re/max profile landlords' newsletter june 2014

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 Ap-proved!

June 2014

Harder to Nab a Bargain with Vendors Discounting Less

A Selection of Properties Recently Leased

Quote

We love creating wow moments

Calendar of Events

Dear Landlord,

Wow, how fast has this year flown

by? It'll be end of financial year be-

fore 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 in-

vestment 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 be-

tween your purchase going uncondi-

tional 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 allow-

ing access and marketing of a prop-

erty prior to settlement can mean

we can market the property for up to

2 weeks prior to settlement and en-

sure 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.

Long term leases

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

property. Owners incur fees and for

reletting and marketing to obtain a

new tenancy. Generally when a ten-

ancy vaca tes ma in tenance

costs can be incurred with updating

and or improvements made to en-

sure the investment is still obtaining

a high rent. The next time you con-

sider 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.

Wishing you health, wealth and hap-

piness

Christina Penrose

Adding clauses to contracts and maintenance costs

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

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

Source: rentfind.com.au

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

Why Maintaining Your

Rental Property Pays

Good Property Managers and

Landlords know the importance

of keeping their rental properties

well maintained.

Not only are Tenants entitled by

law to have a safe and habitable

living environment, it is also in

the Landlord‟s financial interests

to ensure that the property is kept

in good condition. After all, with-

out rent coming in regularly each

month, a property is worthless.

When viewing the upkeep of your

rental property, keep your per-

spective not only from the busi-

ness side, but also from the Ten-

ants‟. Regular maintenance and

management of your property will

help prevent damage and de-

crease the likelihood of missed

income in between Tenants.

Through Tenant’s eyes

Prospective Tenants viewing a

neglected property are less likely

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.


Maintenance & ongoing man-

agement

If a property does not receive on-

going general maintenance, and

if repairs are not acted upon

straight away, there are several

consequences.

It‟ll likely cost more and take

longer when maintenance or re-

pairs are eventually undertaken,

and the value of a property in dis-

repair is significantly lowered,

decreasing both its investment

and rental income potential.

Many Landlord insurance provid-

ers expect homeowners to main-

tain their property to the stan-

dards 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 mainte-

nance. Touching up the paint job

on interior walls when the prop-

erty is between Tenants is a sim-

ple task, and is reasonably inex-

pensive if Landlords do it them-

selves. It may also enable you to

add extra dollars to the rent that

you charge the next Tenant. The

same approach applies to replac-

Inspections

Routine inspections can uncover

potential problems and spark

maintenance action before they

worsen.

The Landlord may like to arrange

routine maintenance on an an-

nual basis such as: checking

drains and gutters, checking for

signs of mould or damp, having

air conditioners serviced, mend-

ing any broken or leaking fixtures

and generally inspecting and re-

pairing any aspects of the prop-

erty that could present problems.

Examining fences and garden

walls to ensure that they remain

in sound condition, together with

inspecting the roof and any chim-

neys for signs of damage, is vital.

Covering missed income

First time property owners need

to be aware that standard build-

ing 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;

ing aging fixtures and appliances.

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 assis-

tance 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 cer-

tain standards for repair are met.

If your Tenants inform you of a

problem in need of repair you

need to act immediately, how-

ever, preventative maintenance

should be applied beforehand.

For example, if your rental prop-

erty 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 substi-

tute for grass and bushes with

something that requires less

maintenance for both you and

your Tenants such as: pebbles,

gravel, bark or pavers.


The property is not Tenantable

due to previous damage.

Combining the appropriate policy

cover with diligent property man-

agement and maintenance will

help to protect the financially lon-

gevity 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 bot-

tom line.

Source: www.realestate.com.au/blog

It probably starts with buying a

house or apartment with a value

at or lower than the suburb's me-

dian 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 dishwash-

ers in the kitchen.

(Source John McGrath's "Ultimate

Guide to Real Estate" HarperCollins

Publishers.)

ing the budget," Smart Guide to

Property Investment suggests.

PAINT IT

BUILD A CARPORT

NEW CURTAINS OR BLINDS

INSTALL A SKYLIGHT

REPLACE LIGHT FITTINGS

PUT IN A BARBECUE

STEAM CLEAN CARPETS

SAND THE FLOORS

REPLACE DOOR HANDLES

AND KNOBS

INSTALL A DISHWASHER

The style and quality of the im-

provements, together with careful

budgeting, will be important as to

whether over-capitalisation be-

comes an issue. And it can cer-

tainly be minimised with reliable

professional advice, careful plan-

ning, market-trend assessment,

along with wise and sensitive

execution of the improvements.

Top Ten Tips for Value-

Adding Without

Over-Captitalising!

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 over-

capitalisation. "Your goal is to

add the wow factor without blow-

Are You Buying or

Refinancing? 3 Things You

Must Know to Have Your

Loan Approved!

Despite banks being more willing

to lend over the past 6 years, this

doesn‟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

http://www.realestate.com.au/blog


prior to bidding for that dream

home?

When looking for a property, eve-

rything 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 acknowl-

edge, 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 ap-

proval 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

for a period of 3-6 months. Other-

wise 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 im-

plies that you have enough dis-

posable income to withstand ex-

ternal 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.

Tip 2 – Ask yourself, “Can I ser-

vice the loan?”

Lenders want to ensure that you

can appropriately service the

loan. They look at a variety of

areas such as the size and secu-

rity of your income, any existing

debt, and the number and size of

credit applications you have.

If your income isn‟t large enough

to adequately repay the loan and

leave you with enough dispos-

able 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 repay-

ments – 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 em-

ployer 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 deci-

sive factor in getting approval.

That said, most budding home

buyers and real estate investors

have little idea of how they score

on their credit reports.

The simple maths is that if you

have a low credit score, you are

much less likely to secure a

home loan.

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 apply-

ing 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. Ei-

ther 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 them-

selves, or through an expert.

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


Harder to Nab a Bargain

with Vendors Discounting

Less

New figures from RP Data show

the level of vendor discounting

has dropped nationwide.

According to the latest weekly RP

Data property reports, the na-

tional average for vendor dis-

counting 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 dis-

counts of 5.51 per cent for

houses and 5.63 per cent for

units.

Cameron Kusher, RP Data re-

search analyst, said he had ex-

pected this trend to occur.

“With home values rising and

sales volumes increasing, we

would expect that the level of dis-

counting would fall," he said.

“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 signifi-

cant lift in the volume of stock

available for sale.”

The number of homes being ad-

vertised 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, ac-

cording 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, com-

pared to 6.4 per cent at the be-

ginning of the year.

Source: www.rebonline.com.au/

http://spionline.com.au/blog

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

A Selection of Properties Recently Leased

The Gap House $630p.w.

3 bed, 2 bath,

2 car accommodation

Quote

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

—Abraham Maslow

Bardon Unit $325 p.w.

1 bed, 1 bath,

1 car accommodation

RE/MAX Profile Real Estate 141 Boundary Road TEL 07 3510 5221 FAX 07 3876 5544

www.profilerealestate.com.au Bardon QLD 4065 Chris [email protected]

www.propertyrentalsbrisbane.com PO Box 388, Paddington, 4064 Helen [email protected]

Julie [email protected]

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.

Taringa Unit $390 p.w.

2 bed, 2 bath,

1 car accommodation

Calendar of Events

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 deliv-ered on what you said was going to happen! You secured a ten-ant for us within 2 days of putting the property on the market. Throughout the process you kept me updated with any develop-ments. 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

We love creating wow moments

re/max profile landlords' newsletter june 2014

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