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June 2014

Adding clauses to contracts and maintenance costs

Dear Landlord, Wow, how fast has this year flown by? It'll be end of financial year before we blink... and by now you've very possibly met with your tax planner to discuss your best options for maximising your returns. If you are thinking of buying another investment property (and now is an excellent time), then we have some great tips here for you! Looking to buy? Are you capitalising on the time between your purchase going unconditional and settlement date? Many investors do not take the time to add clauses to the sales contract that will

assist them in ensuring there are limited vacancy periods from the date of settlement. The addition of a clause to your sales contract allowing access and marketing of a property prior to settlement can mean we can market the property for up to 2 weeks prior to settlement and ensure that the property has a tenant ready to move in after settlement. Investors that have started to use this clause have found an increase in their revenue of up to or more than $1000.00. To discuss how this clause can assist you with your next investment, contact, Christopher McCall ,in our office.

property. Owners incur fees and for reletting and marketing to obtain a new tenancy. Generally when a tenancy vacates maintenance costs can be incurred with updating and or improvements made to ensure the investment is still obtaining a high rent. The next time you consider a lease extension or removal of a tenant consider these costs and speak to your property manager for advice and aim for peak periods and wherever possible, securing at least a 12 month lease.

Long term leases

Christina Penrose

Wishing you health, wealth and happiness

The industry norm in Queensland is to obtain a tenancy for a 6 month lease. This may be costing you money instead of ensuring you are capitalising on your investment. Many owners do not consider the cost involved in resigning a tenancy or obtaining a new tenancy due to a tenant vacating their investment

In this edition: How long will it take for your property to rent? Why Maintaining Your Rental Property Pays Top Ten Tips for Value-Adding Without Over-Captitalising! Are You Buying or Refinancing? 3 Things You Must Know to Have Your Loan Approved!

Harder to Nab a Bargain with Vendors Discounting Less A Selection of Properties Recently Leased Quote We love creating wow moments Calendar of Events


How long will it take for your property to rent? That of course depends on the time of the year so here are the latest statistics for May.

BRISBANE STATISTICS The Market

Brisbane, QLD

May 2014

Annual Change

Median Weekly Rent - House

$410

2.8% increase

Median Weekly Rent - Unit/ Apartment

$380

2.7% increase

Days on Market (Avg)

25.7

5.8 increase

Days Vacant (Avg)

15.2

6.7 increase

Source: rentfind.com.au

living environment, it is also in the Landlord‟s financial interests to ensure that the property is kept in good condition. After all, without rent coming in regularly each month, a property is worthless.

Why Maintaining Your Rental Property Pays Good Property Managers and Landlords know the importance of keeping their rental properties well maintained.

When viewing the upkeep of your rental property, keep your perspective not only from the business side, but also from the Tenants‟. Regular maintenance and management of your property will help prevent damage and decrease the likelihood of missed income in between Tenants.

to want to rent it. When your property is run down and uncared for it will attract the same type of treatment from a Tenant. Like attracts like. If you were putting a house up for sale, you‟d want it to be in the best possible condition to attract the highest price. Finding a good Tenant is no different.

Through Tenant’s eyes Not only are Tenants entitled by law to have a safe and habitable

Prospective Tenants viewing a neglected property are less likely

www.propertyrentalsbrisbane.com FREE Information Guide For Landlords & Tenants


ing aging fixtures and appliances.

Maintenance & ongoing management If a property does not receive ongoing general maintenance, and if repairs are not acted upon straight away, there are several consequences. Itâ€&#x;ll likely cost more and take longer when maintenance or repairs are eventually undertaken, and the value of a property in disrepair is significantly lowered, decreasing both its investment and rental income potential. Many Landlord insurance providers expect homeowners to maintain their property to the standards of the relevant Tenancies Act, and failure to do so could result in claims being denied. Another factor which can affect the quality of Tenant applying for a property is cosmetic maintenance. Touching up the paint job on interior walls when the property is between Tenants is a simple task, and is reasonably inexpensive if Landlords do it themselves. It may also enable you to add extra dollars to the rent that you charge the next Tenant. The same approach applies to replac-

Tenants are more likely to take pride in a well-presented property and treat it as if it were their own. Simple gestures such as a fresh coat of paint or gardening assistance can help to attract good calibre Tenants and ensure the property remains well cared for. Landlords also need to be aware that their property should be maintained regularly and that certain standards for repair are met. If your Tenants inform you of a problem in need of repair you need to act immediately, however, preventative maintenance should be applied beforehand. For example, if your rental property has a very large garden, make it easier for the Tenant to maintain it so that they are less likely to let it go and turn it into a jungle. In this instance, you might think about the long term substitute for grass and bushes with something that requires less maintenance for both you and your Tenants such as: pebbles, gravel, bark or pavers.

Inspections Routine inspections can uncover potential problems and spark maintenance action before they worsen. The Landlord may like to arrange routine maintenance on an annual basis such as: checking drains and gutters, checking for signs of mould or damp, having air conditioners serviced, mending any broken or leaking fixtures and generally inspecting and repairing any aspects of the property that could present problems. Examining fences and garden walls to ensure that they remain in sound condition, together with inspecting the roof and any chimneys for signs of damage, is vital. Covering missed income First time property owners need to be aware that standard building and contents insurance will not cover a Landlord for missed income if: The Tenant absconds; The property is in the process of being re-let; The policy limit is reached;

www.propertyrentalsbrisbane.com FREE Information Guide For Landlords & Tenants


The property is not Tenantable due to previous damage. Combining the appropriate policy cover with diligent property management and maintenance will help to protect the financially longevity of the property, and can increase the market value and rental asking price in the longer term. Landlord maintenance matters – not just for peace of mind, but for Tenants, insurers and your bottom line.

ing the budget," Smart Guide to Property Investment suggests. PAINT IT BUILD A CARPORT NEW CURTAINS OR BLINDS

It probably starts with buying a house or apartment with a value at or lower than the suburb's median price as that allows greater scope for capitalisation. Two of the tasks might require a phone call to the council just to check on the approval process for carports and skylights. And if you are in an apartment block - best check on the rules regarding dishwashers in the kitchen. (Source John McGrath's "Ultimate Guide to Real Estate" HarperCollins Publishers.)

Source: www.realestate.com.au/blog

INSTALL A SKYLIGHT REPLACE LIGHT FITTINGS PUT IN A BARBECUE STEAM CLEAN CARPETS

Are You Buying or

SAND THE FLOORS

Top Ten Tips for ValueAdding Without

REPLACE DOOR AND KNOBS

HANDLES

Over-Captitalising! INSTALL A DISHWASHER OK, so you haven't got around to the household renovation wishlist yet. And not wanting to spend too much, here are 10 hot tips on adding value to an investment property, giving the place a look but without the likelihood of overcapitalisation. "Your goal is to add the wow factor without blow-

The style and quality of the improvements, together with careful budgeting, will be important as to whether over-capitalisation becomes an issue. And it can certainly be minimised with reliable professional advice, careful planning, market-trend assessment, along with wise and sensitive execution of the improvements.

Refinancing? 3 Things You Must Know to Have Your Loan Approved! Despite banks being more willing to lend over the past 6 years, this doesnâ€&#x;t guarantee loan approval success. I know, as I encounter firsthand the multitudes of Australians who are getting rejected for home loans, even if they can afford the repayments! So what should you consider

www.propertyrentalsbrisbane.com FREE Information Guide For Landlords & Tenants


prior to bidding for that dream home? When looking for a property, everything can happen very quickly and it is easy to get swept up in the moment, even before your finance is approved. By taking your time and ensuring that the necessary checks are made, you position yourself with the best chance of getting approval for that loan. Tip 1 - Demonstrate savings It‟s not rocket science, I acknowledge, but banks like to see that you can save. By demonstrating your ability to save, lenders have greater confidence in your ability to pay off your mortgage. With current market conditions, it can be extremely difficult getting approval for a loan with any less than demonstrated savings of 5%. Ideally, banks prefer to see demonstrated savings of 10% 20% of the value of the loan. Some budding homebuyers may say, “But I have money in the bank now! Doesn‟t that count?” It depends. The banks recognise savings as finance that has been in your account and untouched

areas such as the size and security of your income, any existing debt, and the number and size of credit applications you have.

for a period of 3-6 months. Otherwise a parent / friend / colleague could just deposit the funds for a week prior to the bank inspection of your finances, with the view of withdrawing it shortly after loan approval! So, aim to have the funds in your account for at least 3 months prior to applying for a home loan. Better yet, aim for incremental increases in the balance of this account, which demonstrates that you are an efficient saver. (I also recommend having this decline over time). Having demonstrated saving implies that you have enough disposable income to withstand external shocks such as rate rises. I regularly encounter Australians who have come into financial trouble due to external shock or changes in their income that they didn‟t account for. Lenders will consider not only your savings track record, but that you can weather such „shocks‟ as well.

If your income isn‟t large enough to adequately repay the loan and leave you with enough disposable income to provide essentials for yourself or your family, then – somewhat obviously - you are unlikely to be able to service the loan. I know that some people believe they can live on bread and water and so reduce their expenses to meet the loan repayments – however, the banks won‟t view your earnestness to live so modestly as sufficient for loan approval! Furthermore, lenders prefer to see that your income is stable. Typically, lenders consider 'stable‟ as those borrowers who have been with their current employer for 2 years or more. If you‟re self-employed, lenders like to see that you have been in business for at least 2 years. Tip 3 - Sort out issues with your Credit Report Your credit file can play a decisive factor in getting approval. That said, most budding home

Tip 2 – Ask yourself, “Can I service the loan?” Lenders want to ensure that you can appropriately service the loan. They look at a variety of

www.propertyrentalsbrisbane.com FREE Information Guide For Landlords & Tenants


“With home values rising and sales volumes increasing, we would expect that the level of discounting would fall," he said.

buyers and real estate investors have little idea of how they score on their credit reports.

Harder to Nab a Bargain with Vendors Discounting Less

The simple maths is that if you have a low credit score, you are much less likely to secure a home loan.

New figures from RP Data show the level of vendor discounting has dropped nationwide.

Black marks on your credit file – often arising from a missed bill or credit card payment some time in the previous 5 years…yes, that long! - heavily impact your chances of loan approval. So, get to know what is on your credit report. There are plenty of free sources for this (including Credit Repair Australia). By knowing what is on your file before applying for a loan, you can assess whether you need to deal with any „black marks‟. Not all black marks can be removed – some people do have to wait the full 5 years for them to disappear – but there are many that can be. Either way, budding home buyers ought to see if their credit reports are „clean‟, and if not, ask whether they can remove the „black marks‟ either by themselves, or through an expert.

According to the latest weekly RP Data property reports, the national average for vendor discounting has hit the lowest point all year, at 4.91 per cent for houses and 4.36 per cent for units. This is a dramatic reduction since the beginning of the year when vendors were averaging discounts of 5.51 per cent for houses and 5.63 per cent for units. Cameron Kusher, RP Data research analyst, said he had expected this trend to occur.

“Sellers are certainly seeing higher levels of empowerment with more active buyers and a relatively small amount of stock available for sale. I believe we will see this trend continue as there are no signs yet of a significant lift in the volume of stock available for sale.” The number of homes being advertised for sale across Australia has reduced by 3.8 per cent since the same time last year. While stock on market has been reduced, the number of active buyers is 13 per cent higher, according to estimates from RP Data. Average discounts for units in Hobart dropped from 8.8 per cent in January to 5.2 per cent at the end of April, while home sellers in Adelaide were discounting just 4.9 per cent on average, compared to 6.4 per cent at the beginning of the year. Source: www.rebonline.com.au/

Source http://spionline.com.au/blog

www.propertyrentalsbrisbane.com FREE Information Guide For Landlords & Tenants


A Selection of Properties Recently Leased

The Gap House $630p.w.

Bardon Unit

$325 p.w.

3 bed, 2 bath, 2 car accommodation

1 bed, 1 bath, 1 car accommodation

Taringa Unit

$390 p.w.

2 bed, 2 bath, 1 car accommodation

Calendar of Events

Quote "What a man can be, he must be. This need we call self-actualization." —Abraham Maslow

We love creating wow moments Chris, this is just to say thank you for the professional service you provided in securing a tenant for our property. From the our first telephonic conversation you provided me with expert advice and assistance regarding the future rental of my property. What followed was what makes you stand out from the rest. You delivered on what you said was going to happen! You secured a tenant for us within 2 days of putting the property on the market. Throughout the process you kept me updated with any developments. What a pleasure it is to deal with you. You made my life so much easier. Thank you for creating a WOW moment. —Charl Grobbelaar RE/MAX Profile Real Estate www.profilerealestate.com.au www.propertyrentalsbrisbane.com

141 Boundary Road Bardon QLD 4065 PO Box 388, Paddington, 4064

TEL 07 3510 5221

9 June Queen’s Birthday – Public Holiday in all States 16 June Mid Month Accounting 1 July End of Month Accounting End of Financial Year Accounting

FAX 07 3876 5544 Chris profilemanager@remax.com.au Helen helenbryan@remax.com.au Julie profilerentalsteam@remax.com.au

Errors & Omissions: These details have been prepared by us on information we have obtained and while we trust it to be correct, is not guaranteed by us and you should rely on your own enquiries.

RE/MAX Profile Landlords' Newsletter June 2014  

RE/MAX Profile Landlords' Newsletter June 2014

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