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Jun 5, 2024

NEVER UNDERESTIMATE YOUR VALUE

Landlords, if you need another reminder of the critically important role you play in your community and in the wider picture – society at large, here are some points taken from a recent housing investment report, the State of the Market: Australian Private Rentals, launched by Real Estate Industry of Australia (REIA) and REA Group, and backed by PropTrack data. The report addressed the key issues facing renters and investors in a market that has reached crisis levels. The Australian private rental system continues to record extreme pressure. Vacancy rates across the nation sit just below 1.5 per cent. Nationally, advertised rents have been rising 6 per cent for houses and 9 per cent for units over the past year. Renters in Australia now make up around 30 per cent of households and housing stock. It is a very competitive rental market where people are applying on average for six rentals before securing a new rental home, and 75 per cent of successful applicants feel they had to compromise. REIA President, Hayden Groves, points out that, typically, an Australian property investor holds a mortgage and comes from a working household. Investors are generally aged 35-65 years old with more 35–44-year-olds owning investment properties than 65 – 74-year-olds. 70 per cent of property investors only own a single investment property; and just under 20 per cent own two investment properties. Less than 10 per cent of all property investors own three or more properties. It is widely accepted that rental conditions in this country are the tightest on record driven by a hefty undersupply of quality rental stock, constraints on the home construction industry, the resumption of immigrations, and a change in household formation. We need supply to meet the growing demand. We need more landlords, including ‘mum and dad’ investors, to provide rental stock to the one-in-three Australians that rent because they have confidence in a property investment market that comes with incentives not penalties. We also need professional, skilled property managers who are critical to managing the growing rental sector. Thank you for already being in this with us, and never underestimate how much you are valued.

Jun 5, 2024

First time landlords

If you could, what would you tell your ‘pre-landlord self’? If you were to have your time over, there may be a few things you would do differently to save yourself some stress and/or money. However, would it be fair to say that ensuring you have the right team in place, with the right information, from the start, is what sets you on the right path as a landlord? Tips for first-time landlords:  Understand tenancy laws. Australia has state-specific tenancy laws, so it is a good idea to familiarise yourself with the tenancy laws which are relevant to your new investment property. There has been a rise in the number of interstate landlords, so it is important to understand that what might be law where you live, may differ where your property is located.  Surround yourself with a good team. You will no doubt have done your due diligence when in it came to the purchasing of your property, gaining the right advice and professional help when required. For such an important investment, extending that professional advice to the management of the property will help ensure your property is working positively for you. Property managers have a wealth of experience, knowledge and tools at hand to successfully help manage a property from vacancy through tenancy and everything in between.  Make sure your insurance is right. Ensuring your property is correctly insured should be one of the first things you do. As well as building insurance, do your due diligence when it comes to landlord insurance. No two policies are the same and it’s important to consider what is and isn’t covered to determine if the right policy is in place. Common terms of landlord insurance include loss of income, rent default, damage to property – either malicious or accidental, and natural events – such as floods, storm or bushfires – rendering the property uninhabitable.  The right marketing can make a difference. Finding the right tenant for your property is important, after all you want your property leased as quickly as possible and cared for by the right person. Determining your tenancy pool and following through with correct reference checks is vital and is a process in which your property manager will follow thoroughly. Tenancy agreements should cover all aspect of the property and what is required.   Get organised early. Good record keeping from the beginning is important. Set a process which works for you and stick with it. Not only will it make information easily accessible for review, it will also help streamline processes if/when required. Engage with your team – property managers, accountants, financial advisors etc – to confirm important dates and what is required to ensure the administration side of your landlord business is kept up to date.  Following on from that, consider your property a business. It can be easy to let the emotional side of renting your property to others become an emotional one. You want your property to work for you and ideally generate an income, so it’s important to carefully consider your expenses to ensure you are not overcapitalising on the property. There will no doubt be expenses you will need to make to the property to keep it to a standard, be aware of what can and cannot be claimed as a deduction come tax time. Becoming a landlord for the first time is an exciting step – it often marks the beginning of your property portfolio journey and often the purchase of an investment property will be but a small step in an otherwise long-range forecast wealth/retirement plan.

Jan 13, 2023

Where should I buy my Next investment property?

It’s the age-old question we’d all love a crystal ball to answer. But when it comes to expanding your property portfolio, the answer is different for everyone. Don’t leave things up to chance; regardless of your purpose for expanding, gaining the right advice and making the right decisions for your own personal and professional circumstances is vital when it comes to your next investment. While family and friends mean well, keep in mind that their own experience and advice may not necessarily be relevant to you. Conversations and learned experiences are great, but we’re seeing a very different market to possibly what they did when they purchased. Take it on board, but don’t let it be the only source of information when it comes to your future purchases. Depending where you’re at in both your life and property experience, making the right decision about the next property you add to your portfolio may look different than your first, second or even tenth investment. Gain appropriate advice from your financial team. When it comes to numbers ensure you’re well across your own financial situation and understand what adding another property means for you. If you’re not sure where you sit, make sure to ask. What you’re comfortable with and able to spend on your next property must be well considered. What can you get for your dollar? Is there a need for rental properties like the one you wish to purchase? Property location will always remain an important consideration. Availability and price in your ideal location may be a factor, so it may benefit to expand your search area slightly or consider somewhere different altogether – there are many growing regional towns all across the country which are experiencing a need for available rental properties. Take out the emotional side of purchasing, and review your circumstance and decision objectively. It’s important when considering why you’re purchasing; trust that it’s not uncommon to need professional help in doing so. When you’re at the property hunting phase of your purchase, consider who your potential tenant will be. Does your property tick all, if not most, of the boxes tenants are looking for? Proximity for schools/work/play/shopping etc. Remember that even in the best suburbs there are properties that might not be the right purchase. Prepare our financial planning beforehand, research and shortlist more than one suburb to invest in and consider expenses on the property to appeal to the right tenant. If you’re in position to purchase your next investment, have your RE/MAX property manager introduce you to their sales team to help find the right property for you – it may just be available now.