What you need to know about renting a home

Signing on the dotted line of your first lease is a milestone moment but this rite of passage can come with a number of questions and uncertainties.

By Alley Pascoe

  • Find the answers to common leasing questions, from what happens if you break a lease early to how to divide costs fairly between flatmates

  • What to check for, test and consider when inspecting a property to rent

How much of my income should go to rent? 

As a general rule of thumb when it comes to housing, aim to spend no more than 30 per cent of your income on rent so you have enough left to pay for living expenses, utility bills and savings. For example, if you earn $1000 a week, you could look at spending $300 or less on rent. 

What happens if I break my lease early? 

There are consequences for ending a fixed-term lease early. You may be liable for rent until new tenants move in or until the end of the fixed term (whichever happens first), plus advertising costs or letting fees. Break-lease fees vary from state to state and depend on how far into the fixed-term period you are. But you could have legal grounds for breaking a lease, such as undue hardship, domestic violence, landlord breaches or if the property becomes uninhabitable. Check the laws applicable in your state or territory. 

Who is responsible for repairs and maintenance?

Responsibilities are outlined in the lease agreement and it’s up to the landlord to provide a safe and fit living environment for their tenant. Generally, landlords take care of major repairs, except when the tenant has caused the damage. The tenant’s responsible for telling the landlord when repairs are required. 

How much notice do I get if my rent is going up? 

The regulations around rental rises differ between states but due notice must be given regardless of where you live. Generally, rent can’t be increased more than once every six or 12 months and tenants must be given 60 days’ notice (or 30 days in the Northern Territory). 

What do I need to know about referees?

In an ideal world, a tenant would include two referees on their application and those referees would be their most recent property managers. If you’re a first-time renter and don’t have a former property manager, you can list personal referees, which may include a boss, colleague, lecturer or mentor. 

Does everyone living in the house need to be on the lease? 

Landlords usually require every person (aged over 18) who is a permanent resident of a property to be on the lease. Residents can be leaseholders (with a legal obligation to uphold the lease) or approved occupants (who reside without these obligations). 

What’s a good plan for dividing costs fairly among flatmates? 

Equity trumps equality. Instead of splitting costs straight down the middle, consider a split based on equity. If one flatmate has a bigger room with an ensuite and a parking spot, they should pay for their additional amenities.

Inspection checklist

  • Check for: signs of damage, the state of appliances and any potential safety issues, such as working smoke alarms. 
  • Test: taps, lights, cupboard doors and windows. 
  • Look for: evidence of mould or pests. 
  • Consider: noise levels and parking availability. Photograph: the property and any existing problems for your records.

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This article provides general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as personal financial product advice. The views expressed by contributors are their own and don’t necessarily reflect the views of CBA. As the information has been provided without considering your objectives, financial situation or needs, you should, before acting on this information, consider the relevant Product Disclosure Statement and Terms and Conditions, and whether the product is appropriate to your circumstances. You should also consider whether seeking independent professional legal, tax and financial advice is necessary. Every effort has been taken to ensure the information was correct as at the time of printing but it may be subject to change. No part of the editorial contents may be reproduced or copied in any form without the prior permission and acknowledgement of CBA.