Posts Tagged ‘Landlords’

First impressions are critical when a prospective tenant inspects your property.

First, decide what sort of tenant you are targeting.

There are tenants who want to save money and are happy to live in a property that is not in first class condition. There are others, such as professional people, who are happy to pay top rent, but expect the property to present at its absolute best.

There is no doubt that well presented properties achieve top rents and usually attract the best quality tenants. That adds up to a higher investment return, together with fewer and shorter vacancy periods.

Here are some valuable property presentation tips

1. Tend the gardens, mow the lawns and clean the windows, paths, gutters and outside paintwork. These are all things seen from the street, and you don’t want prospective tenants to dismiss the property before getting to the front door.
2. Repair or replace leaking taps, sticking doors, broken light fittings, loose door handles, rotten floor boards, leaky gutters and torn flyscreens.
3. If you are thinking about painting, only paint those areas that really need it unless you plan on doing the lot. New paint may only make those areas left unpainted look even shabbier. Use light, neutral colours as strong colours may not be to the tenant’s taste. If paint is generally in good condition, touch up the scruffy bits.
4. If your property is in a noisy area (such as a main road) inspection times should occur when the noise is at its lowest.
5. Get rid of odours that you may not notice but prospective tenants will, such as cigarette or pet smells. It may be worth having the carpets and curtains cleaned, neither of which is very expensive.
6. Open the curtains and blinds to let the sun and the view inside. Nobody likes a dark house, and the view will make the rooms feel bigger.
7. Have the property clean, tidy and uncluttered at inspection times.
8. If your property has a pool, ensure the pool and the surrounds are sparkling clean. You want the prospective tenants to think it is an asset, not a burden. If the filter or the pool needs professional repairs, it is better to do it now rather than putting it off. The repairs are usually tax deductible.
9. Ensure that all electrical wiring and power points are safe. This includes any electrical appliances to be included with the property.
10. Take out comprehensive insurance cover on the property (including public liability). You don’t want to be sued by a prospective tenant who accidentally injures themselves while inspecting the property.

This Newsletter Article was brought to you by Raine & Horne Glenelg - your Glenelg Real Estate Agent and Property Manager.

Are you a tired burned out Landlord – looking for some options… read more

Raine & Horne SA is helping property investors have a greater understanding of their buying power thanks to an advertising system new to Australia. 

The ‘Select Invest +’ advertisements list an indicative weekly ownership actual for the property by taking into account a range of factors including mortgage repayments, tax deductions and rental returns. 

The program and its associated cost calculations has been designed and reviewed in conjunction with Fair Trading, Trade Practices, Finance and Land Agents Acts to ensure compliance, clarity and legitimate benefits for both buyers and sellers. 

Raine & Horne Financial Services spokesperson John Martin said the new advertising method will provide new and existing investors with a realistic view of how the purchase would affect their hip pocket. 

“Property investment is still high on the priority list for South Australians, with property prices still affordable and good rental returns,” Martin said. 

“The most common question that I am asked is how much will an investment property really cost per week or per month.” 

“Once investors, particularly first timers, see just how much an investment property could cost – it either encourages them to do so or stops them from making a big financial decision that may not be viable.” 

The program is anticipated to effect how real estate property is advertised nationwide and is yet another exciting Australian first in less than 12 months from Raine & Horne’s South Australian Team. 

Raine & Horne SA CEO Kevin Magee said in the current climate it made sense to give investors a greater understanding of the financial aspect of buying rental properties. 

 “For me the most exciting aspect of this program is that with all indicative ownership costs being based on a couple having a combined yearly income of $100,000, it goes a long way to demystifying property investment and make it much more understandable and consequently accessible to everyone, not just those on high incomes.”

This story was brought to you by Raine & Horne Glenelg – Your Glenelg Real Estate Agents and Glenelg Property Management Experts – We’ll look after You.

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 Angus Raine, CEO of Raine & Horne, says almost 50% of landlords will miss out on potentially thousands of dollars by failing to claim depreciation on their investment properties before June 30.

He notes, “Many property investors either don’t maintain an accurate depreciation schedule or have a schedule that is out-of-date.” A depreciation schedule shows depreciable assets such as carpets, blinds, curtains, air-conditioning, fire alarms systems, light fittings and hot water units.

Angus explains, “Landlords can claim up to 12% on depreciable assets and also in many cases 2.5% of the building cost (not the value) of residential properties built on or after 18 July 1985. Depreciation can also be claimed on the cost of improvements made after 26 February 1992 to older properties.”

It’s worth remembering that the cost of a depreciation schedule is also tax deductible. Landlords can expect to pay between $650 and $700 for a depreciation schedule. But get a schedule before June 30 and it can be used to minimise your tax this financial year.

Peter Bembrick, a tax partner with accounting firm HLB Mann Judd Sydney says many landlords are also failing to maximise their full depreciation entitlements. “Often investors depreciate expenses such as carpets, light fittings and blinds, but fail to depreciate property owned by the body corporate that they have a part share in.”

Pre-June 30 tax tips for landlords

1.       Claim all deductions and depreciation prior to June 30.

2.       If you don’t have a depreciation schedule, consider getting one – they are tax deductible and can trim thousands of dollars from your 2008/09 tax bill.

3.       Prepay up to 12 months interest in advance on an investment property mortgage and claim a tax deduction for 2008/09.

4.       Where possible, time a property sale for after June 30 to avoid triggering a capital gains tax liability this financial year as personal tax rates will fall from 1 July 2009.

This story was brought to you by Raine & Horne Glenelg – Your Glenelg Real Estate Agents and Glenelg Property Management Experts – We’ll look after You.

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A buyers market is a term we seem to be hearing more and more in the media lately. The simple explanation of a buyers market is, at that time in the real estate cycle, there are more properties available for sale than there are buyers. The formula is simple; if buyers are in short supply, they theoretically have more power to negotiate.

The reasons for a buyers market are many. At the moment, financial uncertainty is the predominant influence on buyer sentiment. Historically other factors such as high unemployment, high interest rates, political unrest, recession or even war have also come into play.

The key point is that like all asset markets, consumers are heavily influenced by perception as much as their own reality. For example, there are certainly many people who believe we are in for tough times right now, but there are a number of astute investors who recognise that have the perception that this recession will turn very sharply and are exploiting the opportunities that are abound.

Last weekend I had an Open House on a property with over 30 groups coming through the property. Over 2/3 of those buyers were investors looking for development opportunities, which only proves that there are buyers in all so-called markets.

The positive side of sentiment driven markets is that they can also turn around very quickly. Good news is always well received.

So How Does a Buyers Market Affect You?

Well the first and often overlooked key point about any residential property market is that many vendors are also buyers, which means they are buying and selling in the same market. In other words, you may need to negotiate a little to sell your home, but as a buyer you will be in a position to negotiate which means the net differential may actually be no different than if you were selling in a sellers market.

Put simply, in a buyers market you sell lower, but you buy lower. In a sellers market you sell higher and buy high.

Should I Sell Before I Buy?

In my experience regardless of what market you are in YOU SHOULD ALWAYS SELL BEFORE YOU BUY. But more importantly in a BUYERS MARKET never ever buy before you sell.

Heres why…

Just suppose you are in the market to changeover and upgrade to another home. You will probably attend a lot of open inspections, and finally find your dream home.

In negotiating the price with the Agent you will soon discover that you are at a disadvantage in negotiating the purchase price. That is because you will want to buy your new home “subject to the sale of your existing home”

This means that the seller will want you to offer an “above the market” price to tie up the home; otherwise he will want a lower price for cash. Not many people have sufficient cash to buy a second home so they are stuck in making a higher offer, subject to the sale of their existing home.

The rub is – if you tie up your new home “subject to the sale” of your existing home,  you will then have a time pressure to sell your home by the date you set to satisfy the purchase date of your new home.

In a buyers market, the days on market can blow out to 60-90 days, so as your “subject to sale” contract purchase date looms closer to the drop-dead-date, many people in this situation  just give in and take lower offers so as not to lose the contract on their new home. In the process they lose tens of thousands of dollars on the whole transaction. Unfortunately this is what happens time and time again, when people try to sell “subject to” in a buyers market.

Always remember, should you sell before you buy, then you are in the position of “power to negotiate hard” when buying your new house, because you have cash and you have no time pressures on you to buy.

This story was brought to you by Raine & Horne Glenelg – Your Glenelg Real Estate Agents and Glenelg Property Management Experts – We’ll look after You.

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Low interest rates, rising property prices and the strength of the housing market in recent years have made residential rental property ownership a popular form of investment.

 A well managed rental property can provide landlords with a healthy return on their investment.

However, the risk of choosing a tenant who is unable – or – refuses to fulfil their obligations under their tenancy agreement can in fact prove extremely costly for landlords who have not secured adequate protection.

While many landlords may be confident that they have model tenants living in their property, even the most careful tenant can damage a property – whether accidental or otherwise.  In addition, while a tenant may have every intention of upholding the terms of their agreement, unexpected hardships such as the loss of employment, family break-ups and other unforseen events can affect their ability to keep up with their rental payments.

The most alarming trend currently is the increase in tenant arson and legal liability claims against the landlord.  We are advised by insurance companies that liability claims have increased by over 300% in the last 2 years.

This should be of particular concern to landlords, whose ability to prevent these situations is reduced as they are unlikely to be present should their tenant or their tenant’s guest injure themselves on their property.  Slip and fall claims are particularly prevalent.

Enlisting the services of an experienced property management firm to lease and manage the investment property is the first step that landlords should take. Maintaining the property in good, safe condition is also essential.

If you back that up with an insurance policy specifically designed to cover the unique risks associated with a rental property then some peace of mind may be gained.

Your Property Manager can give you professional advice on property insurance matters and through our buying power, can arrange comprehensive cover at very attractive premiums.

This Article is brought to you by Raine & Horne Glenelg – Your Glenelg Real Estate Agents and Property Management Experts – We’ll look after You.

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Buying and owning investment property can be complicated. We’ve all heard stories about investors who pay too much for a property, or who end up with the tenant from hell living in their property. But by avoiding a few simple mistakes investing in property can be a pleasure not a pain. So here are the seven mistakes every landlord should try to avoid.

1. Not having insurance

For property investors a full comprehensive insurance policy is a must and should cover burglary, fire, glass damage, storm and tempest damage. A public liability policy should also be included as part of your insurance package. It is also very worthwhile considering a specialised landlord protection insurance policy which covers you for malicious damage to your property of for loss of rent if your tenant leaves the premises without giving proper notification. When it comes to insurance it’s worth remembering that policy premiums are tax deductible for property investors.

2. Not having an interest only loan

Only the interest component of any loan repayments you make for an investment property are tax deductible, therefore if you have an interest only loan the total amount of any loan repayments you make are deductible. This has many financial and cash flow benefits for investors because it requires less of your income to hold the property.

3. Buying at the wrong time

Timing is one of the most important elements in a successful property investment. Property moves in cycles from boom times into times of stagnant or even falling values. Ideally investors should try to buy when the property cycle is down as this will help to increase purchasing power and maximise benefits from future capital growth.

4. Not claiming interest

If you borrow money from any source to buy an investment property, make sure you claim the interest on your tax return.

5. Buying with emotion

As much as you might like to buy a luxury penthouse in a resort style location, when it comes to investing in property we have to forget about our desires and think about the financial consequences of our decision. After all it’s the rental value that determines the economic worth of a property, so instead of asking “would I live in this property”, ask “who will live in it”. If the area where the property is located has a good history of strong rental demand and its rent is set at a level that the majority of people who live in the area can afford and it’s close to facilities that the local population demand, then you’re on the right track to making a sound choice of investment property.

6. Not inspecting your property regularly

Whether or not you have a real estate agent managing your property it’s a good idea to inspect your property at regular intervals. This way you’ll be able to see the condition of the property and be in a better position to determine whether or not you need to carry out any repairs or general maintenance. It also gives you an opportunity to see how the tenants are caring for the property.

7. Not having a professional property manager

With changes to legislation and technology the business of managing rental property is becoming more and more complicated. A thorough knowledge of property law, investment analysis and other related skills are required to maximise returns and successfully manage investment property. A professional property manager also knows there is a careful balance to ensure a property remains attractive to the market whilst maximising investment returns.

If you can possibly avoid these mistakes you’ll be well on your way to ensuring your investment property performs well to provide you with medium and long term capital growth with a minimum of headaches.

This Article is brought to you by Raine & Horne Glenelg – Your Glenelg Real Estate Agents and Property Management Experts – We’ll look after You.

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