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

Sydney Rental Market Update – November 2018

21/11/2018

Meet the Market, Instead of Testing It

Within the last week I’ve read conflicting reports about the state of Sydney’s rental market one quoting vacancy rates are down and the other stating the opposite. So what am I and fellow Property Managers seeing on the front line?

Amidst the doom and gloom of a weakening Auction Clearance rates and Median sales prices, for Property Managers of late it’s been business as usual when considering this time of year typically does slow down in terms of availability and lettings.

Looking at the Inner Sydney Market Vacancy rates:

November          2017 – 2.1%

August                2018 – 2.9%

September         2018 – 2.4%

And most recently October 2018 upwards to 2.8%.

So whilst this is a fluctuating market we are at the end of what is typically known as a property boom especially in the Sydney and Melbourne markets.

Despite all of the negative media attention (doom & gloom) I remain quite positive about the assets we manage within Sydney.
There is always a fair bit of hype surrounding vacancy rates but look at the supply that’s coming to the rental market but remembering that the type of supply is not typically suited to all. We still have tenants wanting character filled terraces and art-deco style apartments over new, off the plan high density housing.

Speaking with other Property Managers they feel that properties that good quality properties with attractive features are leasing and especially where the rents reflect the market.

In terms of rents I personally haven’t carried out any increases or tested the market when re letting simply because the market isn’t reflecting an increase. In these cases, it’s seen that minimising vacancy is the highest priority with clients wanting to meet the market instead of testing it. From my conversations with other agents, many are not reviewing or recommending rent increases for current tenancies.

In many cases, first hand and as discussed with other Property Managers, properties can take a week or two longer to lease but it’s not all about dropping rents. Investors can still thrive in this market where logical decisions are being made and the agent does all that they can to ensure every opportunity has been explored.

Just as it is in the sales market, it’s not all about putting a property on the market and opening the door, agents must work harder and go out of their way to achieve results.

A good test of the Sydney rental market and vacancy rates will be in the New Year where rental properties are typically in higher demand, we just need to get through the festive season and later judge if 2019 can bring about any rent increases, otherwise it might be best not to rock the boat.

What should you expect from a Property Manager

8/11/2018

I was going to include this in my FAQ recent post which can be found here, but the answer became a bit drawn out, hence why it gets its own post.

When it comes to Property Managers it’s safe to say that a lot of Owners and Tenants have unfortunately low expectations, preparing them for lessened or expected disappointment when things go wrong and because of this we have an industry with transient clients, constantly changing Property Management providers.

Low expectations can also make exceeding expectations an easier task for Property Managers, do standards therefore decline?

So what are some of the expectations that you should have of your Property Manager, quite simple and basic in my opinion especially when considering that Property Management is essentially a service providing industry.

A Good Working Relationship

Whilst you’re not interviewing for your future best friend, you need to be able to communicate openly and honestly with your Property Manager and be well aligned in your aim and how you want your property managed. Make your preferences clear from the outset and gage the Property Managers willingness to deliver.

– Honest and Open Communication

– Develop Rapport and an Understanding

Experience

Whilst everyone must start somewhere, at the very least a Property Manager should have experience in managing their own assigned portfolio of properties. You ideally want someone that’s been in the industry long enough to know their market and has been around long enough to have experienced some of the pitfalls first hand, it isn’t always smooth sailing. In essence, expect that the Property Manager knows what they’re doing and when an enquiry or issue arises that they know how to respond to it and handle it.

– Tried and Tested on the Job Experience

– Knowledgeable in their field

Attention to Detail

Necessary for Property Managers throughout their role, Property Managers need to be across a lot of detail. From thorough inspections and reporting you want someone who can point out possible repercussions and therefore be proactive in preventing issues whether they be short or long term. As an owner or a tenant, you’re unlikely to know all of the ins and outs so having an adviser on all matters demonstrates their level of experience, attention to detail and communication skills.

– Proactive approach

– Detailed and specific reporting

Communication

A significant complaint I’ve heard from Owners and Tenants is a lack of communication, and it’s the most significant sticking point for many. Not replying to phone calls or emails in a timely manner, or at all in some cases, cannot be seen as acceptable in a service providing industry. You should expect effective communication and in a timely manner, anything less builds frustration and resentment. A lot of the time my clients and tenants just want to hear something, even if I have nothing ground breaking to report on a particular issue at least they know that I’m onto it, haven’t forgotten about or provide whatever update I have which doesn’t leave people wondering what is going on.

A lack of communication can be attributed to time poor Property managers or those who don’t have time management skills and that can mean a lack of organisation – another must have attribute for someone managing many properties and a wide-ranging list of daily activities.

– Highly Organised

– Regular and timely Communication

Time and Time Management Skills

Is it that they’re busy because of a heavy work load from a large portfolio or a simple lack of support? In the end a Property needs time devoted to it if it’s to be effectively managed. That means inspections, communication and coordination. If your property and its needs aren’t given time then small issues become significant ones. So, while delays in getting issues resolved can happen you can expect that they shouldn’t be caused by your Property Manager but more so followed up and pushed along by them.

– Responsive and timely communication

– Available to deal with enquiries

Knowledge of the Act and Updates to Legislation

Thorough, up to date and ongoing education is a must in this field, with the Residential Tenancies Act being reviewed every five years as well as regular regulation changes it can’t be up to an Owner or Tenant to keep abreast of all the changes that are relevant to them. It is a Property Managers role to ensure that all activity related to Owners, Tenants and the agreements in place are compliant and to pass on relevant education to owners and tenants so that all parties are in the know and ensuring they’ve taken appropriate steps towards being compliant as well.

– Communicating and sharing of relevant updates

– Continuing educating of themselves and therefore clients and tenants where relevant

Problem Solving Skills

Within reason expect that when there is a problem that you’ll be given some solutions or at the least some options that will lead to a solution. A Property Manager should always be focused on a resolution and not solely dwelling on the issue, where seeking instructions a Property Manager should offer suggestions or guidance and not simply be a messenger requesting instruction but actively take part in the Problem solving.

– Provide realistic and practical options towards solutions

– Focus on the Solution not the Problem

 People and Listening Skills

Whilst it’s a Property Industry it’s even more so a people industry, when working with people’s properties and tenants homes some level of emotion and attachment is ultimately involved. People need to be treated with respect, empathy and courtesy so you want someone that will take care of a property but more so the people residing in it and clients.

– Active Listening i.e. Concentrating on what is being said, not passively hearing

– Acknowledging and Accepting of feedback and taking it on board

 

So how do you find a Property Manager that will meet your expectations?

The most helpful way is to ask for honest opinions and recommendations from family, friends or colleagues.

Failing that, do your research and find a Property Manager that suits your needs and can deliver on your brief, once you have short listed a few, meet with them individually and ask questions. Find out how many properties they manage, is the Director Involved in Property Management and do they have support and backing of a team.

Meet with the person that will be managing your property on the front line and use your intuition as well.

Lay out your expectations so you can be given some assurance that they can be met, a good property manager will tell you honestly if your expectations or instructions are not realistic or inline with proper practice, they should be able to communicate effectively and therefore not be afraid of raising concerns or having a difficult conversation.

Remember that it’s preferable to be aiming for a working relationship that is hassle free and enduring, in the long term you’re best off having the same person across all aspects on your Investment’s management as that person becomes familiar with your property as well as your goals and the way in which you want things done.

To Summarise:

Property Managers are, at no fault of their own, sometimes handed a large portfolio of Properties to manage and it’s not unusual for one Property Manager to oversee the management of 200 Properties. If that portfolio is not being managed well or is a difficult portfolio that needs a lot of work then the service provided will reflect this and the efficiency needed will not be there.

While I firmly believe the expectations, I’ve listed are reasonable in some cases, Property Managers generally need to be cut some slack. It’s a tough role and it’s not for everyone so make sure you find the right one and then hold onto them.

You’ll be made a lot of Promises as either a tenant or owner, when these are met you’ll know you’re onto a good thing.

10 Potential and Common Questions and Owner Might have, answered

18/10/2018

  1. Should I pay additional costs for Professional photography when marketing my property?

Professional Photography is being highly used across most advertised rental properties nowadays and it’s a worthwhile investment. A set of professional photos shows your property in the best light and makes your marketing present in line with the majority of properties listed. Have a scroll through domain.com.au or realestate.com.au and you’ll see some really poor photography that won’t get potential tenants through the door. Photos can generally be reused several times if the property remains in the same state.

 

  1. How much vacancy is there usually between tenancies?

This always depends on supply and demand but good planning and best practice should have your agent planning and allowing a minimum of 2-3 business days in between any tenancies. This ensures there is time for a final inspection, any cleaning or necessary repairs to be carried out to ensure your property is ready to start your next tenancy on the right footing.

 

  1. Do I really need landlords Insurance?

Put simply, Yes! Just like you ideally wouldn’t drive your car without insurance the same goes for an investment property. The bond can be consumed so quickly with rent, cleaning and damage whether it be accidental or malicious.

Landlords insurance can equate to as little as $1 per day. My recommendation is to always go with a specialist Landlord Insurance provider.

 

  1. Every agent recommends Annual Smoke Alarm servicing, is this a must?

It is highly recommended because it properly documents that you have taken steps to be compliant in ensuring a working smoke alarm is fitted. Outsourcing this to a professional for a small fee of $99.00 is paying for peace of mind as you are issued with a certificate of compliance and the annual fee covers as many call outs as necessary throughout the year.

 

  1. What do agents mean when they offer “Portal” or online access to information?

This means an owner & tenant for that matter has 24/7 access to their statements, access to any invoices and can check things like, the lease expiry, balance of rent held and where their tenant is paid up to.

Landlords also have access to see any maintenance that is pending or completed.

The portal I utilise also displays past inspection reports and anything I feel is important to share with clients. It also gives tenants access to receipts, shows them where they’re up to and next due.

 

  1. Should I have my agent pay my outgoings, such as council rates, water rates etc?

This completely depends on your financial position as an agent will pay any invoices as they come in, from your rental income. It takes the onus off the owner. A major benefit is that at the end of the financial year all of your Income and expenditure is captured in a statement that your accountant can decipher in minutes, so for that it is worthwhile. Plus, it is one part of the service that agents offer inclusive of the management fee.

 

  1. Can I see my property during a tenancy?

Why not, if anything I’ve always thought it’s a good idea from time to time for an owner to see their property first hand with the agent present to discuss maintenance and/or to establish a maintenance plan, in order to maintain the property and its market value.

Tenants don’t seem to mind as long as the appropriate notice is given and it’s also a good opportunity to catch up with your agent.

 

8. How do I change agents when my Property is tenanted?

For the landlord it should be a simple as some paperwork.

The newly appointed agent will oversee the changeover process in contacting the tenant and liaising with the previous agent to collect everything all the necessary paperwork in relation to the property.

 

  1. Does changing Agents during a tenancy impact or inconvenience my tenants?

No, the only real change for tenants is who their new point of contact is and where they pay their rent to. Aside from that an inspection should be carried out for the new agent to familiarise themselves with the property and an opportunity for the agent to meet the tenant.

 

  1. Is using an Agents trades person the way to go for maintenance?

In most cases the agent will have a set of tried and tested contacts for repairs, maintenance and improvements. These tradespeople value their working relationships with an agent and it is in their best interest to ensure that a job is done effectively and efficiently.

Unless you have your own contacts then outsourcing the management of repairs and maintenance to your agent, on your instruction, is the most efficient way as the agent will keep records such as warranties and document details regarding the history of completed maintenance for your property.

If I’ve missed something you’re curious to know – as always feel free to reach out.

Tenant’s Questions Answered coming soon!

EIGHT FEATURES THAT WILL BOOST THE RENTAL RETURN OF YOUR PROPERTY

9/10/2018

Considering that Sydney experienced some unusually high vacancy rates over the past 3 Months I can say first hand that savvy tenants have had their pick of properties, locations and the amenities on offer.

In good news though, things have picked up over recent weeks with properties being tenanted quickly but it’s got a lot of Property Owners thinking and planning ahead to make sure they’re well placed ahead or amongst of the competition down the track.

We all know renovations and improvements don’t happen overnight so planning ahead or at the least keeping in mind that new kitchen down the track is something owners can do to prepare for reletting their property next time around.

I’d add to Kate Farrellys’ article below is, but maybe it’s a given that, there’s nothing like a fresh coat of paint!

”It’s never been more important for investors to understand which features deliver the best rental return” writes Kate Farrelly for Domain.

  1. Generous outdoor space

For Castran Gilbert BDM Andrew Rowland, big courtyards and balconies – those measuring 20 square metres or more – are paying dividends for investors.

In recent weeks he fielded above-average interest in a Mordialloc (Victoria) ground-floor apartment with a 25-square-metre courtyard on title. It leased at the asking price ahead of three upper-storey apartments in the same block, which are still on the market.

“Tenants are willing to pay a good amount more to have a good courtyard, particularly if they can have pets there. People go nuts for a big courtyard,” reports Andrew Rowland. A large private outdoor area will always appeal to tenants, who will pay a premium for such space.

  1. Pet-friendly

Michael Matusik, independent housing market analyst and director of Matusik Property Insights, says investors can achieve a rental premium of up to 20 %  for a pet-friendly apartment.

“Being able to have a small dog or certain animals is a real plus in the rental market,” he says, pointing out that owners who would otherwise be forced to give up their pet are often happy to pay extra rent to keep their animal.

My own experience shows there is more and more demand for pet-friendly places.

  1. Ample storage space

We find that a storage cage is an important feature with new apartments, as they sometimes lack internal storage – a cage allows for the storage of large items such as spare furniture, bikes, etcetera. Downsizers frequently have overflow belongings requiring storage, as do those with sporting equipment such as golf clubs and skis.

  1. Secure parking

Drive-in, secure parking is a definite plus for tenants.  Tenants prefer the ease and security of their own parking space and will pay extra rent for one or two spaces. It’s best to steer clear of stackers and car lifts, which might offer off-street parking in busy areas but can be a big turn-off for (particularly older) tenants.

  1. A nod to current trends

Timber floors are really popular, but if not then new carpeting is a major plus for tenants. Let’s add staying away from some trends! Think long term.

  1. A pleasant outlook and a northern aspect

While not everyone can afford a new apartment with a water or city skyline view, our experts agree you’ll always attract a better rental return if your property has a pleasant outlook from the living spaces and balcony.

“Tenants want to feel a sense of space, to see some sky, to see some trees. They don’t just want to look at a wall or panes of frosted glass,” states Andrew Rowland. We find many tenants look for apartments with a northerly aspect to maximise light and sunshine, and in the absence of these features the property can have a longer vacancy and a lower return.

  1. A size to match the demographic

“The returns are absolutely better on one-bedders in the inner-ring suburbs close to the city,” says Melbourne-based Rowland. “But once you get to the middle ring, two-bedders take over.”

Michael Matusik says one-bedders deliver high returns in locations where they attract premium professional tenants, giving the example of a doctor wanting to live close to a hospital. But elsewhere, Matusik says, apartments with two bedrooms and two bathrooms that allow share households generally deliver the best rental dollars.

  1. Location location location

Of course, real estate’s golden rule of location remains critical for securing a top rental return.

And when it comes to apartment living, Matusik says the increased density needs to be offset by quality outdoor and lifestyle amenities. “You’re trading your inside space for your outside space,” he says. “So, you need to ask the question: Can I go for a run, can I walk the dog, are there decent restaurants and coffee shops nearby?”  Matusik reports apartments within a five to 10-minute walk of transport will attract a higher rent, as will properties within walking distance of employment hubs, the beach and thriving shopping districts.

Source: Domain.com.au Article by Kate Farrelly

Updates Below: Tenancy Reforms, change is on the way!

Update: 4/12/2018  2019 Residential Tenancy Act: Stages & Timing

A recent update by the Real Estate Institute of NSW indicates that the reforms will be rolled out in two stages in 2019. Exact commencement dates of the new legislation hasn’t been announced as yet but will be sure to keep this updated. The below outline from the REINSW gives some approximate timing and the stages in which the changes will come into effect.

The stages ahead and timing

The anticipated approach is that the changes will be tackled in two stages:

1)      Stage 1: Domestic violence related reforms (this would include a declaration form in the schedule to the Regulations)

2)      Stage 2: Remaining reforms.

Stage 1

NSW Fair Trading are looking to commence stage 1 prior to March 2019. This means that targeted consultation will occur over the coming weeks on the declaration form which has been issued to REINSW (the rest of the domestic violence changes are reflected in the Act). REINSW Legal Counsel and the RTA Sub-Committee have held their first meeting to discuss the declaration form and its content, and REINSW will be lodging a Submission on the declaration form by 28 November 2018.

Stage 2

NSW Fair Trading are looking to implement stage 2 later next year. NSW Fair Trading have informed REINSW that formal consultation on the stage 2 reforms is not planned to occur until after March 2019.

In any case I’m assured that the REINSW will be keeping their members in the loop which I will then update here.

Thanks for following, Antonio

Update: 30/10/2018

Having attended an Information Session today held by the Real Estate Institute of NSW on the Residential Tenancies Act it appears changes are imminent.

What has arisen out of the reforms are definite changes, though alot of detail and “grey areas” are needing further clarification. The vast majority of these changes are not retrospective.

So what do we know for sure:

  • Changes to Break Lease Fee’s are set out to a one off fee dependant of the time period lapsed of a fixed term agreement
  • Changes to way in which Tenancies subject to circumstances of Domestic Violence are treated and finalised
  • Rent Increases in a Periodic Agreement limited to once in every calendar year
  • Landlords will be required to complete an information statement that confirms they are aware of their rights and obligations before a Tenancy Agreement is entered into
  • Smoke Alarm issues and repairs will be deemed an Urgent Repair
  • Landlords will have other obligations to meet as to Standards surrounding being fit for habitation an example being adequate power points in each room
  • Properties that are not separately metered for utilities incl. water can not have charges passed onto tenants; An example being that Granny flats and some duplexes will not be able to charge water usage to tenants where the meter isn’t read separately by the water board
  • A prescribed list will be drawn up to clear up what “reasonable” Alterations to a premises are, therefore allowing tenants to make set out alterations but permission must be sought in any case

So more to come on this as well and more changes as I’ve heard much discussion about reviews surrounding Rental Bonds and what will be some clarity around Mould and Responsibilities.

What I do look forward to, is a transition towards Real Estate becoming recognised as a Profession which is currently being lobbied. This could see the creation of a Real Estate specific commissioner overseeing the industry instead of Real Estate coming under the NSW Fair Trading umbrella. This set of Professional Standards is likely to come about in 2019 following on from reform and changes surrounding Real Estate Agent Licensing and changes to Continuing Professional Development which is being set out at the moment.

What will that mean, Real Estate Agents will have a much higher standard of training and licensing entry into Real Estate roles.

For the time being, all remains the same while the Residential Tenancy Acts’ new set of Regulations is drawn up.

Interesting times as always to be a Property Manager but also a Landlord or Tenant and not only is there much work to be done on these and further reforms, there is a great need for Education across the Property Management and more widely the Real Estate Sectors and this education must then be passed onto Landlords and Tenants who all have a vested interest in this space.

That’s what I plan to continue doing with both my blog and down the track newsletters, sharing valuable and relevant information. I also plan to do this one on one with my Owners and Tenants so that everyone knows where they stand and in turn add value to everyone’s experience with The Management Agency.

I appreciate you following these updates and am sure there will be much more to come!

With Thanks,
Antonio

 

Updated: 18/10/2018

Reforms Passed

Reforms to the Residential Tenancies Act have passed without amendment, according to the Real Estate Institute of New South Wales.

These major changes affect the real estate industry, landlords & tenants.

REINSW President Leanne Pilkington said the Residential Tenancies Amendment (Review) Bill 2018 has passed and REINSW is now commencing the first phase of educating the property management community.

“It is important for our profession to understand all of the changes that the new Bill includes. We will be conducting intensive Training Sessions in 17 locations across the state beginning in Sydney next Thursday 25 October and runinng to 29 November 2018.

“The second phase will follow the release of the Regulation, which are the guidelines that dictate how the act should be applied.

“REINSW with the support of the REINSW Property Management Chapter Committee and a dedicated Sub-Committee which formed in June 2015, worked tirelessly to specifically identify those areas in the current legislation requiring reform.”

Ms Pilkington said while many of our lobbying efforts have been adopted in whole or part by the Government, a lot have been ignored, such as the Government’s proposed changes to:

  • Alterations to property
  • Break fees
  • Domestic violence
  • Rent increases, and more.

The bill will now be sent to the Governor of NSW for his assent. A date for the reforms to be implemented is yet to be disclosed.

I will be attending an REINSW session covering the reforms in Late October so more details to come!

 

Original Post: 26/09/2018

The NSW Rental market is constantly changing and growing, more than 820,000 households live in a rental property and the demand continues to grow with more and more people renting and renting for a longer period of time.

Yes, we’re heavily governed by the Property Stock and Business Agents ACT (PSBA) and the Residential Tenancies Act (RTA) and we need to be considering how many people live in rented premises and rent out their properties.

Under section 227, the Residential Tenancies Act must be reviewed every 5 years to determine whether or not the objectives and terms remain valid and appropriate. This current review process started back in 2015 and is now finally being debated this week in NSW Parliament.

Much is being said in the media about what is and what isn’t up for discussion.

There seems to be some certain changes in regards to:

  • The ability for tenants to make minor alterations to properties.
  • The introduction of a new minimum standard for properties.
  • The ability for tenants to get rectification orders from Fair Trading for repairs.
  • Restricting rent increases for periodic leases to once a year.
  • The ability for victims of domestic violence to break a lease without incurring a penalty.

The biggest debate stems around “No Ground Termination Notices” and the large majority of people that want to see the ability for landlords to terminate on No Grounds gone all together.

Some years back the notice period was increased from 60 Days to 90 Days and tenants are allowed to leave at any time within the notice period without giving counter notice. That took some time to register with landlords but has always worked well, it’s given tenants ample time to find a new home and the flexibility to secure it.

It’s unfortunate that issuing a Termination notice is being viewed as retaliatory where in most cases the owner genuinely needs their property back, to live in, to renovate, to sell.

All in all, there are some good changes that will help our many tenants make themselves at home and give them some certainty.

It does appear that Owners’ will be left with less certainty if tenant’s will able to break their leases with smaller penalties leaving them open to vacancy, re letting costs etc. No one seems to be all that sympathetic though.

It doesn’t seem that any changes will occur to No Grounds Notices at this Review, but who knows, the next review is only two years away!

All I know is that as an owner or tenant if you can’t keep up with all of this, you’ll soon find out how valuable your agent is because it’s on us to know! I’m waiting for the final bill to pass and will then get reading 😊

Here’s a comprehensive list of what the reforms include:

Under the Residential Tenancies Amendment (Review) Bill 2018, the government’s proposed changes to rental reforms in NSW include:

  • If the property is in a strata scheme, the landlord or landlord’s agent needs to pass on a copy of the by-laws before the tenant enters into a residential tenancy agreement.
  • The creation of an offense for a landlord or landlord’s agent if they pass on a completed condition report to the tenant after the signing of the residential tenancy agreement, with a maximum penalty of $2,200.
  • The creation of an offence for a landlord or landlord’s agent if they do not sign an acknowledgement on a residential tenancy agreement, or if a landlord’s agent fails to sign the acknowledgement of the residential tenancy agreement without a statement from the landlord in writing that the landlord has read and understood a rights and obligations information statement.
  • If rent is paid via cheque, receipts are allowed to be sent to the email address of the tenant.
  • Requirements for rent increases do not apply to fixed terms less than two years that specify when, and the amount by, the rent is increased.
  • Rents paid in a periodic agreement are not allowed to be raised more than once a year.
  • New minimum standards for properties have been introduced, which include:
    • basic access to electricity and gas;
    • structurally sound buildings;
    • adequate natural or artificial lighting as well as ventilation; and
    • adequate outlets for lighting, heating and appliances.
  • Liability for damage to properties caused by someone else is not imposed on a tenant, or co-tenant, if a domestic violence offence is involved with the co-tenant.
  • Landlords can have access to premises without the tenant’s consent to take photos or visual recordings of the interior to advertise the property for sale once in a 28-day period, as long as reasonable notice is given and must not include tenants’ possessions in photos or footage.
  • Only landlords can carry out repairs to smoke alarms, with the exception of certain kinds of smoke alarms, with a maximum penalty of $2,200 for failing to repair.
  • In matters involving a Tribunal about repairs, more consideration is given to time frames and reasonable diligence.
  • Tenants who require urgent repairs can get rectification orders from Fair Trading.
  • Landlords will not be able to unreasonably refuse minor alterations, such as picture hooks.
  • The termination of an employee or caretaker residential tenancy agreement cannot be earlier than 28 days after the notice to terminate was given.
  • The termination of other fixed-term tenancies must be on or after the end of the fixed term and no earlier than 30 days after the notice to terminate was given.
  • The termination of periodic tenancies must be no earlier than 90 days after the day the notice was given.
  • Landlords cannot give a termination notice to a tenant solely because of their failure to pay rent, water, electricity, gas or oil charges unless the charge has not been paid for at least 14 days.
  • In matters involving a Tribunal about the termination of a tenancy due to unpaid water charges, the termination is only valid if the landlord has requested payment from the tenant within three months of the bill’s issue.
  • Tenants may give a termination notice if they enter into an agreement by misleading statements that are proven to be concealing certain facts.
  • Tenants may give a termination notice if the property is included on the loose-fill asbestos insulation register during or before the commencement of the tenancy without informing the tenant.
  • Te/ants or co-tenants can give a domestic violence termination notice without any penalty if they are a victim of domestic violence, which is defined as:
    • The tenant or co-tenant being a victim of a domestic violence offence where the offender was declared guilty during the tenancy.
    • The tenant or co-tenant has the protection of an active DVO.
    • The tenant or co-tenant is protected against family violence by a domestic violence offender.
    • The tenant or co-tenant has been declared by a competent person to be a victim of domestic violence.
  • The break fee for fixed-term agreements less than or equal to three years is dependent on the percentage of how much of the fixed term has expired:
    • less than 25 per cent: 4 week’s rent;
    • 25 per cent to less than 50 per cent: 3 week’s rent;
    • 50 per cent to less than 75 per cent: 2 week’s rent; or
    • 75 per cent to 100 per cent: 1 week’s rent;
  • The creation of an offence for when a landlord or a landlord’s agent lists a tenant or co-tenant’s personal information in a residential tenancy database if the tenant or co-tenant terminated a tenancy due to domestic violence, with a maximum penalty of $2,200.
  • The creation of an offence for database operators to charge fees for giving copies of personal information in a residential tenancy database to that person.

How to live peacefully in Strata Complexes

13/9/2018

Apartment Supply coming to the Sydney and Melbourne markets was detailed in a recent report compiled by David Scutt in the Business Insider.

-The number of units in Australia could increase by 10% over the next two years according to analysis by CoreLogic

-61.8% of this expected increase in supply is to be absorbed by just Sydney & Melbourne

-Over the next 12 months and additional 94,000 new units will be completed nationally!

Against these figures, supply may well meet demand whereas for years it’s been more demand than supply. Not necessarily true of all suburbs though where there will always be more demand for the same levels of supply such as Sydney’s eastern suburbs.

What this obviously means is that a large proportion of the population will be living in Strata complexes, so how can everyone ensure they’re By-Law given rights to quiet enjoyment of their premises? Well it’s a challenge for many and as a Property Manager we can see first hand the issues that it can present.

I would safely say that most issues that arise within Strata complexes involve, noise, parking & smoking. Some complaints escalate quickly it’s not always easy to find middle ground so where ongoing disputes are involved it can make for a pretty uncomfortable living situation.

A Strata complex should have a set and clear set of By-Laws in place and hopefully an effective Strata Management Agency involved, and there are some good ones.

So how can everyone get along when you have so many people, personalities and even routines living in such close quarters?

Everyone needs to pay their part really so here’s some tips to Strata Living having been there myself and having managed many issues in Strata complexes in my time.

-Flexibility; Everyone needs to give a little and make allowances, the occasional party and differing personalities need to be handled delicately at times. Listen and be flexible, usually an issue is just a passing one that can be dealt with and moved on from once resolved.

Awareness; know your Strata rules and By-Laws so you know your rights but also your responsibilities, remembering that these rules apply to all in the complex so all are equals!

-Get involved; Many people couldn’t be bribed into attending a Strata meeting but if you want action, change or improvement you’ll need to grit your teeth and get in there. Be heard and make your vote count. If the building needs maintenance then report it, it is your home.

Respect; common property is owned and shared by all so seek approvals to use common property and always be mindful of others when in common property. Creating a nice building community is as simple as saying hi or a smile when checking the mail.

-Talk; If there’s a problem then talk about it with your neighbour(s), people don’t always know what they’re doing wrong so a simple conversation helps to alert others nicely without the need to escalate an issue and without you letting it fester and build frustration.

Whilst I relate all of these tips to common sense I think it’s an appropriate reminder that if you’re going to live in a Strata complex that you need to be open minded, every Strata complex will have a different make up of demographics and personalities all there for their for their own specific reasons but one commonality is the desire to peacefully enjoy their home and that’s everyone’s basic right.

Trouble free tenancies – 5 Tips on How to be a Great Landlord and Tenant!

13/8/2018

Being a great landlord and tenant makes for a smooth-running relationship, a longer lasting and a mutually beneficial tenancy.

There are many ways in which tenancies can turn out to be a less than desirable arrangement for landlords and tenants, assuming that there is an experienced Property Management Specialist in place then a lot of issues can either be prevented or swiftly resolved. Following our tips below is at the least, a great start!

Think of it as Teamwork.

  1. Communicate!

This one is key and it all comes back to this.

Always keep the lines of communication open in all situations regardless of whether or not there are updates on a situation. No one likes to feel as though they’ve been forgotten and It’s always best that all parties are in the know. Don’t be so hard to reach which keeps others waiting and for anything important make sure it’s in writing.

  1. Be Reliable and Accountable

Do what you say you’re going to do and be open and honest if you can’t stick to any arrangement and be accountable for any repercussions. People will always have a good feeling about someone that they can rely on and owns up to any shortcomings – we all have those.

  1. Be Organised

In so many ways we need to be organised, keeping appointments, keeping records in order and knowing when and what is due. It’s important as an Owner or Tenant to be as organised as possible, have a system in place as these days it’s necessary.

  1. Be Professional

Some informal banter and chat don’t take away from this but it’s always best to keep professional relationships, just that. Tone down on “tone”, swearing and attitude. It is not compatible with problem solving to be aggressive or unprofessional.

  1. Don’t Delay (unnecessarily)

Yes, No, Maybe. Sometimes tough calls need to be made and some don’t need delaying. If there are a few invested parties try not to be the one who delays if you can help it. Sometimes quick decisions need to be made and sometimes those are the best ones.

 

Also, necessary. Being compassionate in a working relationship can mean understanding that people fall on tough times, owners may not always be in a position to act on non-urgent maintenance and tenants can have unforeseen delays with being paid and therefore paying rent. A level of understanding and compassion can go a long way towards building good working relationships.

It all comes down to communication which allows for good working relationships and having a Property Manager in place should help and not hinder this, dependant on how effective a communicator they are. It is in the challenging times that you’ll be able to tell.

Research suggests Private Rental Growth is not all positive

3/8/2018

With an Increase in Private Rentals, why employ or rent via a Property Manager?

According to a recent report carried out by the Australian Housing and Urban Research Institute the private rental sector between 2006 to 2016 has grown by 38%, meaning that more than 2 million Australian households are rented/managed privately.

It is predicted that this rapid growth is set to continue with the increasing number of Owners and Tenants using online platforms to either secure tenants or to rent a property. Portals such as Facebook are making it easier for people to line up these informal arrangements.

The report also finds that this is having an effect on the market by inflating prices on the “room rental market” where the private rental market was traditionally seen as a more affordable option.

Owners and Tenants should be aware that these portals and apps do not do a lot for the protection of user’s rights as they appear to be, for the most part unregulated.

Real Estate Agents are bound by the Residential Tenancies Act that sets out regulatory protection for all parties involved, whereas the alternatives such as Rental Bidding App’s allow for increased competition in the Private rental market which leads to people being priced out of the market.

So why should Owners and Tenants use a Property Manager?

Tenants:

  • You have a legally binding Tenancy Agreement governed by the Residential Tenancies Act in place providing you protection of your rights
  • You are issued with a condition report documenting the state of the property you are moving into and are given an opportunity to document any discrepancies
  • Your rental payment history is recorded with receipts and ledgers
  • Ensures that your bond monies are appropriately lodged and safe guarded
  • Be issued with a rental reference at the end of your tenancy from a reputable agency which will come in handy down the track and particularly when looking for a new home as a reference from an agent carries more weight than one from a private landlord
  • Ensure that you have avenues to have urgent repairs dealt with and that any other issues are addressed promptly, professionally and in accordance with the Tenancies Act

Owners:

  • You have a legally binding Lease Agreement governed by the Residential Tenancies Act in place providing you with protection of your rights and awareness of your responsibilities
  • Your properties condition is thoroughly documented before, during and at the end of each tenancy
  • Your financials are recorded, documented and reported therefore making financial tracking and end of financial year tax assessments seamless
  • An agent ensures that you are compliant in all of your obligations under the Tenancies Act and further ensures that the tenant is fulfilling their responsibilities – An agent should be educating their Owners and Tenants as to their respective obligations
  • Outsourcing the day to day management to a Property Manager eliminates lost time and much stress to Owners

There is much more involved in the renting process beyond these points listed and a lot of what Property Managers do cannot all be listed here.

Regulations are constantly reviewed and changes are regularly implemented. A licensed and experienced property manager is required to keep up to date with all ongoing changes to legislation.

A Private Owner, or Tenant for that matter, can find this all difficult to navigate and in unregulated territory Owners and Tenants do leave themselves vulnerable.

 

I suspect that in the Private rental market, a lot of what is Best Practice to most Property Managers’ may be missing. Having a Property Manager in place ensures that Owners and Tenants clearly know where they stand and acts as a mutual point of contact for all parties.

For Owners and Tenants there is a lot of risk and uncertainty  that is eliminated when you employ a Property Manager, well a good one!

What to do when your property is sitting vacant

24/7/2018

With all this talk  and truth behind Sydney Vacancy rates, we look at what property owners and agents should be doing to get prospective tenants through their doors.

Settle in this might be a long one!

Every Property Manager and Property Owner, I’d expect, will start getting a little anxious at some point when the weeks and open for inspections are passing by and a property still is not leasing or in some cases, not even attracting prospective tenants to turn up, let alone apply for the property.

This is always a bit of a tense time. The property is not bringing its owner in any income and therefore the agency isn’t collecting any fee’s either.

How this period is handled though on the agencies part can decide though how long the property owner will stick with their current agent. If the relationship has already been fraught with other issues then this could be the deal breaker if the agent is not being as proactive as possible, making the right recommendations and genuinely trying to “sell” the listing as best possible.

Basically, it’s time for the agent to work to secure your business.

Property owners rely on the agent to pass on feedback and make these recommendations but if time is passing and there haven’t been many people through the property or any applicants then someone needs to get proactive, owners get involved or ask your agent to if they’re not already across this.

Let’s be positive and seize some opportunity with my:

5 P’s to get Prospective Tenants through your door.

Presence

There is always room for improvement, check over all of the details, text and photos of your online advertising. The key being to Rewrite and refresh headings and text to make sure it flows and is clear to prospective tenants.

Photography

If you’re photos are dark, unaligned or you’re reusing obviously old photos then it’s time for a photo shoot. Professional photography is a great investment, inexpensive and keeps your ad in line with the majority. Done well they can be reused for some time. If professional photography is not an option then your own photos will do but check them and check them again, making sure the lighting is right and you’ve included your properties best features. Leave out anything that’s unnecessary and it also helps to ensure the order is appropriate e.g.) Bathrooms should not be the first and feature photo!

Placement

If your property has been sitting online for some weeks then your placement online has likely dropped well below any new listings and it’s likely the Ad itself has shrunken to a smaller listing when searching by area and amenity. Sometimes it’s worthwhile paying to upgrade your listing with domain.com.au and realestate.com.au. A small investment to get your, once refreshed, Ad back in the game and to get prospective tenants to click on your property.

 Property Presentation

Your property is vacant so something that’s not an issue is gaining access! If your property is sticking on the market then as an owner it’s an opportune time to go and inspect it, take your spare keys, collect the agents copy or meet the agent there. Now is the time to add value, and by adding value I mean adding to give value to prospective tenants. Have a walk through as a prospective tenant would view the property and attend to anything that needs maintaining. Think of it as an opportunity (however inconvenient the timing) to refresh, improve and update.

An important part of presentation is how your property is shown and by that, I mean the bare minimum should be being carried out by the agent showing your property. It’s obviously not the hot rental market it has been and we as agents need to do more than just open and stand at the door. Be early, open up blinds, turn on lights and welcome questions and feedback that prospective tenants might have. Agents should be finding out what other properties prospective tenants are seeing and get their feedback on your price point.

Pricing

Of course it comes down to this in many cases. Scour through similar listings online and place your property up against others that offer the same number of bedrooms, bathrooms and amenities. Compare locations, presentation and decide which you would prioritise to go and inspect on a Saturday.

Price is everything so if you’ve covered all of the other P’s listed here and are sure you’ve covered all bases then it’s time for the asking rent to match or beat the market. Rental price achieved is never a permanent thing but as many smart investors know, weeks and weeks of unnecessary vacancy can be much costlier then not meeting the market at the time.

Agent’s should be making recommendations and suggestions in terms of pricing along the way, not an ideal conversation but one that must be had! Don’t let it sit too long trying to achieve a rent that the market just isn’t there for.

(Picture source)
0% Vacancy Picture a Screen Grab of our portfolio #humblebrag

Need suggestions or an obligation free review of your properties online advertising, feel free to give me a call!