Archive for the ‘Property Management’ Category

When media reports start talking about static or falling home prices, many homebuyers think that it’s a good idea to watch the market and wait for it to reach the bottom. They feel that if they postpone their purchase long enough, they are likely to see prices fall further and snap up a ‘real bargain’. 

While bargains do exist, of course, for people who are in the right place at the right time, there are often more people who miss out by using this strategy than gain.  Most homebuyers buy their family home and live in it for, on average, seven to ten years.  And when we’re looking at averages, the property market continues, in the big picture, to rise. Based on historical property cycles, property may undergo periods of static growth and periods of galloping growth, but on average, well-located, well-selected residential property doubles in value every ten years or so. Certainly, if we could always pick the lowest time to buy and the highest time to sell we would do very well indeed, but the only buyers who need worry about the immediate state of the market are the real estate speculators who wish to buy then sell again straight away, or those who are too highly geared or who have entered into unrealistic amounts of debt. For everyone else, the chances of strong long-term capital gain are virtually assured, provided they buy well-selected property in well-selected locations.

It’s famously difficult to pick the ‘bottom’ of the market. Often buyers who wait find themselves having little to choose from as listings get scarce – and a sudden flurry of competition for the few desirable properties actually on the market for sale often causes them to sell for higher prices than expected, even in a market described as a difficult one for sellers.  Buyers end up paying more than they bargained for if they  keep on watching and waiting;  because the ‘flurries’ they waited out were signalling an upturn in the market or the end of the halcyon days for buyers.
 
Purchasers who wait too long for a ‘bargain’ or the ‘lowest point of the market’ often only realise that the lowest point has already been reached once they can look back on it with the 20/20 vision of hindsight.

This blog post is brought to you by Raine & Horne Glenelg, your Glenelg Ragement Expertseal Estate Agents and Glenelg Property Management Experts.

“It’s sometimes hard to work out when interviewing a new Glenelg Landlord, why they may feel vaguely dissatisfied with their incumbent property management service” said Ms Bonet Principal – Raine & Horne Glenelg.

“When you sart talking to them you know straight away it’s not working for them, but you can’t put your finger on why?”

“Our experience with our Glenelg Property Management business is that most property investors want to communicate with one person for their day-to-day needs” said Ms Bonet. ”They don’t want different jobs to be managed by different personnel (task management); they want their whole portfolio to be looked after (whether they own one property or several) by one person who is responsible for all tasks relating to their properties – arrears, re-letting, repairs and so on”.

When it comes to hiring a property manager, here is a checklist you can run through to reassure yourself that your agent is doing the best thing by your investment. Here’s a checklist thatall Property Investors should ask themself;

1. Does your property manager talk to you on the phone or does he/she send emails or text messages? Most landlords are baby boomers and prefer to discuss things directly when there is a problem so if you feel your property manager is hiding behind emails or text messages when you need to talk, let them know.  
    
2. Do they respond to your requests quickly? Property managers who take longer than half a day to respond to phone calls and emails are letting you down.
    
3. Most landlords prefer minimal vacancy; it’s obvious that even a week’s vacancy is money that will never be recouped.  If your property is vacant, don’t let your property manager ‘give it another week to see how we go’. If it isn’t rented in 10 days, it’s time to drop the rent by 10%.
    
4. Are you getting the best referenced tenants? Keeping the rent at 95% of market value minimises arrears, vacancies and maintenance – and therefore increases net return although the rent is slightly below market. Landlords who go for the highest rent lose money in vacancies and repairs – so check that your agent isn’t setting the rent too high.
    
5. Does your property manager keep you informed about further ‘good’ investments? This could be via an email with links to their website and properties for sale.

This blog post is brought to you by Raine & Horne Glenelg, your Glenelg Real Estate Agents and Glenelg Property Management Experts.

Moving into a new a home or out of an old one is commonly ranked in amongst the top 10 most stressful things that many people experience. Connecting or disconnecting electricity, gas, telephone, internet and cable television services and organising removalists are just a few of the challenges that moving house brings.

This short video gives details of an excellent FREE real estate service that removes the time consuming work and stressful issues associated with these and other moving challenges and gets you into (or out of) your property sooner and with complete piece of mind.

This is another in a series of short videos from Raine & Horne South Australia’s Team that give useful and practical real estate tips to help people get the best result possible from their real estate experience.

For more tips, hints, market updates and media scoops follow @rhSA_CEO on Twitter or call Raine & Horne Glenelg, your Glenelg Real Estate Agents and Glenelg Property Management Experts.

When a tenant moves into a property, both the tenant and the managing agent/landlord are required to complete a condition report.

“This report is an extremely important document as it is a record of the condition of the premises at the start of the tenancy” said Ms Bonet, Principal of Raine & Horne Glenelg.

Ms Bonet said “When completing a condition report it is not a quick process of ticking and flicking that everything is clean, working and undamaged.  Extreme caution and time needs to be taken to describe all of the fixtures and fittings.”

This includes:

• The colour of the carpets and walls,
• A full description of the window coverings and light fittings,
• Detailed information on appliances, including the make and model,
• A list of any inclusions, etc.

“If you fail to adequately describe the inclusions, fixtures and fittings it can cause unnecessary disputes at the end of the tenancy or lead to a possible financial loss for the property owner” said Ms Bonet.

“For example, if you just tick window coverings as being good and undamaged and fail to describe them, the tenant can leave any form of window coverings when they vacate.” “Or if the tenant decides to paint a bedroom hot pink and the condition report just has walls ticked as good, you will be unable to enforce that the walls be returned to the original neutral colour, as the tenant decide to be difficult and disputes it” said Ms Bonet.

The more detailed the condition report, the easier it will be to over-come pending disputes at the end You can be confident that our property management team are very thorough when completing condition reports to protect your investment.

As well as describing the fixtures and fittings, it is equally important that the property is presented in a clean and safe condition from the outset. 

Upon vacating, the tenant is required to leave the premises in the same condition (allowing for fair wear and tear) as it was at the commencement of the tenancy. If the property was not clean, the lawns were not mowed, there were weeds in the garden and marks on the walls, then the tenant can leave the property in the same condition – or often they leave it worse with no recourse for a claim.

Ms Bonet said “Once again, you can be confident that our office is constantly working towards protecting your investment, which includes our team taking a little extra time and effort to be thorough with our documentation when a tenant moves into the property.”

This blog post is brought to you by Raine & Horne Glenelg, your Glenelg Real Estate Agents and Glenelg Property Management Experts.

“You can claim a deduction for certain expenses you incur for the period your property is rented or is available for rent”  Monika Bonet, Principal of Raine & Horne Glenelg said.

Ms Bonet further noted “However, you cannot claim expenses of a capital nature or private nature – although you may be able to claim decline in value deductions or capital works deductions for certain capital expenditure or include certain capital costs in the cost base of the property for capital gains tax (CGT) purposes.”

Types of rental expenses

Ms Bonet stated that there are three categories of rental expenses – those for which you:

• cannot claim deductions
• can claim an immediate deduction in the income year you incur the expense
• can claim deductions over a number of income years.

For a detailed understanding of all rental property expenses Ms Bonet  recommend that you visit the following web link of the ATO and download a copy of their 2008

http://www.ato.gov.au/content/00131327.htm

This guide explains how to treat rental income and expenses, including how to treat more than 230 residential rental property items.

This blog post is brought to you by Raine & Horne Glenelg, your Glenelg Real Estate Agents and Glenelg Property Management Experts.

Most investors agree that successful ownership of residential rental property is all about maximising long term net income.

“Novice investors and property managers often simplify what is a complex interplay of forces and focus on the amount of rent being achieved right now,” Monika Bonet, Principal of Raine & Horne Glenelg said. “Because tenant harmony is a crucial part of the income equation, most experts agree that setting rent at 95% of market value usually achieves a higher income long-term than holding out for a 100% or more. Tenants paying top dollar are more likely to be finicky about the standard of the property, and make more demands for repairs and improvements. Furthermore they tend to start looking around to see what else is available for the money and move on if they find better value.”

Ms. Bonet said that the more often a property is vacant, especially if the advertised rent is high, the more chance there is of vacancy and loss of income.

“Even a few weeks vacancy per year can significantly reduce the investor’s return, thereby requiring an even higher rent to make up for it and setting a negative pattern in motion,” Ms. Bonet said.

According to Ms. Bonet a related factor that is often poorly handled by novice investors is the market rent review.

“Property investment managers carry out market rent reviews on a regular basis and the rents are raised according to supply and demand,” Ms. Bonet said. “Novice investors often think the best approach to raising the rent is to make frequent small increases, but these are seen by tenants as penny pinching and lead to disharmony, increased demands for repairs and higher vacancy over the long-term. Experts say that in most cases rent increases should occur when market indicators show that a 5% increase is warranted.”

Ms. Bonet said that experienced property managers report that the most stable income and long term optimum return is gained by investors who follow the advice of the experts they have selected to manage their investments.

This blog post is brought to you by Raine & Horne Glenelg, your Glenelg Real Estate Agents and Glenelg Property Management Experts.

Everybody knows how to check a tenant’s references. Don’t they? After all, secure tenancy forms the foundation of successful investment.

 ”In fact, it’s often a case of a little knowledge is a dangerous thing,” Monika Bonet, Principal of Raine & Horne Glenelg said. “Many people don’t know which questions to ask and how to analyse the information they end up with. Investors need to feel confident their property manager is experienced – after all maximising investment income is entirely dependent upon keeping arrears, vacancies and repairs and maintenance to a minimum and yield and capital appreciation at a maximum.”

Ms. Bonet said that two most important background checks are previous rental history and employment record.

“This sounds straightforward but there are many traps for the inexperienced – it comes down to knowing what the information means in terms of tenant performance,” Ms. Bonet said. “For example tenants might pay their rent up to date upon vacating but might have been a problem during the tenancy. Or someone might be in full time employment for many years and still not be a good tenant. One or two factors are insufficient to build up a profile of the prospective tenant. But too much information might see someone turning away potentially good tenants and ending up with a longer vacancy. Landlords managing for themselves often get too involved to be impartial.”

 According to Ms. Bonet the mistake most inexperienced people make is to rely on personal references.

 ”In all my years of managing property I have never seen a bad personal reference,” Ms. Bonet said. “Friends and relatives just don’t write negative things about those close to them and even if they do prospective tenants are not going to offer bad references to landlords or agents.”

This blog post is brought to you by Raine & Horne Glenelg, your Glenelg Real Estate Agents and Glenelg Property Management Experts.

Watch this Video to hear from Raine & Horne SA’s CEO Kevin Magee, to find out what is happening in the SA Real Estate Market in March 2011.

This blog post and video is brought to you by Raine & Horne Glenelg, your Glenelg Real Estate Agents and Glenelg Property Management Experts

Watch this Video to hear from Raine & Horne SA’s CEO Kevin Magee, to find out what is happening in the SA Real Estate Market in January 2011.

This blog post and video is brought to you by Raine & Horne Glenelg, your Glenelg Real Estate Agents and Glenelg Property Management Experts

Adelaide renters are paying $15 a week more compared with this time last year and can expect further rises.

Real Estate Institute of SA figures show the median weekly rent in Adelaide hit $310 in the December quarter, up 5.1 per cent on the $295 weekly median from the 2009 December quarter.

Industry experts attributed the increasing rents to a tight market and interest rate rises.

The rise in weekly rent came despite a 5.5 per cent increase during the past year in the number of properties available for lease.

REISA president Greg Nybo said the rises were to be expected in Adelaide’s rental market, where the vacancy rate had hovered at or below 1 per cent for much of the past year.

“What we are now starting to see is the reality of a very, very tight rental market,” Mr Nybo said.

“When you have so many people looking for a limited product, rents are going to go up accordingly.

“A lot of landlords have also adjusted their rents with increases in interest rates and ongoing price rises for utilities.”

Statewide, the median weekly rent increased 5.5 per cent during the past year to $290. Mr Nybo said the larger statewide increase could be reflective of the state’s expanding mining sector and a mostly strong year for farmers.

“If the job is there and people are moving to the country for employment in mining or agriculture, it’s going to make for limited stock, which again means higher rents,” he said.

Mr Nybo said that with interest rate rises forecast for this year and no sign of demand letting up, similar increases in rent could be expected in 2011.

 Property Investors: Are you getting the right rent for your property in this market?  Find out what rent you should be getting…

Simply enter your property details and we will email you a free appraisal as to what your Glenelg or Western Coastal investment property should be renting for.

 Click here for an appraisal form

This blog post is brought to you by Raine & Horne Glenelg, your Glenelg Real Estate Agents and Glenelg Property Management experts.

Source: Adelaide Now