to protect your investment and ensure it remains profitable.
Property inspections should be conducted before the tenant enters the property, every three to four months while tenanted, and at the end of the tenancy.
Tribunals and insurance companies often use entry condition reports to compare the original condition of the property with any events that occur after the start of the lease.
Some insurance companies may also reject or reduce claims for malicious or accidental damage to a rental property if you have not lodged an entry condition report.
An entry condition report should therefore be completed by you and your tenant before they move into the property.
You can obtain standard entry condition report forms by contacting your residential tenancy authority in your state or territory.
Use the form to accurately record the condition of the premises documenting any wear and tear, cleanliness, the working order of fixtures and any household items you have left for the tenant to use.
The more detailed the reports are, the better, so take as many photos and videos of the property as you can.
Your tenant should then be given a copy of the report for them to review and sign accordingly if they agree with its contents.
It can be a good idea to give your tenant a ‘welcome pack’ before they move in containing the lease agreement, a copy of the entry condition report that has been completed by you and information about follow up inspections throughout the tenancy.
Ongoing inspections, scheduled every three of four months, can make it easy for landlords to quickly identify if and when any damage to the property has occurred and if there are any maintenance issues that may need attention.
Firstly, it is important to ensure you are familiar with legislation relating to conducting property inspections in your state.
You should give your tenant written notice that you intend to inspect the property seven to 14 days before the inspection.
Let your tenant know that they are not required to be present at the inspection and give them the opportunity to leave you a list of any issues they would like you to look at if they decide not to attend.
Plan to conduct the inspection in between the hours of 8am and 7pm and take a copy of the tenancy agreement with you so you can refer to it if any repair or maintenance issues arise.
When inspecting the property, it's also a good idea to look out for the following:
Ensure the property is clean and that there are not excessive amounts of rubbish stored within its perimeters. Rubbish removal can be expensive and hiring a professional to dispose of it is rarely covered by insurance.
All insurance claims for damage - malicious or accidental - should be accompanied by comprehensive labelled photographic evidence.
Property managers will be able to assist the landlord in collecting evidence as soon as possible after the event has occurred if the property is inspected on a regular basis.
Injury or loss resulting from a safety hazard that has not been attended to may give rise to a costly legal liability claim for the landlord. Check that all smoke alarms and security locks are in working order and that gardens are safe to reduce the risk of harm to the tenant.
In some states certain appliances such as air conditioners and water saving devices are mandatory for rental properties. Monitoring them during inspections will help to identify when they need to be repaired so landlords can be notified before any penalties are imposed.
Damage to a rental property caused by an animal is often not always covered under landlord insurance policies.
If it is suspected that an animal is housed at the property, look for fur on furniture and bedding, water bowls, urine stains on the carpet and outside, or speak with neighbours.
Take photos and video footage of any malicious or accidental damage you notice at the property, as comprehensive evidence may be required if you make an insurance claim.
The inspection should then be documented in a report, and a copy should be given to the tenant.
Inspections should also be conducted after the tenant vacates the property.
If all the conditions of the tenancy agreement have been met by the tenant and the property was left in good order, the bond should then be returned to the tenant.
Outgoing condition reports with supporting photos and videos can be used as evidence if there are any outstanding issues at the end of the lease and you decide to retain the full or part of the bond.
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Carolyn Parrella joined Australia's leading landlord insurance specialists, Terri Scheer Insurance, in 2004 and was appointed Executive Manager in 2009.
Carolyn oversees all operations within business, which aims to protect landlords against the risks associated with owning a rental property. These include malicious damage by tenants, accidental damage, legal liability for occurrences on the property that cause death or bodily injury, and loss of rental income as a result of damage to a property or a tenant absconding.
As a South-Australian based national insurance firm, Terri Scheer Insurance is the only company in Australia to specialise solely in landlord insurance.
Carolyn also owns two investment properties.
For further information, visit www.terrischeer.com.au or call 1800 804 016.