Landlords' Newsletter November 2012

In this edition: How long will it take for your property to rent? Standing out from the crowd Make the most of your investment dollars Don’t Let Rain become a Drain… How to Prepare Your Drains for the Rainy Sea-son! 10 Tips for if Your Tax is Audited…

November 2012

Want to Know the Number One Tip for Getting the Best Deal with Your Home Loan? A Selection of Properties Recently Leased Quote Calendar of Events

Tis The Season To Be Selling (and Renting)...

Spring season is well and truly

here and and Summer abun-

dance hot on its heels, with sales

flowing through October that are

literally seeing us making sales

every day :) By contrast, the rent-

al market continues to be patchy

and days on the market are vary-

ing depending on the price range,

area and property. As we move

into the busiest season, our Jan-

uary to February period, we are

seeking instructions asap from all

owners with leases expiring be-

tween now and the end of Febru-

ary as to whether or not you

would like us to renew the lease

at that time (remembering that 2

months notice is needed if your

tenant is to vacate).

We will of course then make rec-

ommendations as to rental in-

creases that should be proposed

for the tenant if they would also

like to continue and extend their

lease.

We also have a special offer

available for any new manage-

ments signed up with us before

Christmas. If you list a property

with us we will pay for profession-

al photos and if you refer a friend

or family member we will give

both of you professional photos

for one of your properties and the

new management.

With Melbourne Cup coming up

next week we hope you back a

winner. Please note we will take

a few hours to enjoy and watch

the race that stops the nation.

We will of course will be hard at

work before and after the race

festivities.

Wishing you a month of wins and

success.

Christina

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 October. BRISBANE STATISTICS The Market Source: rentfind.com.au

Brisbane, QLD September 2012 Annual Change

Median Weekly Rent - House $390 1.3%

Median Weekly Rent - Unit/Apartment

$370 2.8%

Days on Market (Avg) 24.5 1.0

Days Vacant (Avg) 14.1 2.1

Standing out from

the crowd

Every would-be tenant has expe-

rienced the dismay of visiting a

potential rental property only to

find it's in poor condition.

Most renters would be prepared

to pay a little bit more for a prop-

erty that is well cared for, attrac-

tive and has a good kitchen,

bathroom and plenty of storage.

Well-maintained rental properties

have obvious benefits for renters

but making sure your property

has rental appeal can have gains

for landlords, too.

RUN property CEO Rob Farmer

suggests making your investment

property as attractive as possible

to tenants is the best way to

boost rental income.

''The smartest property owners

know that they can spend a little

to earn a lot. Some landlords are

reluctant to spend money, but

they do not realise that approach

is a false economy if the property

does not lease quickly or does

not achieve the rental growth that

it could,'' Mr Farmer says.

Rebecca Ady, senior property

manager at Kliger Wood, says

many landlords look at a rental

property as cash flow and don't

realise they need to continue to

Colin and Natasha Hibberd have the knack for turning tired rental properties into fresh, attractive spaces. photo: Ken Irwin


Real Institute of Victoria, Robert

Larocca, estimates there are

about 410,000 rental homes in

Melbourne. Vacancy rates are

going up, too, with the rate ex-

ceeding 3 per cent this year, the

highest since 2005.

''Conditions are now easier for

renters than they have been for

seven years,'' he says. ''If the va-

cancy rate falls below 3 per cent,

the balance is then in favour of

landlords and there are not

enough [rental properties] to go

around.''

Mr Larocca attributes the easing

of vacancy rates to a slowing of

the population growth rate and an

increase in building. ''If the pres-

sures on the market continue to

ease, the trend for vacancy rates

will continue to be up.''

An easing rental market gives

potential tenants more choice

and puts pressure on landlords.

Making your property more ap-

pealing to renters is key to suc-

cessful property investment, says

Mr Farmer, and it's also crucial

that landlords do their mainte-

nance on time.

''Delaying maintenance is often

counter-productive to achieving

rental growth,'' he says.

Rental appeal a matter of using

nous to achieve the best out-

come

Colin and Natasha Hibberd have

created a successful business

out of renovating rental proper-

ties. ''We focus on very tired, very

unloved properties and turn them

around quickly,'' says Mr Hib-

berd.

The couple's business, Hamley

Constructions, started out as a

property maintenance company

but has expanded to include

property makeovers and renova-

tions. It focuses on good-quality

renovations that can be turned

around quickly so the property is

not off the market too long.

''Often people have very grand

[renovation] ideas,'' says Mrs

Hibberd. ''But it's important to re-

member it's an investment prop-

erty,'' Mr Hibberd adds. ''You

want a good rental return and a

return on your [renovation] in-

vestment.''

invest in it.

''Many ma and pa landlords have

a problem in that they don't have

the cash to sink into the property.

My advice to them is to sell the

property and invest elsewhere.''

Ms Ady says landlords who don't

look after properties can also end

up at the Victorian Civil and Ad-

ministrative Tribunal. ''The basic

requirement from VCAT is that

properties need to be recarpeted

and repainted every seven years.

But you also need to make sure

that the kitchen and bathroom

are up to date.''

Renovating an older property can

improve its capital value and

rental returns. ''Even when va-

cancy rates are at record low lev-

els, tenants show a distinct lack

of interest in properties that are

tired, shabby or lacking in

presentation. The more people

who love your property, the more

will want to rent it, and increased

demand leads to higher rents and

fewer vacancies,'' says Mr

Farmer.

Communications manager at the


''I've been into thousands of rent-

al properties and I know what a

tenant expects,'' Mrs Hibberd

says. This generally includes a

clean bathroom with no mould, a

modern kitchen with decent appli-

ances, storage, and carpets and

paintwork in good condition.

The Hibberds say upgrading a

tired property can be a quick way

to increase rental return and en-

sure a property is rarely without

tenants. Their recent renovation

of a South Yarra studio apart-

ment included installing a new

kitchen, renovating the bathroom,

tweaking the layout to include

more storage and better flow and

repainting and recarpeting.

After a six-week renovation the

result was a fresh apartment,

with appeal for a professional

tenant and a weekly rent in-

crease for their client. Before the

renovation the rent was $200 a

week, afterwards it climbed to

$285. The cost to their client was

$32,000, not including loss of

rental income during the work.

Hodges sales agent Andrew

Boyce says he estimates the ren-

ovation has increased the market

value from about $230,000-

$240,000 up to $280,000-

$300,000. Mr Boyce suggests it's

likely the client would easily cov-

er the cost of the renovation in a

sale, even in today's uncertain

property market.

The Hibberds stress that renovat-

ing a rental property is different to

renovating your home. The aim is

to increase rental income and

make sure the money is well

spent. Their tips are:

Invest in good-quality, mid-

range Australian-made applianc-

es. Parts are easier to source

and cheaper to replace.

Aim for classic rather than on-

trend interior design.

Bathrooms need good venti-

lation, basic storage, towel rails

or hooks. Choose a clean and

simple look such as large white

tiles and glass shower screens.

Bathrooms must be properly

renovated if you want to avoid

future problems. Leaks and damp

will damage your property and

are costly to repair. Damage to

neighbouring properties can lead

to legal battles and further ex-

pense.

Low-maintenance gardens

are essential.

Avoid motorised blinds or car

doors. They break down and are

costly to repair.

Avoid built in appliances such

as coffee machines - if they

break they're the landlord's re-

sponsibility.

Source: news.domain.com.au April

1, 2012

Make the most of your

investment dollars

Why do some people struggle to

buy one investment property and

yet others manage to own five or

six? The answer isn't simply that

they have more money.

Investors who are creative in

their approach to financing and

who thoroughly research the im-

portant real estate indicators rou-

tinely achieve their goals faster

and with less hassle.

There are several well-known

ways to increase a property port-

folio. You can take out an interest

-only loan, buy with partners as

Owning an investment property is not out of reach, it simply requires an astute approach. Photo: AFR


''tenants in common'' or tap into

your home equity.

All of which help free up cash

flow, enabling you to make more

substantial contributions to a

principal place of residence or to

access cash flow for other invest-

ments. Coupled with buying in-

vestment properties in the right

place at the right time, these tac-

tics have reaped financial re-

wards for many people.

But savvy investors take their

strategies to the next level. Let's

look at some of the less-

traditional approaches to more

profitable property investing.

Varying your income tax

If you're negatively geared, a

good way to improve immediate

cash flow is to ask your account-

ant to submit an income tax vari-

ation form to your payroll office.

This reduces the tax rate charged

on your wages by estimating your

total end-of-financial-year tax po-

sition in advance. Rather than

receiving a lump sum tax refund,

you receive money evenly

throughout the year.

Line of credit with a global lim-

it

This is a line of credit home loan

with a ''global'' or ''umbrella'' limit

and several sub-accounts. It

gives you maximum access to

your equity to optimise your in-

vestment opportunities. The loan

can be operated with multiple ac-

counts under one global limit.

Mortgage Choice spokeswoman

Belinda Williamson says line of

credit accounts can be attached

to a credit card. ''If you earn a

decent income, using a credit

card for expenses should mean

that most of your income stays in

the loan until the credit card pay-

ment is due, which helps to re-

duce the loan balance.''

Targeting distressed vendors

Successful investors don't ap-

praise the properties on the mar-

ket in an area, they try to work

out why they are for sale. Paul

Osborne, of the buyer's advocate

firm Secret Agent, says it's a

smart move to understand

household indebtedness in spe-

cific areas to snare a bargain.

He says many households are

managing to service only the in-

terest repayments, not the princi-

pal amount, of their home loans.

As a consequence, the best buy-

ing opportunities tend to be in

suburbs that have high propor-

tions of household debt.

A secondary dwelling as an

investment

Building second dwellings, such

as granny flats, on the land held

by either an owner-occupied or

an investment property has be-

come a growing trend. These

dwellings can generate extra

rental income and increase the

property's future value.

They also provide depreciation

benefits and must be council-

approved. Lending criteria for

secondary dwellings varies from

lender to lender and it's smart to

monitor how such additions in an

area have shifted property val-

ues.

Choose a loan tailored to your

needs

Depending on your finances, life-

style and investment portfolio,

there are a range of property

loans to consider. Ms Williamson

recommends checking the health


of your home loan at least once a

year.

''You should make sure that your

loans not only meet your current

needs but also take your future

needs into consideration,'' she

says. ''Make sure that you are

managing your loan, rather than

letting it manage you.'' Always be

aware that new products are en-

tering the competitive housing

finance market constantly.

Source: news.domain.com.au March

17, 2012

any blockages, breakages or

hazards that may cause prob-

lems when you experience high

rain fall. A CCTV drain camera

can not only see the leaking, bro-

ken or blocked drains, but also

location and depth. This will save

time and money on any repairs!

Dispose of waste properly

When substances, such as fats,

oils and objects other than waste

water, are flushed down the drain

they cause major problems. You

can help prevent drains and sew-

ers becoming blocked or dam-

aged by using drain sieves and

locating a rubbish bin convenient-

ly near the toilet, bathroom and

kitchen sinks for the disposal of

all debris. It's also a good idea to

keep the bathroom and toilet

doors closed when possible as

a deterrent to small children and

their toys.

Use a licenced Plumber for all

new drains

A licensed plumber is required to

complete all sanitation, water

supply and drainage work. The

importance of this is that storm-

water drainage and sewer pipes

systems are seperate and can

cause serious pollution and

health risk if mixed up. This could

also result in prosecution if sew-

age is disposed of in stormwater

drains or if rainwater incorrectly

connected to sewer pipes leads

to sewage overflow. Plumbers

are also aware of local utility and

council requirements for new

connections and other plumbing

work.

Cleaning of drains and gutters

You can help prevent blocked

drains by regularly cleaning out

your gutters and down pipes of

leaves, twigs and debris. This will

prevent debris being washed into

the drains when the summer rain

starts to fall.

Plant vegetation away from

drains and sewer pipes

It's a good idea to keep vegeta-

tion away from drains and sew-

ers wherever possible and plant

new trees at least 3m away. Con-

versely, when installing new

drains or sewer pipes try to keep

them at least 3m from estab-

lished trees. You can consult

your local nursery for advice

about suitable trees and bushes

to plant.

Take care with backyard land-

scaping and construction

Don’t Let Rain become a

Drain… How to Prepare

Your Drains for the Rainy

Season!

Damaged or blocked drains, sew-

age pipes or stormwater drainage

can quickly become hazardous in

wet weather. Below are some

practical suggestions to help you

prevent the rainy season from

spoiling your holiday season:

Drain and sewer pipe survey-

ing

Using state of the art equipment,

a quality plumber will survey your

drainage system to help identify


Be careful when completing any

backyard work that you don't

damage any drains or sewer

pipes by digging or the weight of

heavy machinery. It's a good idea

to take advantage of the Dial be-

fore you Dig referral service to

identify the location of any under-

ground sewer pipes or drains that

could be damaged. A ruptured

sewerage pipe could cost you in

fines and repairs, and result in

serious health issues to your

family.

Source : Neil T Fallon

ATO straight away and limit

the damage

Keep your receipts and

have them all in order and

ready for the tax office

Make sure you have a de-

preciation schedule from a

quantity surveyor if you are

claiming depreciation for

rental properties

Have a 13-week log book

for car deductions

Seek professional advice

from a tax lawyer/

accountant who has experi-

ence in dealing with ATO

tax audits

Get everything prepared in

advance – bank state-

ments, records, invoices

and receipts

Be honest, and explain an-

ything relevant in as timely

a fashion as possible

Don’t sign anything until

you fully understand the

document, and agree with

the conclusions that it has

come to

• If necessary, seek a payment

plan or a retraction of penalties

Source : Your Investment Property

(17 July 2012)

10 Tips for if Your Tax is

Audited…

What do you do if the ATO

comes knocking to make sure

that all of your property invest-

ment deductions are genuine?

Don't panic, Your Investment

Property offers 10 bite-sized tips

to get you through the audit pro-

cess.

Don’t freak out. You are

innocent until proven guilty

If you have done the wrong

thing then fess up to the

Want to Know the Number

One Tip for Getting the Best

Deal with Your Home Loan?

How do you know which lender is

offering the best deal for your

home loan? There are so many

different interest rates and deals

available.

In order to make it easier for con-

sumers to work out the true cost

of a mortgage, all lenders must

disclose a benchmark compari-

son rate in their advertising of

home loans and personal loans.

Designed to reflect the total an-

nual borrowing cost, it wraps up

all the interest payments and

fees, showing them in a single

percentage figure. For instance,

a bank's advertised interest rate

may be 5.49 per cent, but its

comparison rate 6.75 per cent.

Source : Quartile Property Network

(2 August 2012)

15 November Mid Month Accounting 03 December End of Month Accounting

A Selection of Properties Recently Leased

Arana Hills House $420p.w.

3 bed, 1 bath, 1 car accommodation

Quote

"Those who bring sunshine into the lives of others can-

not keep it from them-selves."

-- James M. Barrie

Coorparoo Townhouse $500 p.w.


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

www.profilerealestate.com.au Bardon QLD 4065 TEL 07 3510 5227 Nikki [email protected]

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

Marcia [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.

Brisbane City House $560 p.w.


Calendar of Events

Landlords' Newsletter November 2012

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Transcript of Landlords' Newsletter November 2012