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