Category Archives: Owners

Vacant rental? It’s time to get to work!

Vacant rental? It's time to get to work!

Finding your dream tenant is very much like finding your dream client in business. The more you can do up front, will save you a lot of time and headaches down the track. When tenants move out, there is always some wear and tear so spending time getting your rental up to scratch before renting it out again is always worth it.

A well looked after property gives the impression that they will have a landlord or property manager who will look after them. New tenants will feel like they will be able to reach out if they have problems or maintenance issues which need to be dealt with quickly.

Here are some tips to make sure your rental property is rented again as soon as possible.

Update your rental

Take advantage of the vacancy to refresh the property. Whether you just need to do something simple like building a deck, re-painting or replacing the kitchen or bathroom, it much easier to get it done before you rent the property out again. Use the downtime between tenants to your advantage and get any planned upgrades completed during this time when the work will not disturb your tenants.

With your property well maintained, clean, and fresh, you’ll be ready and make a good impression on your next client. A little extra care applied to these simple things will help you start off your next landlord-tenant relationship on the right foot.

Sort out any maintenance issues

Some tenants will report every minor problem during their tenancy while others will let things slide. See what needs some attention and before your next tenant moves in, make sure any required repairs are taken care of.

Walk through the entire property with a checklist and fix anything that needs it.

  • Check that the smoke detector is working and has new batteries
  • Check for dripping taps and fix any that are.
  • Make sure every door has the proper knob or handle.
  • Check for cracked window panes and replace.
  • Check all screens (doors and windows) to ensure they open and close and have strong locks on them.
  • Look at the paint on the walls and ceilings. It depends on when it was painted last; you may get away with just wiping them clean.

Sometimes you’ll get lucky and have great tenants who leave the place in better shape than when they got it, but even with great tenants, there are always a few things to clean up upon move-out.

  • Air conditioner filters – these need to be done on a monthly basis so make sure your new tenant knows how to do this, moving forward.
  • Exhaust vents and fans. These get very dirty, so they also may need a thorough clean if the previous tenants haven’t kept up with it – especially the kitchen range hood.

What other things do you do to get your rental ready for the next tenant?

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How can a property management company help you?

 

true-property-how-can-a-property-management-company-help-you

If you own a rental property, someone has to manage it. Yes, you can do it yourself, but let’s be realistic here, do you really have time to do it? This is where hiring a professional management company can save you time and energy.

What is property management?

It’s the managing, or handling, of real estate property by someone other than the owner. Most often, it is handled by a management firm that might handle more than one client’s real estate properties.

It goes without saying that quality is a big issue with this service. A sound management firm will act as a go-between for the property owner and the tenants, handling any questions and complaints that the tenants might have so that the owner does not need to deal with them. This kind of service can include collecting rent to hiring gardeners and maintenance contractors. They can keep an eye on repairs that need to be done, and suggest improvements on the property to the real estate owner.

Property managers can also be essential in keeping an eye on your property – making sure that no one is vandalising your investment, and taking care of problem tenants as well. The actions that manager may have to take can include eviction, as well as involving the authorities, tasks that a real estate investor may not want to do. They can also be used as arbitrators between tenants, when disputes arise that are not severe enough to involve the police or other authorities.

When done well, property management is the answer to a lot of issues that real estate investors might face. The management team can do the hands on work while the investors reap the profits.

Visit us for more information on how a Property Management company can assist you with your rental property.

Thinking of evicting your tenant? It’s not that black and white.

True Property - evicting tenants

Ending a relationship is hard to do. Most of the time, it doesn’t come down to one thing, but a number of small things that drive you crazy about the other person that makes you realise you need to put an end to it. Deciding when to get rid of a tenant is more or less the same.

If a tenant is behind in their rent, has turned the property into a rubbish dump or uses the property as a headquarters for illegal activity, he or she is definitely a candidate for eviction. However, it is rare that things are so black and white. Landlords will more likely deliberate over whether there are sufficient grounds for eviction or whether they are being unfair.

What is crucial when evicting a tenant?

Think about the property. How difficult would it be to get another tenant in? Specifically, consider the type of tenant your property usually attracts. If it is a mansion with a luxury spa and tennis court, the prospective tenants are people you would expect to always have money for the rent. Whereas, if the property is tiny in a dodgy part of town and attracts tenants who barely make rent each week, it may be worth it negotiate with the current tenant on rent payments.

The tenants themselves should be considered. If they have just moved in and are already the subject of numerous complaints, they need to go. However, if they are long-term tenants with a history of being reliable with rent payments and good behaviour, think about arranging a meeting to ask if there is a problem with their situation.

If the property has multiple units, every unit must pay for itself. If you let one tenant slide on the rent, the danger is that other tenants may also start becoming less conscientious about when their rent is due. This is especially so if they find out you have cut one of the other tenants some slack.

No one likes to be the “bad guy”, but no one likes losing money either. Sometimes it simply has to be done.

When was the last time you had to evict a tenant?

Co-owning an investment property

True Property - Co-owning an investment property

Let’s face it. Investing in property is not cheap. In order to get on the investment ladder, you need to have some funds to put down. If you don’t have the funds but still want to invest, one way to do it is to partner up with a friend, relative, or some kind of business associate.

So before committing to this kind of arrangement, make sure you are aware of the following:

How long are we talking?

Is it a 10-year project? Or is it a rolling 12-month agreement, where every year you sit down and decide whether to hold the property or sell it? The duration of the agreement will become important if one of the stakeholders dies. If their intention was to hold it for 10 years due to a desire to capitalise on the long-term growth in the area but the relatives want their share of the property now, what do you do? A well written and well-defined co-ownership agreement will put the matter to rest.

Who’s in charge?

An agreement should be made about who will manage the investment. If it’s a residential property, it’s possible that one of the co-owners who lives locally can manage the property. This approach will save you property management costs. But will the one managing the property be as good at selecting quality tenants and maximising the rentals as a professional real estate agent would be? If the co-owners decide not to use a property manager, how will the owner who assumes management be compensated, if at all?

Repairs, maintenance, and renovations

Whether the property has been pegged for demolition or if it will be tenanted, you will need to develop a plan for repairs, maintenance, and renovations. How much are you willing to put into the property each year and who is responsible for making them happen? Maintenance and repairs will ensure higher yields for your property so you need to make sure this is a top priority.

Working out equal say

Do all owners have an equal say regardless of the contributions in the investment? In other words, does the vote equal to the amount invested? Will voting constitute “majority rules” or a unanimous vote to sell the investment earlier than the 10-year time frame originally agreed upon? It is best if the group formulates a business plan that is detailed in the co-ownership agreement so that disputes and disagreements can be avoided. It pays to look into these areas and get things right from the start. After all, the co-ownership agreement is there to protect you when things go wrong.

Would you consider a co-ownership situation to get the right property? If so, what would be your biggest concern?

What to do when tenants get aggressive

True Property -True Property - what to do when tenants get aggressive

As a landlord, you have to wear a lot of different hats sometimes. You have to interview new tenants, be a rent collector and take care of maintenance issues. And sometimes you have to act as a mediator as well. Hopefully, this type of thing doesn’t happen on a regular basis but this is why it is important to know how to handle a situation like this.

If your tenant is involved with a family violence situation there is a process in place and you can help your tenant get the help they need.

If your tenant has confided in you that there is an issue, encourage them to work with your state’s law. This information is for Victoria, so be sure you know what is required in your state. I would advise that in any situation like this, you get legal counsel so you can understand the ramifications of any decisions you make. You may think that changing the lease without legal intervention is the right way to go. It depends on the case – you could do more harm than good.

What should the tenant do?

The tenant/victim needs to apply to the Victorian Civil and Administrative Tribunal (VCAT) to have their tenancy arrangements changed.
This can be done only after a family violence intervention order is finalized by a magistrate.
The protected person(s) (i.e. your tenant) can apply to VCAT to end the lease early or arrange for a new tenancy agreement even if their names are not on the existing lease.
VCAT will determine who is entitled to any bond or who is responsible for any damage.

What can the landlord do?

Has the right to have a new ‘Condition Report’ provided on the property and also be given entry to the property to view the condition of the property (after property notice has been given).
As you can see VCAT is where the power is in this situation, and without it your tenant may create more problems for themselves.

For further information on this please see Consumer Affairs Victoria.

Have you ever had to deal with this before? What was your first step?

What are good landscaping ideas for a rental property?

True Property - What are good landscaping ideas for a rental property?
An attractive garden will no doubt appeal to tenants wanting to rent your property. However, tenants usually aren’t prepared to carry on with the upkeep.

Landlords often request an easy to maintain garden because they find tenants don’t look after it. The trick is not to make the area look like a ‘prison yard’ – with some paving and one or two small plants lost in a desert of gravel.

If your rental property already has stunning gardens which you want to have maintained to a high standard, you may want to consider giving your tenants ‘added value’ by paying for a gardener to maintain them and building this into the rent. This depends on who your ideal tenant is and if they would be happy with that.

If you don’t already have a nice garden, here are some landscaping ideas to keep thing low-maintenance.

  • Go for the natural look, since a formal garden requires trimming and pruning.
    Rather than digging organic material into clay soil, make raised beds with a combination of topsoil and organic compost.
  • Make shrubs and small ornamental trees the backbone of your garden, not flowers.
  • Under plant shrubs with ground covers to keep down weeds.
  • Don’t grow plants that need staking, pruning or de-heading. If you already have plants there, ask the tenant if they want to keep them, otherwise pull them out.
  • Reduce lawn areas and substitute with evergreen ground covers or hard paving, pebbles or shell.
  • Look at what grows naturally in your area and reproduce it in your garden, drafts of native grasses will regenerate and look natural
  • Eliminate allergy causing plants the last thing you need is tenants moving out due to hay fever striking every time they step into the garden!
  • Use weed mat or mulch around plants to save irrigation and suppress weed growth

If you are still in doubt or have concerns contact us, and we will put you onto a reputable landscaper in your area to assist you.

What other ways do you make the outside area of your rental property easy to take care of?

Is it a good investment?

True Property -is it a good investment

It goes without saying that the goal of most investors is to get the best deal they can when buying property. No one wants to spend more money than they have to and everyone wants to make a profit.

What should you think about when deciding whether to purchase an investment property?

Does the property have subdivision potential? If yes, this could be a great investment. Sub-dividing and then selling or developing the additional lots can be very lucrative. However, developing property takes some considerable knowledge and skill, so be prepared if you decide to tackle this task.

Is the property a diamond in the rough? Many properties that appear to be ‘fixer-uppers’ can put off buyers and go unnoticed in the market. If the issues are easily fixed, it may be worth spending the money to renovate if you can make a return.

Does the property have a below-market lease in place? Often owners will accept lease terms below market value to secure a long-term lease. This can impact the value of the property’s resale price based on achievable yield in some locations. Buying a property with a below-market lease in place is quite often a great way to secure a good buy. You may have to ride out a number of years at a lower return, however once the lease expires, the rate can return back to market level and instant equity is achieved in the property.

When you’re happy that the property meets your specifications, you need to consider how much you would be willing to pay for it and any opportunities that may enable you to lower the price.

Research both the market and the person selling. You need to know the amount of buyer interest in the property, how long it has been on the market and what similar properties have sold in the area to establish market value. Just as importantly, you need to know about the seller. What is his or her motivation for selling? Is it urgent? Has the price been lowered in the time it has been on the market?

Flexibility is important. Often, the price is not the only important thing in negotiations. Many sellers will value a fast and unconditional settlement. Ask what other terms are important to the seller, as this may help negotiate a better deal.

Hold your cards close. Keep a poker face and do not let the seller know your position. Instead, let the seller know that although the property may be suitable, you are also considering other properties.

What is your decision-making process when deciding whether to buy an investment property?