Guide to Property Investing in South Australia

Landlord insurance

Why do I need Landlord insurance if I have an agent?

We at no time can guarantee your tenant’s performance at your property. The risk belongs to the owner of the property, and therefore the owner should be insured for such a risk.

Your management agreement also obliges the owner to ensure they are fully and adequately insured.

Why do I need landlord insurance if I have a good tenant?

Even a good tenancy can turn bad. If the tenant’s circumstances change sometimes the tenancy will become unstable. This can result in rent owing and the property not maintained.

It pays to be properly insured, even with a good tenant.

What does landlord insurance cover?

Landlord insurance will cover rent loss due to tenant default and malicious damage to the property caused by the tenant.

It is important for you to know what your landlord insurance policy will and won’t cover. Please consult with your landlord insurance so that you are fully aware of the extent of your cover and also any excess that may be applicable in the event of a claim.

Smoke alarms

What type of smoke alarms should be fitted?

We always ask that a hard-wired alarm be fitted to all rental properties; due to the high chance of a tenant tempering with a removable battery powered alarm (9-volt battery powered alarms).

In the case where a hard-wired smoke alarm cannot be fitted, then it is remain recommended that a 10 year lithium battery operated alarm be installed. This type of alarm is easily fitted like a 9-volt type alarm, but the 10 year lithium alarm has a battery sealed inside that cannot be removed.

Why can’t I just have the cheapest smoke alarm possible?

Legislation provides that properties built after January 1995 be fitted with a hard-wired smoke alarm.

Properties sold on or after February 1998 can have a hard-wired smoke alarm or 10 year lithium alarm installed. Properties sold before this can have a 9-volt smoke alarm installed.

However, due to the common problem of tenants removing and not replacing the batteries to these alarms, we believe that these types of alarms have a high chance of not working if there is a fire.

Therefore to provide the highest chance possible smoke alarm work in case of fire, we insist that hard-wired alarms be installed. You might comply with legislation but we are not safe with tenant tampering with batteries.

Please let us know if you would like us to arrange for hard-wired smoke alarms to be fitted into your rental property.

Pest control services

Should i get my property regularly checked for termites?

Yes! We strongly recommend all of our clients choose a pest control service and request that they regularly check your property for termite activity at the frequency they recommend.

Unfortunately we do not contract them to do this on your behalf, unless you specifically instruct us to do so each time it’s required. We are working on adding this to our yearly maintenance reminders.

Please note, it is a general exclusion of all building insurance policies that damage to your property caused by termites is not covered (not insurable).

Therefore regular checking is the best way to prevent termite damage, or at least attempt to identify warning signs that termites are creating damage.

Without this the damage could be substantial and very costly to rectify.

Costs incurred at my rental property

Who pays for electricity and gas charges?

These are the tenants expense. However if there are charges relating to the supply of the services to a property, the supplier charges are at a landlord cost.

A good example of this is if a property has bottled gas supplied. The tenant pays for the gas in the bottles; however the landlord would be responsible for the charges related to the gas bottle rental. This is a charge associated with the supply of the gas.

Also if you’re moving out of your property and you have your own gas bottles remaining, please remove them. There is a high chance that these bottles will be accidentally removed by gas bottle supply company, giving room for an avoidable dispute with your tenant and missing gas bottles. Let the tenant arrange their own rental bottles.

Who pays for water charges?

Water consumption charges are agreed between the landlord and tenant.

In South Australia, Metropolitan and most regional townships have water supplied by SA water. SA water charges three levels or tiers of water costs per kilolitre (KL) for the first 30, from 31 to 130 KL and 131 KL and over used in a quarterly period.

Where gardens and lawns are involved, we do advise that the landlord pay for water usage up to and including the first 30 KL per quarter. This is ‘allocated’ for usage on the garden. Water used above this at the higher rate would be charged at a tenant expense.

Some landlords wish to charge the tenant for water cost. This is optional; however we do believe that an incentive should be given to the tenant to ensure the garden remains healthy.

The quarterly SA water supply charge can also be passed onto the tenant for reimbursement by the tenant, if this is first agreed upon in the tenancy agreement by both parties.

It is important to be aware that with the change of legislation on the 1st March, 2014, we can only request payment for water from the tenant within three months of the date of issue on the SA water invoice.

How do you calculate what water charges the tenant has to pay?

At the commencement of a new tenancy, we take an initial water reading at the property. Upon receipt of the SA water invoices, we calculate water usage based on the difference between initial reading and invoice reading, and charge the tenant accordingly.

Current rates for the three tiers of charging can be gained on the SA water website

What about council and sewerage rates, and the emergency services levy?

All these costs must be paid by the landlord as specified by legislation.