New residential tenancy regulations in Victoria give investment property owners the opportunity to maximise the value of their rental properties.
From March 2021, new residential regulations have now come into effect in Victoria. The changes clarify what is required of renters (previously known as tenants) and rental providers (aka landlords), from the beginning of a rental agreement/lease until the day it ends.
All types of rental arrangements are covered by the new laws, including private rentals, caravan and residential parks, and rooming houses.
The changes are extensive and may feel like they make life more difficult for investment property owners who lease their asset to renters. However, there is a silver lining which plays out in favour of rental providers who ensure their properties are compliant.
An overview of the new residential regulations
The changes to residential tenancy laws include a ban on rental bidding, new rental minimum standards, no eviction without a reason, allowable modifications by renters, and urgent repairs.
They also cover maximum bond amounts (one month), requirements for keys and security, and what has been termed ‘rental minimal standards’. Going forward, the home must be structurally sound, free from mould and include a supply of hot and cold water, among other things.
More issues are now considered an urgent repair, such as a broken cooling appliance, a faulty smoke alarm or a pest infestation.
The new laws aim to improve safety by enforcing regular inspections of gas appliances, electrical services and smoke alarms.
There is a great deal more. You can find a full guide to the changes here: https://www.consumer.vic.gov.au/housing/renting/changes-to-renting-laws/guide-to-rental-law-changes.
The benefits for rental providers
Being required to upgrade a property and schedule essential safety checks may seem like a lot of expense and additional work, however the new laws have been created because it is expected more and more Victorians will become long term renters.
With people expected to stay longer at rental properties, your goal as a property owner is to attract the best of the best… and to keep them.
Your renters will now be able to make some modifications without asking you and it has become easier for them to have pets.
In light of this, it is within your interest as a rental property provider to ensure your property meets or exceeds the minimum standards and attracts the kind of renters who will respect and care for your property.
If your property is kept in exemplary condition and frequented by friendly, reliable and well-informed tradespeople, you will be far more likely to attract a higher number of rental applicants. This allows you to be choosy and lock in renters who respect your home and care for it like it was their own.
When seeking new renters, if you can demonstrate you show compliance with all legislation by showing maintenance and repair certificates, you are establishing an environment of mutual respect and care around your investment.
Advertise your property as fully compliant with rental legislation and you will rise above the competition so you can attract long term renters who are willing to pay a premium.
Consider achieving compliance as an ‘investment in your investment’. Ensuring your rental property meets and even exceeds minimum standards will result in it being easier to rent for a higher price, giving you rental returns which can help you become cash flow positive.
Find the best renters
Renters are well aware of the changes, with advocacy groups encouraging them to ensure their rental providers are compliant. Set your property as a leader in the market by working with your tradespeople to ensure you don’t breach any rules (if you self-manage) or by checking with your property manager to confirm everything is taken care of.
A renter who knows you value their comfort, safety and experience while living in your property will provide value and stability for your investment in the long term.
