Gary J Smith - We're Home - Newsletter - September 2020

Property Management Newsletter

RLA 150557

September 2020

Simple Updates That Could Increase The Appeal Of Your Investment Property.

A cost-effective overhaul can increase rental value, slash long-term maintenance costs, and just as importantly attract higher quality tenants happy to stay put for longer. If you present a quality environment, tenants are more likely to want to live there.

Here are some tips on giving your investment property a brand new lease on life.

Clean, cull and update Ensure tenants feel safe by checking wiring, security doors and sensor lights are updated and in working order. Sugar soap walls, update screens and invest in window and carpet cleaning. If you can’t get stains out, a good carpet refresh is a gem.

First impressions Attract the perfect tenant at first sight with a beautifully presented home with great street appeal.

Clean, low-maintenance gardens create a sense of value, so ensure pavers are flat and entrances are clean. Add polish with an updated letterbox, well-maintained fence and eye-catching front door.

If overhauling an apartment, the same effect can be created through considered use of colour and accessories. Use colour on the doors and entryway walls, and add useful hanging hooks and classic statement lighting.

Lick of paint For a clean, contemporary feel and inexpensive update, nothing beats fresh paint. When selecting wall colour, work with your home’s architectural style and flooring colour, and look for timeless neutral colours that won’t date. Don’t stop at walls and doors either.

For a makeover that is equal parts stylish, functional and cost-effective, refresh rather than replace. Ensure surfaces are squeaky-clean using sugar soap then simply apply a couple of coats of paint.

Clean crisp white is always a safe choice for investment properties, but don’t be afraid to consider a pop of colour as a contemporary point of difference. This year soft, earthy greens and blue-greens are popular and look especially effective as accent colours within a neutral colour scheme.

Fresh fittings Swapping out old fittings for new is quick, cost-effective and impactful. Updating window treatments can have a big impact on the overall feel of the home. Updated lighting and new tapware in the kitchen and bathrooms are simple and effective too.

Add texture While colour is a no-brainer, texture is often the forgotten ingredient when updating a property. It not only provides depth and interest to plain walls and floors but can help create ambience, no matter what state the interior is in. Visual textures like polished timber flooring, gloss tiles, metal and glass have a reflective quality and bounce light which contributes to a light, bright and contemporary feel.

Should You Buy A Property During A Recession How Australians Have Changed Their Lifestyles to Save Money Amid the Pandemic Hundreds of thousands of Australians have changed the make-up of their households in a bid to save money amid the coronavirus pandemic.

Buying a property during a recession has the potential to be both a positive and a negative move. We reveal the potential pros and cons of purchasing a home during the current coronavirus-induced recession.

1. Recessions usually mean low interest rates The RBA can use interest rates to stimulate the economy or to stifle it. During periods of low economic growth – such as during a recession – the RBA usually chooses to keep interest rates down to encourage borrowing and boost economic activity.

At the moment, with the official cash rate at just 0.25%, interest rates are the lowest they ever have been. And the RBA has indicated that it intends to keep them low for the foreseeable future.

2. Property is often cheaper during a recession Recessions often bring about a fall in property prices. During Australia’s last big recession in 1990/91, property prices fell across the country. In the worst-affected capital city, Melbourne, they were down more than -6%. This time around, some analysts foreshadowed that property prices could fall by as much as -30% if we experienced a severe recession. However, as Australia looks likely to avoid the worst impacts of the virus a figure of -10% or below is now more widely forecast.

3. The gap between property prices can also reduce Falling prices don’t just benefit first home buyers, they can also help people looking to step up the property ladder. If all property prices fall by the same percentage, then the more valuable the property is the more it should fall. For example, if a home worth $1 million falls by 10% it loses $100,000 and is now worth $900,000. If a home worth $500,000 falls by 10% it loses just $50,000 and is now worth $450,000.

4. The risk of not being able to pay your mortgage increases Although there are many benefits to buying a property during a recession, you need to weigh these against the downsides. And, for many people, one of the biggest risks can be losing the ability to pay your mortgage. After all, during a recession, businesses often struggle. That means more people tend to lose their jobs while others suffer a cut in salary. If this happens to you, you may face financial hardship.

5. Prices could fall further Timing the property market isn’t easy. Even the most astute observers can’t forecast the top or bottom of a property cycle with certainty. If you buy in a recession, there is always the risk that prices could fall even further. That said, Australian property prices usually tend to rise in the long run, especially in capital cities.

6. Different property markets react differently Finally, it’s always worth remembering that, despite the data, Australia’s property market isn’t really one market at all. Prices don’t move in unison between states, cities or even suburbs. Different types of property – i.e. apartments vs houses – also rise and fall at different speeds. That means some properties are likely to weather a recession better than others. In fact, some suburbs and property types may even rise in value while others fall. For this reason, it pays to stay on top of the property trends and to understand where demand remains strong.

About 5% of Australians have moved in with friends or family since the pandemic hit, or welcomed a family member or friend into their own home, a new survey from Finder shows.

Australia is experiencing not only a pandemic but a recession, so it’s no surprise that Aussies are looking to boost their finances. Some Australians are looking past the pet peeves that may have deterred them from co-living and are moving back home or in with friends.

Younger Australians led the charge, with 13% of those in Gen Z and 7% of Gen Y moving, compared to just 1% of those in Gen X. The survey of 1000 people, conducted in early August, also found respondents in NSW and Victoria were slightly more likely to move than their Queensland counterparts.

Households have been consolidating since the early days of the pandemic.

By April, about one in six Australians had already changed their living arrangements, with some moving home to their parents, taking on additional housemates, delaying plans to move and even selling up in a small number of cases.

A Finder survey in May found one in five adult children living in the family home had returned back due to the COVID-19 crisis.

The changes to households and pull-back in demand for rental properties – particularly in inner-city Melbourne and Sydney, which saw an exodus of foreign students – led to a spike in vacancy rates, which has since eased.

Other steps Australians took to make or save money included investing in property (2%), investing in shares (9%) and taking up a side hustle (9%). One in 10 people sold some belongings to make extra cash, while more than half cut back their spending.

Overall 63% of people made a change, but again it was the younger generations most likely to alter their lifestyle with 77% of Gen Z looking at ways to save or make more money, compared to 49% of Baby Boomers.

Article sourced realestate.com.au

Gary J Smith Real Estate Property Management 403 Marion Road, Plympton SA | (08) 8297 9323

Note: The articles contained within this newsletter are intended as information and opinions only and readers should not rely solely on its content. Whilst every endeavor is made to ensure the content is current and accurate, readers should always seek their own independent professional advice before making decisions. If your property is listed or managed by another agent, please disregard this communication. | RLA 150557