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Feb 15, 2023

Rentvesting, is it the right strategy for you?

In more recent times the rise of rentvesting has provided options for those who would like to get onto the property ladder while still living in their area of choice. Purchasing in an area that shows signs of long-term growth and a good rental yield can help in starting a property portfolio while renting in a different suburb that may be closer to work, schools, or amenities. Why rentvest? Rentvesting means that while you cannot afford the property prices where you want to live, you can still get on the property ladder. You may be at a stage in your life cycle where you need to be close to schools, have relocated for work or there are lifestyle choices that are appealing to you. Just because you are renting in one area, doesn’t mean that you can’t begin your own wealth creation and investment options while building a strategy towards your retirement. Researching areas of higher yield can provide insight into potential growth areas and options to begin your journey. Your bank can talk with you about your borrowing power and will consider potential rental returns during your assessment. While you are renting, you will also reduce costs to maintain the property you rent as this becomes the landlord’s responsibility. Potential negatives of a rentvestment strategy Building your property portfolio can provide dividends for the future however there are some downsides to this approach. You will lose any exemptions that exist for primary dwellings and capital gains tax and any profit made when you sell the property at a later date will be subject to this tax. Renting where you want to live will also mean that you have less control over any longer-term outcomes as your tenancy will depend on the needs of your current landlord. They may need to carry out work on the property or decide to sell depending on their circumstances. If you do not research your areas thoroughly, you may find that you are paying additional funds toward a mortgage over your investment as well as any rent increases adding more pressure to your cost of living. This can leave you suitably out of pocket and speaking with a financial advisor about the best approach for you and your situation can be worthwhile. If you are in the market to purchase your first or subsequent investments or are a rentvestor looking for a new home, contact our property management and sales team to talk about your options.

Feb 1, 2023

Landlord insurance needs a health-check

One of the factors of owning an investment property is ensuring that you have a good landlord insurance policy in place, especially at the times of year when there is potential for an increase in incidents. While many companies will offer landlord insurance, not all are created equal, and it is wise to look around and select a policy that is right for you and your circumstances. Once you have that policy in place, carrying out a health check annually to check that it still meets your needs is worthwhile to guarantee you are covered. Aside from rent arrears cover, accidents and incidents can occur to the tenants, property or visitors. Taking out the right policy is a sound investment in protecting you and your asset. Rent arrears cover Check the conditions of your policy around the requirements for rent arrears cover. Some policies require that a fixed-term lease agreement must be in place, and it is imperative that this is communicated with your property manager. Some policies will also require the equivalent of the weeks or several weeks’ rent as an excess and knowing this prior to purchasing the policy can save you in the long run. Others may require a flat rate on claims. Locks and devices requirements As a landlord, there is a duty of care to ensure that all door and window locks are functional and secure. If these are not the case and the tenant has a break-in, any policy they hold may be void and as a landlord, you may be required to mitigate the loss. In addition to a tenant’s loss, there could also be damage to the property, in which case your insurer may not cover the repairs if the property did not have adequate security in place. Accidents and injuries cover The tenants are responsible for any damage that they may cause to the property, as are their guests however accidents do happen, and a good policy will protect the ‘what if’s’ of potential accidental damage that may occur. Sound insurance policies will also contain a public liability portion to cover the tenant and any of their guests for any injuries that may be sustained due to an accident at the property, especially if as a landlord you have not maintained the property to a sound and secure standard. Fire safety requirements as part of your insurance policy You are required to ensure that all fire safety devices like smoke alarms are working on the property prior to and during a tenancy. There are third-party companies who can also assist with annual checks on your behalf. Failing to have the correct fire safety installed and in working order could mean that your investment is not protected should a fire occur, and you may find yourself out-of-pocket significant costs. If you would like to know more about health checking your current investment insurance, speak with our property management team to work out what is right for you.

Dec 21, 2022

Tips to help your rental application

A rental market that has limited availability of properties and a larger number of prospective tenants can create a level of competition that means that you may not be approved for the first or even subsequent rental properties. To combat this, we have put together some tips on what property managers will look for when assessing your application to ensure that you are well-prepared. Have all required documents ready Similar to a job interview, it is important to be prepared to apply for the property in advance of inspecting and putting forward your application. One mistake that applicants can make is not providing all documents with the application which can mean that your application will not be assessed at the same rate as those who have provided all their information. Collate all ID documents, payslips, proof of address and rental history in advance and have it ready to apply and submit as soon as you have inspected the property and determined that you would like to put forward an application. Check your rental history If you have a recent rental ledger, this helps to submit your application as well as the details of your current property manager or landlord. Before you begin the search for a new home, carry out a health check on your rental history including looking at your rental ledger. When assessing your applications, a property manager will look at the rent paid, and the paid-to dates and check for a history of late payments. Even a few days late consistently can impact your rental history and chance of being at the top of the list so it is important to ensure that your rent is paid on time. The property management team will also speak with your current property manager or landlord to check on your rental history and if you have only been in the property for a short period of time, they may check past references to confirm the history. Employment and personal references To help your rental application, before submitting an application, ensure that you have advised your work and personal references that you have put their names forward to provide information on your work or their relationship with you. Your work references will be assessed including the length of time in the role, the income per year to assess rental affordability and information on your employment while personal references may be called for verbal reference. Stand out from the crowd On the day of the inspection, introduce yourself to the property management team, ask any questions that you may have and look through the property thoroughly. Submit your application as soon as the inspection is finalised using the details provided and the team can begin processing your application as soon as they have it. If you have any questions about our available properties or would like to be included in our database to hear about properties before they come to the market, contact our property management team today. Read another quick article with more tips for a successful rental application here.

Dec 15, 2022

Thinking about a sea-change to a rural property?

The need for a tree or sea change often sees city dwellers pack up their lives and move to the regional hubs for a change of pace and a chance to slow down. The lifestyle that rural property provides has many benefits and naturally there are many things to consider. If you choose to purchase a rural property with substantial land holdings or dip into the world of farming and owning livestock, it is important that you check the property for its inclusions and requirements as well as understand the costs of running a new enterprise. Your solicitor or conveyancer can also assist you with pointing out any concerns with the property and key considerations when purchasing rural land. Research the area of the rural property Before making the leap to a rural property, research the area that you are considering relocating to. Check the access to amenities and the facilities that are available. Are there supermarkets and schools close to the property or will you need to travel a considerable distance? Is there easy access to medical facilities if you need to use these services on a regular basis? Check the utilities You may find that moving to a rural area means a limit to available utilities that you would be accustomed to in the city and suburbs. Before purchasing your new home, check what utilities are available and accessible at the property. You may find that the only water available is through tanks, which may require topping up with purchased water in warmer or drought months. Sewerage may also be on a septic system which requires regular maintenance. Power, internet, and phone services may also be limited compared to what is available in suburban areas and this should be researched, especially if you require reliable phone and internet for work. Take notice of the neighbours While you may have taken notice of your neighbours while in the suburbs, it is also important to check the neighbours when you are purchasing rural property, especially if you are relocating to a large farming community. If the neighbours have livestock, will you be comfortable living next to a dairy or beef farm? Or even a sheep farm or one with chicken sheds? Each of these can bring added benefits and challenges. Check for easements and covenants As with any property, your solicitor or conveyancer will check for any easements and covenants that the property is subject to and make you aware of the requirements. It is imperative to understand that there may be covenants around land access and your neighbours or the local council may require access to a part of your property to access their own properties to move livestock or transport machinery. If you have a property subject to mining requirements, you may also find that part of your property will require access from mining companies. Pests, vermin and rural property Depending on the area and if you are looking to delve into farming, awareness of requirements around pests and vermin in the area may hinge on your final decision. Many areas will require treatment of certain pests and plant species and you could find that some breeds of animals or plants are not permitted in the local areas as they may create a biohazard to other farmland in the area. If you would like to talk to one of our sales agents about the rural properties available and their requirements, contact them today to talk about your next move. If you are interested, you can check out the Regional Infrastructure Report 2022

Dec 12, 2022

How to create a winning listing for your property

In markets where there is a lot of competition with many listings or even in those when the listing pool is scarce, a great marketing campaign with the right elements can be key in finding you the fastest possible buyer at the best price. Agents may talk with you about the prospect of advertising the property off-market first prior to going to an on-market listing, where they may advertise to a select database in the beginning. Ensure that your agent is guiding you with a winning strategy around the listing so that you aim to get higher numbers of interested parties through the door. Engage the right agent A good sales agent will discuss a marketing strategy example with you at the listing presentation and should be able to provide examples of similar properties that they have sold in your area that are comparable. Look at these examples after the listing presentation and consider your meeting with the agent and the marketing to assess whether their vision and values align with yours. You will be spending some time talking with the sales agent during the campaign and it is important that you agree on the direction of the sale. Consider professional styling when listing Our sales agents will talk with you about the options for professional styling of the property prior to listing it for sale and during the sales campaign. If professional styling is not possible, they can also discuss options and affordable packages for virtual furniture, especially for professional photography. Professional and virtual styling can help in achieving the best result and price for your home as everyday clutter is cleared and potential buyers can see as much as possible of the property and view themselves in the space. Professional photography and video During your listing appointment, our sales agents will discuss packages for professional photography and video. The value that professional photos and video can bring in a rapidly moving market can be the difference in the final sale price of your home. Professional photography helps to showcase the home and its features in the best light, and it is the first impression that a buyer will get of the property which is why it is important to get it right. Video walk-throughs can show the outlay of the home and give those who are interstate or international more access to view the property and make a more informed decision when it comes to the sale.  Video is a relatively new addition to the real estate marketing mix, you can read more about the benefits of selling with video here. Explain the property features in words Advertising your home needs to tell a story. The benefits of the home, its history, its uniqueness, and its features will appeal to buyers and make them want to come through the inspection and make an offer. Our sales agents will work through the copy with you as part of the marketing strategy to ensure that the characteristics of your home are showcased including how it feels to walk through the property and the benefits of your neighbourhood including amenities and local finds. Contact our team and we can make an appointment to provide an appraisal on your home and talk about the best marketing strategy for you.

Dec 9, 2022

3 factors to consider before becoming a landlord

If you are weighing up diversifying your investment strategy and purchasing a rental property, it is important to be aware of many factors that will impact your journey as a landlord before you jump into the property investment pool. It is not as simple as purchasing the property, finding a tenant, and then sitting back to relax while the rent covers the mortgage. You may find a great property that has no repairs and an excellent yield which will mean that there are minimal future costs, however, the reality can be far different. Work out your investment strategy Your financial advisor will help you plan out your strategy and understand your affordability for purchasing an investment property. They will likely provide you with a budget that you can work with and may even make recommendations on areas for investment that may fit with what you are after. Where you purchase may determine the price that you pay for the property and the yield that it may have the potential to make each year. It is wise to research areas and speak with agents about returns before purchasing so that you can work out if the property is likely to be positively or negatively geared. Be mindful that rents will increase in line with demand and not necessarily when interest rates increase which may impact your affordability. Make allowances for ongoing costs When you make an investment in a property, the assumption is that there will be tenants in the property paying rent to you or through an agent throughout the life of the investment. As such there will be usual wear and tear on the property and costs to consider can be as simple as a leaking tap or appliance repairs to extensive items like roof repairs, fencing, or a burst hot water system. As a landlord, you are responsible for the repairs on these items, and it is smart to allow a buffer from the rent that is put away to cover minor or even major repairs that may need to be done. There will also be a life span on items like paint, carpet, kitchens, bathrooms and appliances and a savings buffer to plan for these future items will save future stress if it is already planned for. Find a great property manager to make becoming a landlord easier Employing a great property manager to manage your investment is one of the best decisions that you can make as a landlord. A professional property manager is well versed in the requirements of the legislation to cover you in case anything goes wrong at the property and will provide professional recommendations and advice on what needs to be done to maximise your investment. For the minimal cost that you invest in fees, they will find and help you select great tenants and work through resolutions should the unexpected happen. They will also work with trades to find competitive prices when it comes to repairs and maintenance. They can also advise you on the current rental market and advise if the rent needs to be increased depending on market conditions, and the current tenants in the property, working with you to find the best solution. If you are looking for your next investment, contact our sales team to talk about our available properties. They will also connect you with our property management team to discuss your investment property options. Additional reading: why should I hire a property manager?

Dec 7, 2022

Tips for managing your mortgage stress

Changes in markets, the cost of living and rising interest rates can put a strain on mortgages and increase the level of stress around day-to-day life activities. Rather than get into overwhelm with the additional load, there are steps that you can take to lighten some of the pressures of mortgage stress. If you are feeling additional pressure, it is a good idea to talk with your lender or financial advisor for solutions that will help to ensure that you are staying on top of your required payments. They will be able to offer a range of solutions based on your needs and affordability. Declutter the budget When was the last time that you sat down and took a look at your budget? Do you have a budget that details your income and expenditure or at least looks at what’s coming in versus what is going out? It is a great time to declutter that budget, put all the monthly expenses down and analyse where your money is going each month. You may find that you are paying for subscriptions or services that you no longer use or identify areas to tighten up spending habits. Renegotiate on utilities, insurance, and repayments When looking at your budget, you may find that you are spending larger amounts on utilities, insurance, and other repayments. It is wise to take the time to research other options available on the market to see that you are getting the best deal.  The Australian Government has created a very useful website to easily check all available competition within the energy market and provides estimates on how much each company charges. You may find that in many cases, you can renegotiate interest rates on your loans with the bank, and plans with utility and insurance companies. It is also great to investigate government rebates that are available to see if you are eligible for assistance. Check your property value When was the last time that you checked in on the value of your property? Now might be a good time to check in with your real estate agent on the current market value for your property and talk with your bank about options. A sales agent will be able to appraise the property, provide comparables and give you an estimate of what the property may sell for in the current market conditions. This can give you a more informed decision of what your property is worth and help with making budget decisions both now and in the future. If you would like a free market appraisal of your home, contact our sales team who are happy to help.

Nov 18, 2022

What are the benefits of landlord insurance

Purchasing an investment property can be an exciting step in life and it can be overwhelming as you work through the steps of tasks that you need to have organised to ensure that your property is ready for new tenants. One factor that is often overlooked is landlord insurance and how important it is in covering you in case the unplanned happens during the lifetime of your investment. What is landlord insurance Landlord insurance covers the rental property for the duration of a tenancy and between tenancies for unforeseen events that may occur at the property. It will cover incidents like damage, theft, costs associated with a lease break, rental default and any eviction costs that may be required. A good policy will also cover public liability in case anything should occur to the tenants and guests on the property as well as for storms, fires, and floods. Risks versus benefits Any investment comes with risks and while you may be lucky to have an investment that never has defaulting tenants or damage to the property via the tenants or weather events, there is always that element of risk in the what-if. The benefits of landlord insurance are the protection against the unknown, especially in changing markets. While your property manager can thoroughly check applicants prior to approval for tenancy, we can’t always predict what may happen, and this is where insurance will cover if the tenant stops paying their rent, breaks the lease or damages the property. A good policy will also protect in cases of strata buildings. A strata building insurance policy will only cover building facilities and not the individual apartment. Should an incident like flooding occur from a burst pipe or mould takeover, you would need to defer to your own policy to cover the cost of contents repairs and potential compensation to the tenant. In cases of damage by the tenant, remember that only the equivalent of four weeks is collected from the bond and in the worst case, this may not cover any rent arrears, cleaning, or damage. The costs of the investment There are many specialised landlord insurance policies on the market and the costs for the policy will vary depending on the state that you are in and the value of the property. It is wise to shop around for a good insurance policy that covers the protection over the investment and look for one that covers loss of rent, pet, malicious and accidental damage as well as natural or otherwise disaster events. Don’t forget to check the excess in addition to the premium, a lower excess may mean a higher premium and that is worth weighing up. If you would like to know more speak with one of our property management team who would be happy to help. Another thing to consider for your investment property is compliance awareness.