The Need for … Residential Tenancy Agreements

For ‘Mum and Dad’ property investors in the Northern Territory, it can be tempting to forego having a residential tenancy agreement with tenants. However, as interest rates continue to rise, it is essential that these agreements are put into place.

Having clear guidelines outlined in a rental agreement helps protect both landlords and tenants by ensuring expectations are met from both sides. Such an agreement lays out the responsibilities of both parties and specifies the amount of rent that must be paid, when it should be paid and any fees or penalties associated with late payments. This prevents misunderstandings or disputes arising later.

In times of rising interest rates, having a residential tenancy agreement is even more important as it protects tenants from unexpected increases in rent. The agreement will clearly define the terms governing any rent increases, thus avoiding disagreements further down the line.

In addition to protecting both tenants and landlords, having a residential tenancy agreement can help improve the landlord’s credit rating by helping to ensure that payments are made on time. By setting out clear expectations up front, landlords can avoid missing payments or having to take legal action against tenants.

Overall, ‘Mum and Dad’ property investors – either themselves or through their property managers – must ensure they have a residential tenancy agreement in place with their tenants in order to protect both parties from unexpected financial costs caused by rising interest rates. With clear guidelines set out up front, it will be easier for all involved if any disagreements should arise. Ultimately, having an agreement in place is key to ensuring the best long-term outcome for both landlords and tenants.

Do you have a question about an investment property? If so, please call Eleanor Rushforth or Samantha Hansen on (08) 8941 6355 or email eleanor@bowden-mccormack.com.au or sam@bowden-mccormack.com.au