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By Catherine Rayward

Do you know how much your investment property is costing you?

A common rule of thumb is that each year you should spend roughly one per cent of your property’s value maintaining it. Assuming all of Australia’s property investors are sticking to this figure, they’re spending $15.6 billion in total or $7,685 each on investment property maintenance each year.

That’s a massive chunk of money, so as an investor, it pays to understand what repairs you’re responsible for to avoid unnecessary spending.

Regardless of where your investment property is located, you must:

  • Provide the home in reasonable repair and in a reasonably clean state, fit for tenants to live in
  • Maintain the premise in reasonable repair – even if you or your property manager has made the tenants aware of any disrepair before they moved in
  • To make any repairs agreed upon in the condition report or tenancy inspection
  • As with most laws, the wording of the phrases above is open to interpretation. The definition of reasonable repair, for example, can depend on the age of the premises, the amount of rent your tenants are paying and the potential life of the building, according to Tenancy NSW.

That means older buildings, rented at a cheaper rate, may be held to a lesser standard when maintenance is concerned.

The best strategy is always to use your common sense, and be empathetic with your tenants. Make sure the rental property is provided and maintained to a level that you’d be happy to live with.

Under most state laws, tenants must:

  • Keep the property reasonably clean
  • Tell the landlord or property manager about any damage or disrepair as soon as possible
  • Leave the property as near as possible to the condition in which they found it, except for fair wear and tear
  • Not damage or permit damage to the premises deliberately or through negligence
  • Not add or remove fixtures, renovations or alterations without the landlord’s written consent
  • It’s important to note that it’s your responsibility, not the tenant’s, to repair damage as a result of fair wear and tear.

Fair wear and tear is defined as damage resulting from the reasonable and correct use of the property over time. This includes the carpet wearing from being walked on, curtains changing colour in the sun, or paint on the home’s exterior cracking over time.

If the property is found to not be in reasonable repair through no negligence or intentional action by the tenant, then it’s the landlord’s responsibility to fix the problem. The nature of the repairs will determine whether or not they must be fixed urgently, which is generally defined as within three days.

Urgent repairs include: any breakdown of gas, electricity or water supply or anything that causes a failure of essential services like hot water, cooking or heating. Fault or damage that makes the premises unsafe or unsecure and serious damage from natural disasters is also defined as urgent.

Non-urgent repairs, on the other hand, should generally be seen to within 14 days by the landlord or property manager.

It can be difficult to apply the law to everyday situations, especially when it’s full of vague phrases like ‘reasonably clean’ or ‘fair wear and tear’. To give you a better idea of how tenancy law might apply to your investment property’s repairs we’ve prepared a few examples:

  • Mould:  if mould occurs as a result of structural problem with the property that was not caused by the tenants it is the landlord’s responsibility to fix it. If mould has spread as a result of tenants not keeping the property reasonably clean, by say leaving wet towels on the floor, fixing it is the tenant’s responsibility.
  • Lightbulbs: tenants are generally responsible for changing lightbulbs, unless doing so requires specialist knowledge or equipment.
  • Gutters spouting: If these fill up with leaves, or fall into disrepair over time, fixing them is the landlord’s responsibility.
  • Interior and exterior paint: if the paint fades or cracks over time this is defined as general wear and tear and it’s the landlord’s responsibility. If the tenant has scratched or otherwise damaged the paint intentionally or through carelessness, fixing it is their responsibility.

A working understanding of tenancy law and is essential to maintaining your investment property cost effectively, and to making sure your tenants are happy. For help keeping your maintenance costs down and keeping your tenants, get in touch with an experienced local property manager.

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