5 Factors to Consider Before Becoming a Landlord 

If you're thinking about diversifying your investment portfolio by purchasing a rental property, it’s important to go in with your eyes wide open. Becoming a landlord is not just about buying a property, finding a tenant, and watching the rent roll in to cover your mortgage. While you may secure a low-maintenance property with strong rental yield, the reality can often be more complex.

Here are five essential factors to consider—now fully updated to reflect the 2025 NSW rental reforms:

1. Define Your Investment Strategy

Before entering the property market, speak with your financial advisor to develop a clear investment strategy. They'll help you determine your borrowing capacity, set a realistic budget, and may offer advice on high-growth or high-yield locations.

Location will heavily influence both the purchase price and potential rental return. Research different areas and consult with local real estate agents to understand if your investment is likely to be positively or negatively geared.

Keep in mind that rental increases are influenced by market demand—not necessarily tied to rising interest rates. Under the new May 2025 NSW tenancy reforms, rent increases are limited to once every 12 months for periodic agreements, and tenants must be given 60 days’ written notice. This makes it even more important to assess whether your investment can remain viable with changing costs and rental timelines.

2. Prepare for Ongoing Costs

Owning an investment property comes with ongoing responsibilities. From minor issues like leaking taps to major costs such as roof repairs or a burst hot water system—landlords are legally required to keep the premises in a reasonable state of repair.

Regular maintenance and budgeting for the natural lifespan of items—such as carpets, paint, kitchens, and appliances—is essential. Having a savings buffer set aside for both scheduled and emergency repairs will help reduce financial stress and ensure you remain compliant with tenancy law obligations.

Under the updated reforms, landlords must also respond to urgent repair requests promptly, and tenants may now arrange urgent repairs up to $1,000 (previously $500), seeking reimbursement with receipts provided. This makes proactive maintenance and communication with your property manager even more important.

3. Understand Legal Responsibilities

The 2025 reforms have significantly reshaped landlord obligations in NSW. Here are some key updates every new landlord should know:

• "No grounds" evictions for periodic agreements are no longer permitted. Landlords must provide a valid reason for ending a tenancy, such as sale, major renovations, or breach of agreement.

• Minimum notice periods have changed—landlords must now provide:

  • 60 days for ending fixed-term leases at the end of term (with a valid ground),

  • 90 days for ending a periodic agreement with a prescribed reason,

  • 120 days notice if planning to move in or for renovations (with evidence).

• Disclosure obligations have been expanded, including informing tenants of pending sales or plans to list a property for sale.

• Mould and dampness must be addressed promptly, with evidence that the property meets minimum standards of cleanliness and safety before a new tenancy begins.

Being across these changes is essential to avoid fines, disputes, or delays in re-letting.

4. Hire a Professional Property Manager

A skilled property manager is your frontline defence against legal risks, vacancy losses, and avoidable maintenance costs. Their expertise in NSW tenancy law, particularly with the new 2025 reforms, means they can guide you through your obligations while helping you maximise your rental income.

From screening tenants, managing rent reviews, arranging timely repairs, to navigating disputes—they do the heavy lifting. They also keep you compliant with your responsibilities under legislation and maintain a strong tenant relationship, which can reduce turnover and increase returns.

Most importantly, property managers ensure that rental increases, notices, repairs, and lease terminations are issued correctly in accordance with current legal requirements.

5. Plan for the Long Term

Investing in property should always be a long-term decision. Consider how changes to legislation, interest rates, local infrastructure, and tenant rights may impact your ability to generate stable returns. With the new reforms giving tenants increased security and protections, it’s more important than ever to be a responsive, proactive, and informed landlord.

Being hands-on isn’t necessary—but being well-advised is. Make sure you're working with professionals who can support you through each step of your investment journey.

Thinking of Becoming a Landlord?

If you're ready to explore the world of property investment, reach out to our sales team to view our current listings. We can also connect you with our experienced property management team to help you confidently manage your investment under the latest NSW rental legislation.

The Sternbecks team of licensed professionals is always here to help!