Sydney Rental Market Update

22/8/2019

A slight climb in Vacancy Rates is always the norm around June coming into the winter months but this June up from 2018’s 2.8% vacancy rate for the same month.

The figures don’t lie and it does represent a shift where there’s been much more supply to meet similar demand levels. Time on the market is what’s been most frustrating as tenants take their pick of what’s on offer and then making offers on rentals their interested in.

The winter months do mean a seasonal time for hibernation in a sense with not many tenants wanting to make a move unless they have to or really want to.

On the front line, I’m seeing less enquiries and fewer prospective tenants through properties overall. With some one-off offerings, that look like great value, tenants are turning up but many turn away when the offers been too good to be true.

The Key has been to keep your rent in line with other similar properties or pay the price in Vacancy, tenants will still apply if it’s the right fit but they’re looking at so many more properties than ever before looking for the best value for money, quality properties, position and access to amenities. Rent reductions have been key to getting properties occupied quickly otherwise they risk getting stagnant on the market.

Whereas usually you would see slight rent reductions done over weeks, many owners and savvy agents wanting to cut to the chase offer significant reductions knowing that some Income is better than none!

If you need any advice or want my opinion on your Vacant Property feel free to contact me.

Hoping for a more positive report next time with a little less on the market, though I know many tenants that are hoping it remains in their favour, obviously!

Personally, I feel it’s on the up much like the sales market where things are showing positive signs of improvement as is showing in July’s Vacancy Rate Survey Results, down to 3.0% from June to July, so just in time for some warmer weather. Yes the property markets are cyclical but also seasonal and Spring is just about here!

Residential Vacancy Rates (Inner Sydney):

Jan 2019        3.2%

Feb 2019        2.9%

Mar 2019       3.7%

Apr 2019        3.2%

May 2019       3.1%

Jun 2019        3.4%    June 2018      2.8%

July 2019       3.0%

Things are looking up just in time for Spring.

Antonio 🙂

 

How easy is it to Change your Managing Agents?

6/8/2019

Firstly, let me say it’s not like the daunting task of refinancing your home loan to another lender but we all associate with that task as being a huge undertaking. I wouldn’t know about changing banks though because like you, who has the time and patience for that.

BUT Changing Property Managers, isn’t that hard from the landlords, or even the tenant’s perspective which I’ve found is a real concern for a lot of landlords. They don’t want their tenants to be concerned or inconvenienced. Fair enough, but it’s a pretty simple process and one that’s largely undertaken by the new agent you’ve chosen to manage your property.

What does it mean for Tenants?

As an owner you might be concerned about the inconvenience caused to your tenants but this is it.

  • Tenant does need to change where they pay rent to, most agencies offer similar payment methods anyway and all need to provide a fee free payment option by law
  • The tenant has a new point of contact should they need anything
  • An inspection will be needed after the changeover for your property manager to familiarise themselves with the property and assess any outstanding or new issues your tenant might want to raise
  • It would also be fair that the new agent gives the tenant a brief explanation as to what initiated the change to give them some peace of mind

Not hard at all right? If anything, maybe your tenant will like the change and dealing with someone new or even more attentive. Who knows?

And for Landlords?

Three simple steps and these can be found by clicking here on my website.

Because really after these steps it’s up to your new agent to carry out a physical inspection and collection of your documentation relating to your property and its tenancy.

It’s that simple and straightforward that this is my shortest blog post to date.

If you’re thinking of making a change or would just like to have a chat about anything and everything Property Management feel free to contact me here.

Look forward to hearing from you.

Antonio 🙂

A Landlords Rights & Responsibilities – the brief run down

25/7/19

At some stage in the near future it will be a requirement that all landlords read and sign a disclosure that they have read and understood their rights and responsibilities – BEFORE – a lease can be signed but ahead of that I’m going to outline some of these as briefly as I can keep it.

I would be confident in saying that the majority of landlords would be well aware of their responsibilities and even their rights as a landlord and where I’ve come across that don’t, I feel it’s a Property Managers duty to educate and inform their landlords along the way. This ensures landlords are not unknowingly breaching their responsibilities as well as protecting their rights.

I think it comes down to a Property Manager looking after their clients Best Interests which in turn also ensures the property and its tenants are looked after as well.

TIP: Ask for a copy of a Blank Lease Template and you’ll be able to read everything that you’re technically agreeing to as a landlord.

So, I’ll keep this post really simple and lay out what an owner should / needs to be doing to look out for themselves first and fore most and for any tenants reading, this applies and assess who’s looking out for you!

  • Be Selective with your Property Manager, do not base a final decision purely on fees. You get what you pay for- always. You need to pick someone that’s efficient and communicative.
  • Present your property in the best way you possibly can to attract the best possible tenants
  • When selecting a tenant, you can choose the best applicant for your property, but you cannot discriminate purely religion or race.
  • Each and every repair is your responsibility (aside from standard light globes) try and have all repairs up to date before tenants move in.
  • Leases can be for 6 or 12 months, longer leases can be negotiated though
  • Landlord Insurance is highly recommended, with a bond consisting of 4 weeks rent it’ll do little to cover your financial losses in many possible scenarios
  • All repairs should be action as soon as possible with express requirements of Urgent Repairs. In any case, all should be acknowledged and tenants informed along the way. Your agent should be given your instructions on how to act should they not be able to contact you.
  • Smoke Alarms should be checked annually, an owner’s responsibility, all agents will recommend outsourcing this for a small annual fee. Invaluable for peace of mind!
  • Pets are more common than not these days so be open to the possibility; many apartment buildings have an approval process in place but you have the ultimate say. Give Pets consideration in order to open up your property to so many more prospective tenants
  • Your agent will do periodic inspections of the property, you should think of these as monitoring the condition of the property and how it is being maintained. These inspections are not necessarily to check the tenants living habits unless they are damaging or causing excess wear and tear.

Landlords, It’s not always fun. I called an owner the other day and had to promise her next time I called her I’d give her good news because it’s been challenge after challenge of late. So I called her and gave her my own personal good news, my wins for that week.

I get it, sometimes we just need to hear something positive and not just be thrown issue after issue.

And that’s what you have to do, roll with the punches. It’s not always satisfying to have tenants because of the rental income. The income goes straight away to mortgages, rates and bills, but having a happy tenant and a smooth-running tenancy can be very satisfying for many landlords.

You don’t always reach that point where all parties are consistently happy but if everyone is meeting their end of the agreement then that, is the bare minimum we should always all expect.

If you have any questions about this Post or anything else Property Management reach out to find out more about my services or simply if you just need to know where you stand!

Curious to see a copy of a Draft Lease, Email me and i’ll flick one straight back at you.

Antonio

Buying into ANY Strata Building

27/6/19

I recently posted a blog covering what to look for when buying into a NEW Strata Building and I had promised a more general post about buying into a Strata Complex that’s existing.

In light of the recent Mascot & Opal Towers matters I thought it needed to be written, aside from all that we’re hearing in the media, there’s a lot here but it’s worth noting all of these points!

I’d really recommend reading this and as much as you can before going out to look at apartments, you simply can’t afford not to. We now have in Mascot, uninhabitable properties where leases are easily broken and owners paying mortgages and extra levies with no income and a property they cannot occupy. I can not imagine the toll this is taking on peoples lives.

One thing that sticks with me is that we as Australians have more consumer rights and guarantees for an appliance than an apartment. Think about that for a second.

FACTS:

  • In NSW alone about 15% of the population live in Strata Apartments that’s over 1.1 million residents in NSW  according to the Australian National Strata Data 2018 report carried out by UNSW and Strata Community Association
  • A massive 48% of these are occupied by tenants
  • Nationally it’s 2.2 million so NSW holds a huge portion of Strata residents

As a Property Manager, property in Strata titled complexes i.e. a Strata Plan, make up the majority of rental properties managed for many agencies and many investors specifically choose to buy into a Strata Plan for their investment property.

So why do I invest and think others invest in apartments specifically?

When you buy into a Strata plan, you’re effectively buying allocated airspace, aside from what’s affixed to the floors and walls those structural floors and walls are owned by and therefore maintained by the Strata Plan.

So, if you get your airspace and fit it out well and maintain your fixtures and fittings then you essentially have less maintenance and easily lettable space, for everything else that’s a common area issue you can report that to your Strata Managing Agent but be aware of all of the following!

As an investor, your property manager should know what’s what and do the liaising on your behalf with Strata.

Essentially, I believe that if your property in a Strata Plan is in a good location and that the complex itself appears to be well maintained then you have a good investment but there are a few things to look out for and be vigilant about before committing;

Check the By-Laws              

Each Building has a set of By-Laws, rules to live by, that apply. A lot of these are standard but you need to know what’s allowed and what isn’t. Look for things like Pets, when you can and can’t move in and out, smoking etc. Definitely read through them all. Tenants MUST be provided a set of the By-Laws when they move in.

Carry out a Strata Search with Budget Forecasts included

Any Strata Building has running costs as well as forecast future upgrade costs. Make sure that the building has built up a healthy fund known as a Sinking Fund, that shows a decent balance for what the building will need down the track. New lifts, painting and sprucing up. Low balance and when necessary upgrades come up all owners will be hit up for some quick fund raising regardless of when you bought in. These searches will also show how good everyone else is at contributing or do are the arrears huge. Your conveyancer / solicitor should be able to seek and assess a Strata Search.

You’ll need to check some of the past meetings, you need to know what’s going on and that there is an owners committee that cares about the building.

I’d also be looking through as many common areas as you can, look for cracks, signs of damage or poorly maintained areas. It could be an indicator for a building where not a lot gets done!

Check if there are any capital works proposed or that might be needed.

This should be highlighted in the Strata Search and noted by your solicitor or conveyancer but you want to question and know if any major projects are in the works that might be at your expense. Things such as dealing with upgrades or concrete cancer involve a lot of work and long-term expense. They also highlight that the building may have issues that you don’t want to be part of or that won’t make it worthwhile investment. If you’re set to lease this property then you want to make sure that there’s nothing in the works that will be an ongoing inconvenience or turn off to potential tenants.

Any other planned developments in your area

Is your view going to be obstructed or street parking set to be lost due to a new complex going in? These are all things you need to know and can find out by filtering through Development Applications via your local council online or by calling. Take a walk around the area and try to pin point land that might be slated for redevelopment, this can effect infrastructure down the track and the availability of local resources. We’re also hearing a bit too often of damage to existing buildings when a new one goes up close by

How much are your Strata levies?

Now this directly affects your bottom line, each and every quarter. The more amenities the building has the more the levies. Do you need or want access to a pool or onsite building manager? Those costs go up over time and not down as does the upgrade of elevators the more a complex has the more it’s going to cost to upkeep and that’ll come down to how the sinking fund looks now and is maintained. Lots of Strata plans need to enact Special levies to raise money when necessary upgrades occur so you need to be aware of what the building will need down the track and be prepared to contribute. You therefore can’t always budget on the current levy amount as some buildings see that rise year on year, to one of my investments there’s been a 45% increase in 7 years.

Design & Appearances

Appearances, you know, can be deceiving. You need to have a thorough look at the building  and look at it as an outsider. Ask yourself:

  • Impression as you walk up to and through the building
  • Is it well presented and maintained, lawns and gardens tidy
  • Do the exterior, internal or common area walls have any issues like cracking, peeling or running paint etc.
  • Pay attention to the materials used internally and externally as well as the overall quality of the construction. If in doubt take someone along to inspect with you
  • If possible, research the developer, check out their other sites, their overall build quality and reputation. Good to see how other builds are holding up down the track, They NEED to have a good track record.
  • Is the car park well lit and dry? If it’s not dry then find out why

Internally you want to make sure the apartment itself has a good layout, light throughout the day and air flow are specifically important. Tenants look for these things. Make sure bathrooms have some form of ventilation preferably a window or at the least an exhaust fan. Not all apartments are the same, you want to make sure the bedrooms are reasonably generous and the living room. An internal laundry or fixtures for a washing machine at the least are valuable additions.

If parking is a feature then check its location and accessibility as well as the carpark generally, is it well lit, laid out and reasonably maintained.

Lastly on this point. You need to consider your ideal tenant that you’re seeking and it needs to appeal to that demographic, families, couples and singles all have differing needs so consider that when factoring in the location, size and layouts.

And FINALLY

Don’t look at an apartment and fall in love, really look around and ask questions. Do all of your due diligence and one would hope that you buy into a (hopefully) hassle free strata complex. Ask agents, ask Strata Managers and people in the area for advice on building history.

There’s a lot to think about, along with financing your purchase but these are valid points you need to consider before committing. If it will essentially be an investment property then you don’t need to be able to live there yourself and you personally don’t need to live it but it needs to be attractive to future tenants and have the right layout and management behind it, to make it a worthwhile investment in the long term.

It’s obvious that with the recent events impacting Opal & Mascot Towers that reforms are needed when it comes to Building Regulations which are finally being looked at. You can read the latest here on what’s being proposed by the NSW Government to step in and get involved on this important issue.

Happy to help with any advice you might need.

Happy Buying- Antonio

To Furnish or Not to Furnish your Rental Property

15/5/2019

This gets asked a lot.

A few months ago, I was reading “The Subtle Art of not giving a ^%$” and something stuck, not quoting word for word but the message came across clearly, the more we have in life the more we have to maintain, the more we have on our plate and more to manage. This really applies here as well. Also, well worth a read!

At several stages over the years where managing furnished properties I’ve had to call owners about replacing or upgrading furnishings. I remember one time where a landlord was outraged, they had to replace a vacuum cleaner that had stopped working, from memory to appease them off to The Good Guys I went to get a new vacuum cleaner. I always say though, the more you leave within a property the more responsibility and upkeep costs you have as a landlord and that goes for anything you provide with your rental property at the outset.

Leasing furnished properties is really the exception and not the rule, furnished properties being offered with Residential leases are not come across by on the regular.

Believe me the costs do come, a Fridge that’s worked fine for years will need new seals or re gassing, a chair may break and so on.

So if you really do want to lease your property furnished or with any inclusions that’s something to be aware of. As an agent the upkeep and management of a furnished property is a lot more involved, thorough inventory reports are needed to be provided with the properties for one thing and maintenance will be more regular.

From a tenant’s point of view, it’s quite clear cut, a tenant will either want a property furnished or unfurnished.

If you as a landlord want to leave a one-off appliance, most commonly a fridge or washing machine then your Rental Listing should indicate that and prospective tenants told by the agent when viewing the property. That one-off inclusion then just needs to be listed on the In going condition report and photographed- and the responsibility to maintain will be on the owner of course.

Interestingly, In my experience owners are relocating and don’t have use for their furnishings and are not purposely furnished for leasing, so the key is here, removing any personal and precious items. I once appraised a property in Redfern that was complete with Antique and beautifully details furniture and bric a brac, I had to walk away from that one sensing the owners attachment to their pieces.

Want to lease your property furnished? Here’s some pro’s and cons’

PROS

Owners are likely to save time, money and effort. i.e.  removalists and ongoing storage

If it presents well then it can help when leasing vs presentation of a vacant property

Rent achieved (maybe) slightly higher, dependant on overall presentation and quality of included furnishings

CONS

Owner is responsible to maintain anything included with the property, furniture and appliances

Furnishings are subject to wear and tear and upgrades and replacements will be needed

Prospective tenant pool is decreased, more tenants demand long term and unfurnished property

Increased change over in Tenants, tenants seeking furnished properties typically want shorter leases and not long-term tenants. They maybe on short term work contracts, travelling etc.

Agent costs may be slightly higher due to increased initial and ongoing work required

You will need to be flexible; some tenants will want to negotiate what stays and what goes

The time frame in which to lease the property is typically longer, although this can be seasonal and dependant on your pricing and overall offering

TIPS

-Be open to un-furnishing or partly if the ideal tenant comes along and present this option in your advertising if you want to make that available to prospective tenants.

-Find the right agent that wants to help with your furnished property and knows what they need to cover in terms of documenting the tenancy and properties condition and inclusions. Someone that already manages furnished properties already.

-Furnishings and overall colour scheme will have to be neutral with some key points of interest such as art, great rugs and homely touches. A complete IKEA display suite might not attract tenants.

While I don’t absolutely love or loathe working with furnished properties and only manage 3 furnished properties, there is more work involved, more to think about and always a smaller target market looking for furnished properties. As an owner you need to decide if your property and your needs will align with the that target markets needs and wants.

I also feel that it’s in the owners best interests to have a longer lease, less to maintain and therefore less ongoing costs when considering that there are turn over of tenants and therefore agency costs and the usual risk of vacancy between tenants.

Patience and persistence is key, to find the right tenants and my main goal is to find tenants that will sign a 6 or 12 month lease and plan to stay on for a reasonable amount of time. The main reason being to prevent a cycle of turn over that’s costly to the landlord and at the same time we’re preventing wear and tear and unsteady or unpredictable stream of income.

Lastly though I think some properties are better suited than others to be leased furnished so worth getting an agent through that can assesses the pro’s and con’s of your particular property.

Have I missed anything?

A 🙂

Buying off the plan and into a New Development? Read this!

26/4/2019

With so many New Developments being delivered in and around Sydney many of these new properties are being bought as investment properties, I’ve heard estimates of 200,000 new properties being completed this year alone.

It’s likely that this trend will continue, having been the first property manager to oversee the hand over, leasing and ongoing management of several new properties I thought it’d be useful to share my experiences of some common occurrences when buying new.

This is also a post that maybe a few of my clients would’ve liked to have come across before they had purchased, they’re Investment property off the plan or in a Newly completed building.

This isn’t to say in any way that they’ve made a bad decision but there are somethings that a developer or selling agent won’t tell you. I don’t sell so have nothing to lose!

Further to that, as a Property Manager it’s on us to foresee these issues where possible but some have been new and surprising, even to me.

NEW BUILDINGS MEAN, NEW…

  • …Defects

A new building is not and never without some form of defect or defects but owners and agents will be provided with a guide on how to deal with these and they should be reported as soon as possible to the appropriate person.

New Buildings are increasingly improving their procedures and the information they provide at handover.

Defects can be anything from patchy paint work, doors that don’t line up, appliances not connected (it’s happened) leaks or any number of teething issues.

The first tenants will likely pick up on these as they start to settle in so it is crucial to make sure tenants are assured that you want these issues reported and as soon as possible so that these defects do not become the owner’s responsibility down the track.

 

  • …Rules

Move ins (and outs)

Many newer buildings now require that tenants pre book they’re physical move in date along with a timeframe, some even require that tenants leave a deposit in case of any damage to common areas.

For the most part it’s to ensure that there aren’t an excessive number of move ins at any one time, or that the move will disturb other occupants. It also allows the building managers time to put up protection curtains within the elevators or assign a lift for the tenants use.

It’s also important to know if the building doesn’t allow moves over the weekend- have been caught out there, and never again. Weekends are tenants preferred move in dates so new tenants need to know well ahead of time and generally book well in advance is as they will decline requests where there are other bookings already set.

 

TIP: Make sure your agent has the appointed Strata Manager and/or Building Managers details so that they can obtain all the information they need.

 

Keys

Security keys, swipes and access cards are strictly limited in newer buildings where the aim is to really ensure the building is only accessed by those that need access. Definitely something to be mindful of if you have 3 Tenants, and your access limit is 3 security passes per apartment- this means no spare set available. See Costs sub-heading to follow!

 

By-Laws

Every building has its own set of By-Laws, these always need to be reviewed but especially within a new complex so things like I’ve mentioned above can be picked up.

New Properties should come with an Owners Guide which will include;

-By Laws

-Contacts for Developers, Builders, Strata and Building Managers

-Instructions relating to appliances and fittings

-Procedure for reporting issues, defects

 

Worthwhile sharing with your tenants as well!

 

  • …Costs

You’ve paid for a brand-new property but are there hidden costs? Well there may be.

If you have more tenants on a lease than you have security keys these need to be provided to all tenants listed on the lease, some buildings limit how many they’ll issue to each property- that limit could be just at settlement or a limit imposed permanently.

With a new building, will come a New Development Charge if your tenant wants to be connected to the NBN. Currently $300.00, as to who’s responsibility it is to pay is highly debatable. While the lease will state it’s the tenant’s responsibility, a lot of advice on this leads to fact that owners “should” reimburse tenants as that connection will remain with the property long after the first tenants have moved.

Does your property come with Blinds?

A worthwhile question asking at the point of purchase or you’ll need to provide these for tenants and arrange them once you have possession. From my experience most New Developments don’t come with any window coverings.

Repairs are inevitable with all rental properties and one would think that with a new property there would be little to maintain, and you would be right as most repairs would come under defects so reporting these are crucial in the first weeks.

 

  • & Look out for!

When doing your Pre-Settlement Inspection, which should be the time you’re looking for defects is to take a close look at the finished paint job.

Not only obvious patchy paint work but it’s sometimes obvious that new apartments are only given one undercoat and one coat of paint, you’ll be able to tell by the appearance and it is especially obvious on any internal door frames.

Have a feel of bench tops surfaces and floor boards, while everyone loves the look of raw materials in many cases, I’ve seen unsealed surfaces that are no good when it comes to every day spills and these materials will soak up stains. While the builders may not rectify this it’s something that should be detailed at the time of purchase, specifically materials and finishes. Whatever assurances or inclusions are promised- get it in writing!

 

TIP: Agents need to make sure that the Strata & Building Managers know who is managing the apartment and ahead of any tenants moving in. They need contacts in order to resolve any issues.

 

  • …Competition

When a new building gets its final tick of approval, AKA an occupation certificate, new owners will rush to get their keys.

Then the individual properties will start to surface on the rental market and where the properties are all new and appearing online one after the other, pricing is everything.

Your pricing really will be based on how your property sits against the others. Is your floor plan more practical and spacious? Do you have a better aspect?

What I did in a recent situation was unashamedly attend the competitions inspections, being upfront about who I was of course to see where we sat compared to other properties and priced it accordingly.

Thinking as a tenant though, if you’re looking in a new building, you’re also likely to have a look at as many available properties as possible and they’re likely to have their pick based on preference.

 

TIP: If you’re paying for professional photography, have your photos watermarked with the agent’s logo- or it’ll be a free for all to use- at your expense.

 

Up Soon –  I’ll cover some General Tips for Strata Buyers

Property Management Volumes & Procrastination

4/4/2019

Speaking from experience I’ve always believed that these factors impact greatly on the service and delivery that clients and tenants experience within Property Management.

Maybe more broadly these are issues impacting so many other industries!

VOLUME:

I mean the number of properties that a Property Manager needs to have under their management in order for their position, and the business that they work within to be viable.

I was chatting with a tenant the other day and he was asking how business was going and how I was managing it, I said something along the lines of it going quite smoothly especially as I was now only managing just under 50 properties. They’re response was “ONLY!”, yes only. I’ve worked in offices managing up to 250 with minimal administration support.

Of course I want to slowly increase my portfolio but in a sustainable and manageable way and will max out at some stage where there’ll be a need for assistance. But get in while you can ;p

The numbers of properties that the majority of property managers have under their watch is simply too many. It’s already a mammoth task being organised enough to smoothly manage these figures but for so many property managers it can just take one situation occurring that sends everything else crashing down, and it’s the norm for unexpected situations to arise, Constantly.

Obviously, a business needs to be profitable but what do we see when volume is always running at its upper limits, we see Staff turnover, dissatisfied clients that go elsewhere and complaints. It also leaves no room for growth either.

As an investor, you really should find out how many properties your Property Manager has under their management, after all, what are you paying for when you can’t get a call or email response for 2-3 days.

What about the Staff turnover that this model creates, Property Managers burn out and when they do, they leave the industry or that particular office they take with them all of their knowledge about your property – information and knowledge that can’t be all included in a handover- where handovers are rare!

New recruits are not lining up to get into property management, let’s be honest, they either want to get into Real estate sales or stay away all together.

Procrastination:

2019 started off with a lot of online chatter about procrastination and how it really is the handbrake of progress and a real stressor to many people. We all do it, not just Property Managers but I’ve seen a lot of it in my time.

In Property Management I think much of the time, procrastination may just be a person that’s been non-stop busy, relishing whatever down time they can get and therefore just putting off tasks that are non-urgent. I can almost see the rational there but whatever that task is, it will continue to just get put off Until it becomes urgent and in property management- like many roles- we should be proactive instead of reactive.

Within Property Management though procrastinating a specific task turns a non-urgent issue into an urgent one quickly, simply because that proactive approach is needed.

Property Management is a stressful space and it’s deferring stress that leads to procrastination because we as humans worry about the short term.

Explained clearly in a New York Times article I recently read “Put simply; Dr. Pychyl and Dr. Sirois found that procrastination can be understood as “the primacy of short-term mood repair … over the longer-term pursuit of intended actions.” Put simply, procrastination is about being more focused on “the immediate urgency of managing negative moods” than getting on with the task, Dr. Sirois said.” A worthwhile read, the article can be found here.

Basically, a Good Property Manager needs to “Just do It” and get on with the tasks at hand.

So how do you know as a Landlord when choosing an agent, the service that you can expect:

-Ask.                     How many properties does your potential property manager look after? You need to know where you sit amongst a sea of properties and clients that they are managing.

-Observe.             How quick is the turnaround time for simple or even more involved enquiries and questions? If it’s slow, it doesn’t usually improve over time.

And Remember. The service that you receive is similar to that of which your tenant is going to experience, and we need tenants to be looked after!

The Right Landlords Insurance

8/3/2019

These days we insure everything and as a landlord it’s now seen as must to have a policy in place that covers you as a landlord, the choice of policies are endless which has made for some competitive pricing.

Did you know;

Many of the larger insurers, where we insure our home, cars, income and lives offer policies for landlords insurance that don’t cover for events such as accidental damage or what they sometimes refer to as a result of “Bad House keeping.”

Getting the right policy is not always clear but so important.

Claiming on your landlord’s insurance policy shouldn’t be and isn’t in my experience a regular occurrence but where a Bond can be consumed so quickly for Rent Arrears, Invoices, Damages and cleaning it’s a must have in place, if you as a landlord, do not wish to bear a financial loss when a tenant vacates your property or a typically insured event occurs.

Pursuing a tenant where a property has been damaged or the tenant has absconded can be a minefield, and most property managers can guide you through or facilitate that process, BUT, there’s only so far we can go.

Property Managers can get Tribunal issued orders and attempt to have those orders enforced via a local court or even a Debt recovery agency but those do Add on more costs in fee’s and charges which the landlord needs to cover until recovery or a successful insurance claim.

A better alternative is a thorough Landlords insurance policy (some costs less than $1.00 per day), believe me this is not an advertising situation as I can’t legally recommend any one Insurer but I can advise of several companies that give you a policy you can actually claim on when need be.

A Case Study:

A tenant had vacated the property leaving us with a small amount of rent owing, cleaning and repairs to walls which quickly consumed the rental bond. They’d also obviously been preparing food directly onto a New Marble Benchtop leaving knife marks across the marble surface. The Owner was not covered for what the insurer classed to be Bad Housekeeping and had to pay to rectify the damage. Despite enforcement orders and Listing this tenant on a database the owner did not recoup their loss.

This was a policy costing $900 per annum, Insurance from a Landlord Insurance specific provider would have provided coverage at a cost of $323.00 per annum and would have covered the cost of re polishing and surface protecting the marble.

It’s not all that hard to change and the cost savings should be motivation enough.

The take away advice here is get your current policy and check it twice and if you don’t have landlords insurance then get it!

What to look for?

You need to be covered for:
  • Loss of Rent
  • Hardship
  • Absconding
  • Failing to give vacant possession
  • Defaulting on Rent
  • Accidental & Malicious Damage
  • Theft
  • Pet Damage
  • Flood Damage
  • Death of a Tenant
  • Hardship
  • Fire
  • Storm / Water Damage
  • Legal Expenses
  • Liability
  • Drug Lab Clean Up (yes)
  • Loss and damage as a result of Domestic Violence

Most of the policies from specific Landlord Insurers cover all of these items above, whilst I can’t recommend you to one insurer for legal reasons, you can ask me for Brochures of several insurers that I have worked with in the past so you can make an informed decision.

In the end you’re paying for peace of mind and protecting yourself from potential financial hardship if you end up with unexpected costs and a property in a state that can’t be re let straight away.

LASTLY: There are several insurers that will only consider a policy as valid if there is a Fixed Term Tenancy in place. So if your tenants were on a continuing agreement you might be paying for a policy that will not pay you out because of this technicality. In this day and age where renting provides all with some flexibility these policies in my opinion don’t suit anyone and do not work for anyone. It’s unrealistic so I would recommend checking  your Insurers policy on this point.

Hope this has been of some help! Phew, there’s a lot I know!

Antonio

Tips on Preventing and Managing Mould

22/2/19

Property Managers fear it, tenants hate it and owners are usually just confused by it but it is unfortunately a part of life in many properties in Sydney so we have to talk about Mould.

Why it’s a thing, why it’s an issue and a serious sticking point when it comes to renting, managing it and who exactly is responsible. So here goes!

Despite the common belief that there is always an underlying building issue or source of its appearance in many cases it just isn’t so as many properties are susceptible to mould due to factors such as a lack of natural light and ventilation and allowing a property to be ventilated to outside is a big factor in allowing mould to grow and spread.

Mould’s organisms (part of the common fungi group) are airborne everywhere, indoors and outdoors. It is in moist and inadequately ventilated areas’ that inhibits its growth it thrives on moisture and organic material.

Another important note is that mould needs to be cleaned / killed as it appears but not just from walls, from clothing, glass and window frames really wherever it appears and thoroughly. It will otherwise continue to grow if the environment allows it to. All forms of mould have some potential to cause health problems.

The responsibility of a mould issue can be summarised by Landlords being required to address any dampness issue, i.e. a leak or water penetration issue that is causing the problem, however a tenant must ventilate the premises and is advised to clean mould as it appears.

There are ways in which mould can be managed and in a Residential Tenancy it does require some effort on the tenant’s part so here are some tips I’ve gathered from NSW Health, the office of fair trading, experience as well as other agents.

Some Important Points:

  • If not removed/ cleaned then mould will grow and spread. Mould can be removed using either a household bleach, specific mould cleaning product or wiping down the area with Vinegar.
  • The appearance of mould does not always indicate that there is an underlying issue i.e. a leak or water penetration issue.

How to Prevent Mould and Manage it

Allow and ensure proper ventilation as preventative meaning;

  • Ventilate areas to the outside, windows and doors whenever possible and practical
  • While drying clothes, either hanging or using a dryer, ensure you ventilate or do so in a cool area of the property to ensure less moisture is held in the air
  • Use any available exhaust fans or vents in bathrooms or laundry
  • Dry clothes and footwear thoroughly prior to storing them
  • Do not block any fan vents and keep free of any build up
  • Allow Sunlight into the home whenever possible by opening blinds during the day
  • Doors and windows should be open whenever practical, overnight condensation on windows should be allowed to dry or dried out where possible
  • Furniture and items should not be pushed up directly against the walls, as this creates dark airless areas allowing for mould to grow
  • Dehumidifiers do work when used, most agents or landlords will happily supply one when requested, they draw moisture out of the air in affected areas, they may not be a permanent solution but they do what ventilating would do when you can’t ventilate properly or securely

“Regular ventilation and cleaning of any mould that appears should prevent re occurrence”

Mould Removal Australia has kindly compiled a Fact Sheet on the prevention and treatment of mould, if you’d like a copy just send through an enquiry and i’ll send it over to you.

Hope this can somewhat dispel some theories and thoughts about Mould, let me know if you have any other thoughts or want to ready about any other issues. I’m all ears!

Oh & the Pic is actually Marble because… ewww Mould.

Antonio 🙂

My Take on the 2019 Rental Market

17/12/2018

This late in the year it’s now most likely that a lot of property owners, unfortunately, will be seeing their properties sit vacant over the Christmas period until significant numbers of prospective tenants hit the streets in mid-January and onward.

This is not from a lack of trying as seeing first hand, properties being offered with incentives such as rent-free periods and some significant rent reductions offering good value to tenants that are willing to move just before Christmas or start their year off with a pre-planned move. I’m also noticing properties listed for Lease with multiple agents, prospective tenants notice that too and sometimes find that a bit off putting.

Come 2019 several new high density developments are set for completion and continuing development will be adding onto an already constant and ample level of supply.

Tenants typically have the rental market in December but mid to late January and into February typically does see an increase in demand for properties.

My thoughts are that we’ll see a slower than usual January with only properties with the best offerings and value for tenants being snapped up first.

Predicted Growth Areas / The one’s to watch:

Several suburbs are being eyed as the ones to watch in 2019 for both an increase in rental demand and interest from investors, touching on a few of these areas where we manage property there are also other suburbs being closely watched on the North Shore, areas such as Brookvale and Millers Point.

-Eveleigh

+ Carriage works developments

+ Growing and evolving Commercial Technology Park with several notable occupants

+ Proximity to Arts / café scene i.e. Erskineville, Newtown & Redfern,

+ Ease of access to transport & the CBD

-Waterloo

+ New Apartments

+ Danks Street precinct

+ Metro / Train line under construction (Raglan & Cope Streets)

+ Proximity to CBD & Airport Access

-Maroubra

+ Affordability where compared to Coogee & Bondi

+ Beach side lifestyle

+ Gentrification continues

+ Access & infrastructure improvements in the works

-Breakfast Point

+ Walking Tracks, Parks on the Waterfront

+ Quality development of well designed communities

+ Easy Ferry commute along the Parramatta River

What do I see ahead for the New Year?

  • Amendments to the Residential Tenancies Act coming into place, read what this means for you in my Tenancy Reforms Blog Post. Changes will impact tenants, owners and agents alike and change the way many of us do business and what we as Agents and Owners offer to tenants
  • Reforms and changes to licensing rules and training requirements for Registered and Licensed Real Estate Agents
  • Very slight rent increases with more owners opting to secure and retain good tenants, owners will be more conscious of minimising vacancy and prioritising keeping their tenants’ content especially considering more flexibility for tenants to be able to Break their leases down the track and fluctuating vacancy rates
  • New rental supply from developments nearing completion in growth areas such as Mascot and Green Square which will see rents in these areas flatten out due to competition
  • Increase in Vacancy Rates due to new apartment development stock
  • Landlords holding onto their rental properties and holding back from selling where they can buffer for vacancy and rents that aren’t increasing
  • Influx of first home buyers which could spell and increase in investors as well as tenants moving to purchasing in a down Sydney market. A third of first home buyers are said to be rent-vesting instead of buying their first home.

And with certainty, much media hype about the doom and gloom of the Sydney Property Market so definitely a lot of attention will be focused there throughout the year. So in that regard nothing is unchanged from 2018 🙂

As the New Year and its cycle take us where they will, there’ll always be the need to navigate through new legislation, ensuring compliance and working through an ever-changing rental market and I’ll keep on blogging about it all.

Next year i’ll be bringing you some new blog posts regarding Depreciation Schedules, yields and return on investment and hope to have some guest bloggers on board from the world of finance and buyers’ agents in the New Year as well as well as some worthy content to my clients in my E-Newsletters.

What do you want to read about though?

If you have any suggestions as to what you’d like to read about in 2019 feel free to reach out, I am always open to thoughts and suggestions!

Best Wishes ahead of the festive season and thanks for your following this year 🙂

Antonio