Tag Archives: property

Finding new tenants before the new year

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It’s already the end of November, how this year has flown by! Are you thinking about your new year’s resolutions for 2017? Landlords often find that new years equal new beginnings and tenants will be moving out during the summer holidays so they can get settled in their new area before the kids go back to school.

If you’re organised, you can get your next tenant lined up and ready to move in before the previous one has left. This will depend if you have maintenance issues to sort out first, but the quicker you can get a new tenant to move in the better on your bottom line.

Have you thought about holding an open home to show prospective tenants around all at once and you won’t have to be on call to show people around individually?

How can you make sure your open home is a success?

Be prepared. Be confident with your property and the open home will go a lot smoother.

Make sure you arrive at least 30 mins early. You can guarantee that people will show up early if the property is in the right location and ticks lots of boxes. So be there before everyone else. Maybe even get there an hour before, just to be safe.

Telling prospective tenants to ‘go online and download the forms’ may put them off. Have all of your application forms on hand, and more than you think you may need. It’s always better to have too many than not enough.

First impressions matter so walk around the property and see things with fresh eyes. People will be put off if the carpet is rolled up along the wall and paint cans lying around. It doesn’t matter if you promise that the carpet will be in and the place repainted before they move in. Complete all of your tasks before you hold the open home.

Is the garden tidy and the lawns mowed? Is everything working inside? Does it need new carpet put down? If your previous tenants have moved out already, now’s the time to do all of your repairs.

You can employ a property manager to take care of all these things for you. It is wise to be still involved in this process, but a property manager can take the brunt of all of these tasks. Remember that investing in property doesn’t mean that you set it and walk away.

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How can a property management company help you?

 

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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.

What do tenants actually want in a rental?

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The thing about being successful in business is giving your customers what they want.

Being a landlord is no different.

Every city and suburb are different, so tenants will be looking for various things.

Warm areas want A/C and cold areas want a fireplace or sufficient heating in winter.

Backyard entertaining area

We all love the outdoors and having a great entertaining area in the garden will delight tenants.

This will be more important from now on with summer on the way.

If you are looking for new tenants now, spend some time making the garden gorgeous for summer.

Sufficient storage space

Storage is always going to be a problem for everyone. We all have way too many belongings, and there is never enough room to put our things so it’s no surprise that having sufficient storage space what tenants are looking for.

If your rental has no built-in wardrobes and you only have one cupboard to store everything, you’ll need to get some extra storage space added. This will be vital to attracting the right tenants.

What are tenants looking for?

Tenants are like house buyers, they are looking for the similar things in a property. They want a safe, well-maintained property in a good area that is close to amenities. Different demographics will want different things. A family will need enough bedrooms and decent size living area while a young professional will need a secure building with parking close to the CBD. When you are looking at purchasing an investment property, how do the features compare to other rentals in the area?

Would you live there?

Look at the property from your tenant’s perspective, would you live there? You don’t have to love the style of the house, but would you live there as a person renting? Is there a good heating/cooling unit? Is there a place to enjoy a beverage outside on a balmy evening? Is there a place to park your car? What about storing camping gear, bikes and other equipment? Is there are sensible layout? Do you have to walk through a bedroom to get to the only toilet in the house?

What other features have you heard tenants say are non-negotiable?

How to snag a deal when it comes to investing in property

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One essential element to being a successful property investor is getting to the property before the competition and snagging it for under market value.

But how do you do that?

It all comes down to planning.

Research and Planning

You need to do lots and lots of research! The numbers don’t lie, and you need to have accurate historical data to make informed decisions. Some areas you need to cover include:

Median price in the suburb that you are investigating – past 12 months, five years and ten years
Track property sales in the targeted suburb. Which ones are going to auction, which is being passed on. Ask for price guides from agents. (Keep a closer eye on comparable properties)
When you are viewing a property, find out what it last sold for, when and how long it stayed on the market.

 

Consider a buyer’s agent

A buyer’s agent is on your side. They are trying to get the best deal, and they take the emotion out of it all. Send the agent to auctions to ensure you don’t get caught up in the excitement and go over-budget. Buyer’s agents are experts in the areas you’re looking at, and from their experience, they will be able to give you a general idea of what a property is worth.

 

Make an offer

Sometimes you might want to put in an offer before a property goes to auction (if that is where it’s going). Some vendors may want to skip the auction stress altogether and jump on your offer. Have a good negotiation strategy – not offering your top dollar first off is a good move.

 

Know when to walk away

There is always going to be another property around the corner. So if you miss out on one because it’s more than what you can afford, don’t worry another one is on its way. Plus, you never know, the vendor may not be able to sell it for their asking price and may get back in touch.

Bargains aren’t easy to find but they’re definitely out there. Have you snagged any good deals lately? Let us know in the comments.

Would you let your tenants renovate your rental?

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By letting your tenants make the house their own, they’re more likely to be happy tenants and stay in your house long-term. However, you might open the door for them to make other (unapproved) changes, which means you could spend more time and money fixing them when they move out.

There are a few pros and cons when it comes to letting your tenants make improvements to your property.

 

Pros:

There are a few advantages to having tenants be involved in decorating their space, after all, it’s their home, even if it’s your house.

If you haven’t redecorated in a while, then it may be worth considering if they have experience in what they are doing. You could get some free labour out of it. Find out what their previous experience has been, and you might be pleasantly surprised.

It could be a great selling point when renting out the property. When showing prospective tenants around you might offer that they can redecorate with your approval – it may mean that you can get them to sign a longer lease.

This could also be used as an incentive to renew their contract. You may want tenants to commit to a 6-month lease, and then upon renewal, the tenants would be able to paint a certain number of rooms (or whatever renovations they want to do) with your approval. This will develop trust, history and incentive.

 

Cons:

The horror stories are out there about what some tenants have done, and if you have been burned before you will no doubt be on the ‘No’ side of the line.

Tenants who you allow to paint one room an approved colour and they end up painting the whole house – in bright orange!

They have never painted before and end up painting over light fixtures, outlets, carpet, or even paint around furniture rather than move it.

They try to remodel the house by knocking down walls – load bearing walls.

 

Middle-ground

As with anything, it comes down expectations laid out at the very start. If you have a lease that outlines what tenants can and can’t do, then you have saved a lot of headaches.
Some things that you could consider to include in the lease:

  • Have a set of approved colours.
  • You purchase the paint and they provide the labour (this ensures that the paint will be in fact, the colour that you approved).
  • Inspect the work afterward or supervise the painting.
  • An extra deposit. Either a deposit to cover the house or an additional deposit per each room decorated.
  • Spell out what sort of holes in the wall are acceptable for hanging artwork.
  • Wallpaper guidelines colours and quality of the installation.
  • If you have been burned once you won’t want to go down that track again, but if you have developed a good relationship and history and have good clear guidelines in the beginning, then you both can win.

Renovating and decorating is a major issue for any house, regardless of who is doing it. Contact True Property Management for advice and let us oversee any work being done to your investment property.

Hey Landlord! Did you know that you’re a business owner?

When you buy your first rental property, you become a business owner.

And running a business requires a lot of time and effort to do it properly.

Many people think when they purchase an investment property, they can sit back and watch the money roll in.

But guess what?

It takes more than that.

HATE PROPERTY INSPECTIONS?

If you want to be successful, the first thing you need to do is keep a close eye on your finances.

Managing the finances for your property investment business shouldn’t be an afterthought.

It should be a core part of your strategy.

It is important to plan ahead and always have money set aside for unexpected expenses that may pop up.

Try forecasting for six months and then adjust your plan if necessary.

Have a separate bank account

Like all businesses, you should try to keep your personal expenses separate from your business ones. It makes it much easier to organise come tax season. Open another account with your bank, or even a different bank, to ensure your finances are kept entirely separate.

Keep a record of all your expenses

This can include things like:

  • Advertising to find a tenant
  • Repairs
  • Maintenance
  • Rates
  • Insurance
  • Hiring a property manager.

You can create a simple spreadsheet for this or use an accounting software like Xero. Remember to keep all of your receipts too.

Manage your Income

The best way to collect rent is by automatic payment. The same amount on the same day of the week or month makes it easy to keep track of. You have a digital footprint of every dollar you receive and you know instantly if a payment is late. When you are in business, you are there to make money and owning rental properties is no different. You need to know what income you have received to the cent.

 

Hire an Accountant

While you may be able to handle your finances yourself, is it always a good idea to get an accountant to look over things too. They can deal with the taxes and deducible expenses. You may be able to claim things you never even thought of. Hiring an accountant is a good idea if you have multiple income streams.

How have you organised the finances for your property investment business? Contact True Property Management to find out how we can help you manage your finances better.

How much money does your tenant make?

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When screening potential tenants, one thing you need to find out is the ratio of their income to the rent they will be paying you.

If the rate is too high, you run the risk of your tenants going through a bad patch, then not being able to pay you. On the other end of the scale is if it’s too low, you might struggle to attract your ideal tenant. Tenants with a high income may have higher expectations.

The standard approach of the ratio is 30%. 30% of your tenant’s income would go to rent, leaving 70% for the tenant to live and play.

What happens if you slide it one way or the other? If you want rent to be 20% of your tenant’s income, then your property needs to reflect that. You would be attracting high-level professionals, and it’s likely that they will be looking for high-end features. If this is the case, do the numbers still add up on your end? Are you making the profit that you would be if you the ratio were 30%?

What about if you slide the scale, so the ratio is 40% or even 50% of a tenant’s income? You will have a tenant who may struggle to pay the rent on occasion – are you prepared for that?

Tenants (hopefully) will have an idea of what rent they are comfortable paying, which will factor in any emergencies.But it’s your responsibility to double-check during the application process.

Undertaking your due diligence and choosing the right tenant is the key to enjoying being a landlord. Are they responsible? Are they likely to stay for a good long time? Can they afford to live on your property? The rent to income ratio is one of the key factors to look for when you are choosing the right tenant. It’s important then to make sure you feel comfortable with whatever percentage you come up with. But no matter what percentage you want, have a plan in place, so you know what to do if your tenants are demanding more features, or they are not paying the rent.

If you would like help deciding on the ratio for your property, get in contact with us, we’re happy to help.