Experienced-Investor-Guide

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GUIDE INVESTORPROPERTYEXPERIENCEDTHEGUIDE Proven insights into how to maximise your returns and drive greater results from your property investment

HELLO THE EXPERIENCED PROPERTY INVESTOR GUIDE2

GENERAL ADVICE WARNING The

As an experienced property investor, your focus is undoubtedly on driving the greatest returns from your investment in order to achieve your longer-term financial goals. This guide has been created in conjunction with our most experienced team of Property Managers to give you insights into how to maximise your returns and drive greater results from your property investment. We look at how to conduct a property investment performance review, tips on how to add value and increase your rental returns, how to retain good tenants, what to look for in a high performing Property Manager and more. We hope you find it useful. information in this brochure of a general nature. It does not take your specific needs or circumstances into consideration, so should look at your own financial position, objectives and requirements and seek financial advice before making any financial decisions.

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CONTENT THE EXPERIENCED PROPERTY INVESTOR GUIDE3 CHAPTER01 CHAPTER02 CHAPTER03 CHAPTERCHAPTER0407 CHAPTER05 CHAPTER06 FINALWORD Conducting A PropertyPerformanceInvestmentReview How To Add Value and Increase Rental Returns 4-5 How A PropertyPerformingHighManagerCanAddValue How To Keep Good Tenants And Get Them To Renew Their Lease Evaluating Your Current Property Manager And PerformanceTheir What Qualities Should You look For In A High PropertyPerformingManager 6-7 8-11 12-14 15-17 18-19 What Questions Should You Ask A Property Manager To Find The Right One 20-21 Why McGrathChoosePropertyManagement 22-23

CHAPTER 1 THE EXPERIENCED PROPERTY INVESTOR GUIDE4 | CONTENT CONDUCTING A REVIEWPERFORMANCEINVESTMENTPROPERTY

For more detailed information on how to review your portfolio click here.1

Are you charging market competitive rent? Look at similar properties online and talk to your Property Manager. Has the property’s value increased since your last review? Do you have any additional equity in the property that you could use for other investments. Are you on the most competitive home loan rate? Can you get a better deal? Are you on the right insurance policy, is the premium competitive, could you consolidate polices for better value?

Do you need to make proactive repairs to your property? You or your Property Manager should inspect your property regularly so you can identify and address any potential maintenance issues. Does your rental yield align to your investment goals? If not, what changes can you make to help you achieve your goals?

1 REVIEWPERFORMANCEINVESTMENTPROPERTYACONDUCTING THE EXPERIENCED PROPERTY INVESTOR GUIDE5 | CONTENT

Before you can look to drive greater returns from your investment you need to understand how your current portfolio is performing. In order to do this, set aside half a day or more each year to assess your property and its performance. This ritual can help identify opportunities to both save money and to make more money.

When reviewing your property’s performance consider the following:

1 www.mcgrath.com.au/advice/articles/9-ways-to-review-investor-performance

Do you have ongoing issues with the property? Would it be better to offload the property and invest Doelsewhere?youhave the best investment team supporting you? Are they providing the proactive service and advice you require? Are you maximising your taxable expenses? Organise to meet with your accountant to ensure your claiming all possible expenses.

CHAPTER 2 THE EXPERIENCED PROPERTY INVESTOR GUIDE6 | CONTENT HOW TO ADD VALUE RENTALINCREASEANDRETURNS

1 REVIEWPERFORMANCEINVESTMENTPROPERTYACONDUCTING THE EXPERIENCED PROPERTY INVESTOR GUIDE7 | CONTENT 2 RETURNSRENTALINCREASEANDVALUEADDTOHOW One of the key benefits of investing in property is for you to have the ability to make changes. If done correctly and without over capitalisation, this can help add rental appeal and longterm value to your asset. Here is a look at some changes that can impact your investment property’s rental appeal and its potential longterm value. Keep in mind if you are making bigger changes, talk to your local McGrath Sales Agent and find out what buyers are willing to pay more for in the area. Whilst you may not be looking to sell at the moment, planning ahead and having a property that will appeal to buyers down the track without over capitalising, makes good investment sense. 12 CHANGES THAT CAN IMPACT YOUR INVESTMENT PROPERTY’S RENTAL APPEAL AND ITS VALUE 1. Paint the walls. 2. Tidy up the garden. 3. Fix the flooring. 4. Update the kitchen. 5. Refresh the bathroom. 6. Add some extra features such as blinds or shutters. 7. Add built-ins and storage. 8. Add a parking space. 9. Create or enhance the outdoor living space. 10. Add security to the property. 11. Keep it well maintained. 12. Work with the body corporate to suggest building improvements. Before you start planning to make any changes, it’s a good idea to talk to your local Property Manager to understand your target market and what appeals to them. Having this insight can help guide you on what improvements could have the biggest impact on the quality of tenants you attract, the rent you can charge and the long-term value of your investment property. Find your local McGrath Property Manager Forhere.1more detailed information on how to add value to your investment click here.2123www.mcgrath.com.au/advice/articles/12-ways-to-add-value-to-your-investment-propertywww.mcgrath.com.au/find/a-property-managerwww.mcgrath.com.au/agent

CHAPTER 3 THE EXPERIENCED PROPERTY INVESTOR GUIDE8 | CONTENT HOW A ADDMANAGERPROPERTYPERFORMINGHIGHCANVALUE

To find out more about adding value to your investment, download our property investor guide1 including a chapter on 12 ways to add value to your SKILLEDinvestment2.ATREACHING

Property Managers today are highly skilled professionals that play an integral role in the success of a property investment. A high performing Property Manager will help their clients across a number of key areas includingSETTING THE RIGHT RENT Property Managers are skilled at assessing individual properties, its features, location and reviewing comparable rental properties to determine a market competitive rent. They are also aware of what local renters want and importantly what they are prepared to pay more for. Having these insights is invaluable for an investor.

Nothing will zap your profits faster than vacancies, so having someone managing tenant concerns and addressing maintenance issues on your behalf in a timely manner, can help ensure tenants are happy and vacancies are limited.

1 REVIEWPERFORMANCEINVESTMENTPROPERTYACONDUCTING THE EXPERIENCED PROPERTY INVESTOR GUIDE9 | CONTENT 3 VALUEADDCANMANAGERPROPERTYPERFORMINGHIGHAHOW

TENANTS TO FIND THE RIGHT ONE Property Managers are skilled at screening tenants, those who will stay for the long term and cause few, if any RETAININGproblems.GOOD TENANTS BY ADDRESSING ISSUES

21 investmenthow-to-maximise-your-property-www.mcgrath.com.au/advice/guides/propertyways-to-add-value-to-your-investment-www.mcgrath.com.au/advice/articles/12-

THE GREATEST NUMBER OF POTENTIAL TENANTS

Property Managers know the local market and they know how best to position and advertise a property to drive maximum interest. The more people who want to rent your property the better as it gives you greater opportunity to find the ideal tenant. Plus, they undoubtedly have a database of potential renters looking for a place just like yours to call home, so you may be able to rent your property SKILLEDfaster.ATSCREENING

1 REVIEWPERFORMANCEINVESTMENTPROPERTYACONDUCTING THE EXPERIENCED PROPERTY INVESTOR GUIDE10 | CONTENT 3 VALUEADDCANMANAGERPROPERTYPERFORMINGHIGHAHOW Property Managers have a team of maintenance specialists who can be mobilised quickly and economically into action, to fix any maintenance issues.HELPENSURE YOU HAVE ACCURATE FINANCIAL RECORDS FOR YOUR ACCOUNTANT To ensure you are maximising the tax effectiveness of your property, you need to ensure your financial records are in order. A Property Manager can be a huge help here and can provide you with a fully itemised statement each month, along with a comprehensive rental statement at the conclusion of each financial year for you to give to your accountant. CONDUCT REGULAR INSPECTIONS TO ENSURE YOUR PROPERTY IS BEING LOOKED AFTER A high performing Property Manager will conduct regular inspections of your property to ensure the investment is being cared for and nothing untoward is happening on the premises. These inspections also ensure landlords are able to actively monitor and address any maintenance or health and safety issues.MANAGING THE RENT, INCLUDING SETTING, ADJUSTING AND PropertyCOLLECTINGManagers with their tried and tested systems are highly efficient at working to ensure rent is collected on time.

YOU UNDERSTAND WHAT IS NORMALLY TAX

InDEDUCTIBLEmostcases property management fees are tax deductible. So, in reality landlords are able to access all of the benefits offered by Property Managers and then offset their costs against their tax. Of course, talk to your accountant about your property and specific tax situation.

To find your local McGrath Property Manager1 and understand how they can help you add value to your investment and keep you on track to achieve your investmentmanagerwww.mcgrath.com.au/find/a-property-goals.

1 REVIEWPERFORMANCEINVESTMENTPROPERTYACONDUCTING THE EXPERIENCED PROPERTY INVESTOR GUIDE11 | CONTENT 3 VALUEADDCANMANAGERPROPERTYPERFORMINGHIGHAHOW

They also have strong rental arrears procedures that they are skilled at implementing should a tenant fall behind. Having an independent Property Manager look after this can help save landlords a lot of stress and a lot of KNOWINGtime.SPECIFIC LandlordsLANDLORD-TENANTLOCALLAWShavealegalobligation to comply with the regulations set out in their relevant Landlord-Tenant Law. This documents interactions, rights and obligations of both landlords and tenants. In addition, landlords are obliged to comply with local state and regional legislations and not doing so can have serious implications for the property owner. Property Managers stay up to date with the changes and can help keep their landlords informed.

HELPING1

CHAPTER 4 THE EXPERIENCED PROPERTY INVESTOR GUIDE12 | CONTENT HOW TO KEEP GOOD TENANTS AND GET THEM TO THEIRRENEWLEASE

By retaining good tenants, you do not need to spend money on advertising for new ones, nor worry about how a vacancy may impact your investment loan obligations. But what can you do to keep your tenants happy? COMMUNICATION

Setting realistic expectations and time frames to address issues as they arise during a tenancy is critical. If tenants understand how quickly maintenance issues will be addressed, when to expect an email response from the Property Manager, how often the property will be inspected, it paves the way for a smoother relationship. ANY ISSUES AS PER THE AGREED TIMELINES

1 REVIEWPERFORMANCEINVESTMENTPROPERTYACONDUCTING THE EXPERIENCED PROPERTY INVESTOR GUIDE13 | CONTENT 4 LEASETHEIRRENEWTOTHEMGETANDTENANTSGOODKEEPTOHOW

ADDRESS

AND SET CLEAR EXPECTATIONS

If issues arise during the tenancy ensuring you or Property Manager, act within the agreed timeframe helps instil trust between you and your CONDUCTtenant.REGULAR INSPECTIONS

Stable tenants who look after your property and pay their rent on time are incredibly valuable to an investor and undoubtedly a key priority for you.

By conducting regular inspections (approximately 2-4 per year) it not only enables you to keep an eye on the property so you can proactively address any issues, it also provides opportunities for the tenants to communicate openly with you or your Property Manager – helping to create a stronger working relationship.

OPEN LINES OF

1 REVIEWPERFORMANCEINVESTMENTPROPERTYACONDUCTING THE EXPERIENCED PROPERTY INVESTOR GUIDE14 | CONTENT 4 LEASETHEIRRENEWTOTHEMGETANDTENANTSGOODKEEPTOHOW 1happy.withMaintainingpermittedbodysignensurefurrymoretoverythisInoticehowStateunderstandsmallrent,IfONLYwww.mcgrath.com.au/find/a-property-managerMAKESMALLINCREASESyouarelookingtoincreasetheit’sadvisabletoonlymakeincreasesandtoensureyouthelegislationinyourorTerritorywithrespecttooftenthiscanbedoneandtheperiodsrequired.CONSIDERALLOWINGPETSfyourpropertyallowspets,offeringasanoptionfortenantscanbepopular.Tenantsareoftenkeensignlongerleasesandpayslightlyrentiftheyareabletohavetheirfriendswiththem.Ofcourse,bothyouandyourtenantsapetpolicyandcheckwithyourcorporatetoensurepetsarebeforeofferingthis.BEFLEXIBLEadegreeofflexibilitygoodtenantscanhelpkeepthem

ASK THEM TO RENEW THEIR LEASE

From time to time, requests are made by tenants such as small alterations to the property that will not impact the value of the property or may increase the value of the property. Being prepared to be flexible when these requests occur can help with tenant retention.

If you are happy with your tenants, let them know and before the lease ends ask them if they would like to extend their lease. To make it more appealing, perhaps offer an incentive for them to re-signOFFER THEM AN INCENTIVE TO RENEW THEIR LEASE

If you have great tenants, consider offering them an incentive to stay. Popular incentives include offering a gardener, including appliances such as a dishwasher etc. Talk to your Property Manager about what might work here for your tenants.1

CHAPTER 5 THE EXPERIENCED PROPERTY INVESTOR GUIDE15 | CONTENT PERFORMANCEANDMANAGERPROPERTYYOUREVALUATINGCURRENTTHEIR

important. But how can you

Given the significant role your Property Manager plays, ensuring you partner with a high performing one is assess current Property Manager to are the best fit for current Property Manager is not performing as

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you and your investment? Here are some points to consider when evaluating your current Property ManagerIs your

Ensuring your property is well maintained and compliant with health and safety regulations is critically important both from a legal perspective and can also help save you money in the long run.

Do you often receive late rent payments? Cash flow is important as it impacts your loan repayment. Consistent late rent payments may indicate that your Property Manager is not enforcing the rental arrears procedures.

Is your property sitting vacant for months on end, with no prospects of finding a tenant? A seasoned Property Manager will understand what the local days on market are, whether the asking rent is in line with the market and ways to refresh the way the property looks both digitally and in person.

Is your Property Manager addressing any maintenance issues as per your instructions? Do they make proactive maintenance suggestions?

1 REVIEWPERFORMANCEINVESTMENTPROPERTYACONDUCTING THE EXPERIENCED PROPERTY INVESTOR GUIDE16 | CONTENT 5 PERFORMANCETHEIRANDMANAGERPROPERTYCURRENTYOUREVALUATING

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CHAPTER 6 THE EXPERIENCED PROPERTY INVESTOR GUIDE18 | CONTENT WHAT MANAGERPROPERTYHIGHLOOKSHOULDQUALITIESYOUFORINAPERFORMING

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Finding the right Property Manager is important for your investment’s success but what qualities should you look Outlinedfor? are the key qualities that we believe define a high performing Property Manager. Have excellent communication skills. Are highly efficient and organised. Are trained and educated with a focus on continual education. Have in-depth knowledge about the local rental market. Are experienced or part of a highly experienced property management team. Have an investor mindset with a focus on helping their landlords maximise their investment success. Have strong references from both landlords and renters. Have a strong ability to negotiate and be stern when required. They offer a wide range of services and can take care of your management needs on your behalf. Work within a reputable agency with high website traffic, proficiency with rent lists and other marketing strategies to help enable them to market your property effectively. Are committed to ongoing professional development to ensure they stay up to date with relevant tenancy laws and keep you informed when changes impact you.

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CHAPTER 7 THE EXPERIENCED PROPERTY INVESTOR GUIDE20 | CONTENT WHAT SHOULDQUESTIONSYOUASK A PROPERTY MANAGER TO FIND THE RIGHT ONE?

1 REVIEWPERFORMANCEINVESTMENTPROPERTYACONDUCTING THE EXPERIENCED PROPERTY INVESTOR GUIDE21 | CONTENT 7 ONERIGHTTHEFINDTOMANAGERPROPERTYAASKYOUSHOULDQUESTIONSWHAT Now you know the qualities to look for, here are a series of questions to ask your shortlisted Property Managers to help you find the right one to join your investment team. Who will be my primary point of contact and how long have they been with the company / industry? Other than your letting fee and management fee, what other fees should I be aware of? What is your policy on rental Howarrears?many similar properties do you manage in the area? Are all your tradespeople Whatlicenced?training does your company hold? How often do you inspect property’s and what reports do you send your clients? What online tools do you use, can I get real time reporting? How do you screen tenants? What’s your average days on What’smarket?your vacancy rate? What’s your list price to lease price Whatratio?isyour team structure? Can you provide me with recent references from past landlords and tenants? Can you show me your customer experience system and ratings? Can you share any Google reviews or testimonials from both landlords and tenants?

CHAPTER 9 THE EXPERIENCED PROPERTY INVESTOR GUIDE22 | FINALCONTENTWORD WHY CHOOSE M c MANAGEMENTPROPERTYGRATH

1 REVIEWPERFORMANCEINVESTMENTPROPERTYACONDUCTING THE EXPERIENCED PROPERTY INVESTOR GUIDE23 | CONTENT MANAGEMENTPROPERTYMCGRATHCHOOSEWHY At McGrath, managing your property effectively isn’t our only job. We see our role as delivering a premium service and working with you to maximise your investment potential. Our team of highly skilled Property Managers combined with our unique Leasing System and six-star service guarantee, ensures we deliver exceptional results, outstanding customer experience and lifelong relationships with our clients. With McGrath managing your property, you can relax in the knowledge that you have chosen the team of Property Managers that deliver above all others. The best service, the best Property Managers, the best result. Interested to find out more? McGrathconnectwww.mcgrath.com.au/manageVisit1orwithyourlocal,experiencedPropertyManager2today. 1 www.mcgrath.com.au/manage 2trained,All400+Properties33,000+www.mcgrath.com.au/find/a-property-managerundermanagementourpropertymanagersarefullycertified,orlicenced. Offices108Years30+ofexperienceandgrowing

DISCLAIMER THE EXPERIENCED PROPERTY INVESTOR GUIDE24 All information has been obtained from sources believed to be reliable. McGrath Limited and its subsidiaries, together with their directors, officers, employees, and agents have used their best endeavours to ensure the information passed on in this document is accurate, however they have not checked this information and have no belief either way as to the accuracy of the information contained in this document. Any recommendations, views, guidance, and forward-looking statements are opinions only, not guarantees of future performance or advice, and should not be relied upon. You should make your own enquiries in relation to the information contained in this document. Before making any real estate decisions contact your financial advisor, broker, and accountant. This document is to be used as a guide only. © McGrath Estate Agents 2022 All rights reserved. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the publisher, except in the case of brief quotations embodied in critical reviews and certain other non-commercial uses permitted by copyright law. For permission requests, write to the publisher, addressed “Attention: Marketing Department” at the address below. McGrath Estate Agents 55 Pyrmont Road Pyrmont NSW 2009

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