re/max profile landlords' newsletter march 2016

In this edition: How long will it take for your property to rent? Want the Secret to Future Cash Flow Success? Tenant Damage or Fair Wear and Tear? Sort it at the Start…

March 2016

Keeping it Clean – Who Decides? A Selection of Properties Recently Leased Quote Calendar of Events

Dear Landlord,

We are seeing the rental

market cool off after our

busiest couple of months.

Days vacant are increasing

and we continue to strive to

maintain our better than

average times to get you

rented.

PLEASE check your Landlords

Insurance includes loss of rent

and accidental damage we

know are not covering the

things you might need in the

Rental Market and Team Updates

future when there are great

policies out there that cover

everything economically.

Our focus is always to improve

our systems and service and

coming soon we will be

i n t r o d u c i n g a n e w

maintenance system which

increase communications to

both landlords and tenants

and accountability from our

tradespeople and property

managers. As always there

will be a full audit report if ever

required to protect you if the

tenant challenges something.

Thanks for your continued

support if there is anywhere

you believe we can improve

our systems we would love to

hear from you.

Your Property Management

Team,

Christina, Helen, Iszabel, Alex,

Kobe, Freda and Katrina

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 February.

BRISBANE STATISTICS The Market

Source: rentfind.com.au

Brisbane, QLD February 2016 Annual Change

Median Weekly Rent - House $425 1.2% increase

Median Weekly Rent - Unit/Apartment $390 0.0%

Days on Market (Avg) 32.5 2.7 increase

Days Vacant (Avg) 19 2.3 increase

Want the Secret to Future Cash

Flow Success?

Calculate depreciation deductions

before purchasing your next

property

Investors often question the ongoing

costs associated with a potential

purchase. When considering the

purchase it is important to ensure

there will be a maximum cash return.

There’s a myriad of expert advice

available and every investor has

their list of essential property

inclusions.

Astute investors consider the

potential rental return of the

property, the property’s location in

proximity to local services and

facilities, l ocal employment drivers

and historical growth of properties

within the area. Meanwhile, other

investors limit their options by only

looking at properties within close

proximity to their home.

To get a true calculation of a

property’s ongoing cost, investors

should calculate the tax deductible

costs and other deduct ions

avai lable, such as property

management fees, rates, interest,

repairs and maintenance and

property depreciation.

These deductions add to the

investor’s net cash return and every

deductible dollar is returned to the

owner at their marginal tax rate.

The amount of depreciation available

varies significantly from property to

property and can be difficult to

estimate. For this reason, investors

often fail to consider the financial

benefit of claiming depreciation prior

to making their purchase. By

i n c o r p o r a t i n g d e p r e c i a t i o n

calculations prior to making a

purchase, an investor may find the

property to be more affordable.

Case study

Vanessa and Greg have been look-


ing to buy a townhouse as an

investment. A property they have

recently seen listed, a two bedroom

townhouse on offer for $495,650, is

in great proximity to schools, shops,

public transport and a park.

Before making an offer, Vanessa

and Greg have completed some

preliminary research by asking their

Property Manager for a rental

appraisal of the property. This

appraisal found the property to have

an expected rental income of $505

per week, or $26,260 per annum.

Vanessa and Greg also estimated

the costs involved in owning the

property should they decide to go

ahead with the purchase. These

costs totalled $35,639 and included

interest, property management fees,

rates, repairs and maintenance.

Vanessa and Greg were aware that

once the property became income

producing they would be entitled to

claim depreciation deductions for

both the building structure and the

plant and equipment assets. They contacted a Quantity Surveyor for a

depreciation estimate, who found that they would be able to claim

approximately $9,500 in depreciation deductions in the first full year.

This example shows how including depreciation in the calculations prior to

making a purchase can really assist the buyer in making an informed decision.

Without depreciation, the property investor would experience a loss of $114

per week during the first year of owning the property. By claiming depreciation,

this cost is reduced to $46, saving them $68 per week or $3,536 in the first

year of ownership.

Once an investor has made their purchase and the property becomes income

producing, the income earned from depreciation can make a big difference to

the owner’s cash flow.

Article provided by BMT Tax Depreciation.

Bradley Beer (B. Con. Mgt, AAIQS, MRICS) is the Chief Executive Officer of

BMT Tax Depreciation.

Bradley joined BMT in 1998 and as such he has substantial knowledge about

property investment supported by expertise in property depreciation and the

construction industry.

Bradley is a regular keynote speaker and presenter covering depreciation

services on television, radio, at conferences and exhibitions Australia-wide.

Please contact 1300 728 726 or visit www.bmtqs.com.au


promptly and negotiation take place.

It is never completely certain who

will win if a case is taken to the

Tribunal in this situation.

Remember that mediation is

available in many states across

Australia if you need some

assistance in the negotiation proc-

ess.

Source:

Erin Kelly, Real Estate Dynamics

opinions on cleanliness, however the

fact still remains ‘Clean’ is any area

or item that cannot be enhanced

with a cleaning product’. This

definition was given to me by a

trainer when I first entered the

Property Management Industry and

it has stuck with me ever since. It is

hard to argue with the logic behind

this statement.

The best way to ensure the condition

of the premises at the conclusion of

the tenancy is to give some

parameters when Notice is given or

received. Give the exiting Tenant a

copy of your Agency cleaning

checklist, even highlight those

general items that are usually

forgotten ie Door tracks, Oven and

Fans. You can also give the Tenant

some tips if you have noticed some

issues at a prior inspection. Don’t let

the situation get worse and even

harder to control if you can work with

the Tenant. As an Agent/Landlord

you don’t want to automatically take

their bond. If that little extra note on

a cleaning checklist or a quick email

after an inspection will stop the

arguments at the conclusion of a

tenancy, why not take that extra time

– it will save you a headache later!

Source:

Erin Kelly, Real Estate Dynamics

Tenant Damage or Fair Wear

and Tear? Sort it at the Start…

Our Residential Tenancies Act’s

refer to “Fair Wear and Tear” with

regards to the handing over of a

property by the Tenant at the

conclusion of a tenancy. There are

many definitions available for Fair

Wear and Tear so what do you go

by?

There are numerous Tribunal cases

each year in all states across

Australia with regards to the

conclusion of a tenancy, and much

of these focus on the condition of

the premises.

It has been deemed by many

jurisdictions as well as Tenant’s

unions that Fair Wear and Tear is

defined as ‘damage that occurs

during normal use or something

that happens due to aging’.

This can also be left open to

interpretation.

The best suggestion in this situation

i s t o ensure tha t a t t he

commencement of a tenancy that

both Agent/Landlord and Tenant are

in agreement about the condition of

the property.

At the conclusion of the tenancy any

discrepancies should be dealt with

Keeping it Clean – Who

Decides?

The age-old dilemma; my definition

of clean is frequently different to the

Tenant’s definition.

Not a week goes by that an Agent/

Landlord does not hear the words:

“But it was cleaner than when I

moved in”.

There are many different standards

of cleanliness in society and we

cannot enforce our own views on

people. However at the conclusion of

a tenancy there must be an

agreement that the property is

returned to the condition that it was

given to the Tenant minus Fair Wear

and Tear.

You can have argument after

argument about the differing

15th March Mid Month Accounting 25th March Good Friday (Office Closed) 27th March Easter Sunday (Office Closed) 28 March Easter Monday (Office Closed) 1st April End of Month Accounting

A Selection of Properties Recently Leased

Windsor House $730 p.w.

4 bed, 2 bath 2 car accommodation

Quote

“If you have a dream, don’t just sit there.

Gather courage to believe that you can

succeed and leave no stone unturned to make

it a reality.”

—Roopleen

Chapel Hill House $755 p.w.

4 bed, 3 bath, 2 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 Helen [email protected]

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

Alex [email protected]

Kobe [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.

Windsor House $690 p.w.


Calendar of Events

Indooroopilly Apartment $595 p.w.


Kelvin Groove House $725 p.w.


Bardon House $690 p.w.


re/max profile landlords' newsletter march 2016

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