Top 10 Tips to Investing

SALES PROPERTY MANAGEMENTTOP 10 TIPS TO INVESTING

ONE FIXED TERM v PERIODICThe only difference between a fixed term and a periodicagreement is the ending of the tenancy agreement timeframes. A tenant on a periodic tenancy can provide twoweeks written notice at any time and vacate the property intwo weeks’ time. The lessor is required to provide 2 monthswritten notice on a periodic or fixed term tenancy.For you, as the investor, fixed term agreements are preferableso you have more control of when a tenant may be vacatingand provides more time to be able to find a new prospectivetenant for your property before the property is vacant.If the tenant decides to break their fixed term agreement,the tenant pays for the letting commission plus has to payrent until the new tenant is accepted and the new leasecommences. TWO LANDLORD INSURANCELandlord Protection Insurance is strongly recommended byCalibre Real Estate. Whilst every action is taken to securesuitable tenants for your investment; life changes such asjob loss and marriage breakdown can sometimes lead topeople acting outside their usual character. To protect yourinvestment, and for a relatively low cost that may be a taxdeduction; landlord insurance is a must for today’s investor.The key things to consider whilst selecting landlord insuranceis check to see if the policy includes cover for accidentaldamage by tenant, loss of rent, contents cover, Clean upcosts associated with illegal drug production flood and legalcover.

CALIBRE REAL ESTATE

THREE REPAIRS AND MAINTENANCEDealing with repairs promptly is a vital componentof maintaining the value of your property andachieving the best rental return. Prompt attentionto legitimate repairs and maintenance can also bethe difference between a disgruntled and happytenant.It is recommended that monies where possible bekept aside for maintenance and general upkeepof the property. This will ensure your propertyis maintained in accordance with legislativeobligations and sound risk management. Wellmaintained properties generally attract qualitytenants and commonly long term tenants also. CALIBRE REAL ESTATE

FOUR MARKETING FOR A NEW TENANTBrisbane’s high rental demand season is generallyJanuary to February, this is when agencies areusually able to put a property on the internet andhave applications within a week. For more uniqueproperties or during the “off-season” periods it isimperative to make sure that your Property Manageris doing more than just placing an internet ad. Tobe able to attract more tenants in the shortest timeframe, your agent needs to consider not only priceand presentation, but also marketing. Marketinginvolves making sure you have quality photos thatenhance your properties attributes, accompaniedby good copywriting.When there is more supply than demand you alsoneed to consider upgrading your internet advertisinglisting to a feature property to maximise exposure.Prospective tenants want information instantly,they want to know when they can inspect theproperty and all of the properties details. This iswhy interactive signboards at the property arebeneficial. Interactive signboards can include QRCodes or “SMS keywords” that allow the tenant toaccess information and booking times from theirmobile device instantaneously. CALIBRE REAL ESTATE

FIVE WATER CHARGESIf your investment property does not have anindividual water meter, water charges cannotbe passed onto to the tenant.If your property has an individual water meterand is not water efficient, the lessor mustpay for a reasonable amount of water. TheProperty Manager can obtain quotes fromlicensed plumbers to arrange for the propertyto become water efficient. Quotes generallyrange from $200 to $900 depending on thestyle of toilets and fixtures.If your property has an individual water meterand is deemed water efficient, the lessor maypass on total water consumption charges tothe tenant. It is strongly recommended that aplumber certificate or sufficient evidence is kepton file in the event the tenant disputes that theproperty is water efficient in compliance withthe relevant legislation.The process for water charging will depend onwhich criterion above your property fits.At the start of the tenancy agreement, thelessor/agent and tenant should negotiatearrangements for water charging. The presenceof water efficient devices should be noted onthe Entry Condition Report (Form 1a).

SIXPROPERTY MANAGEMENT STRUCTUREMost agencies work Portfolio ManagementStructure which means there is only one pointagent who is able to assistant at any given time.As an investor, pod or team based PropertyManagement allows maintain a single point ofcontact with a senior property manager knowingthere is a team of qualified proeprty professionalsworking beside the Senior Property Manager tomanage your investment.Accountable relationships and constant supportand advice available from our team of propertyprofessionals allows landlords to reap the benefitsof our comprehensive knowledge, products andservices which are adjustable to their desires andtimeframes. It is for this reason, Calibre Real Estatehas implemented this structure and have seenboth landlords and tenants reap the benefits.

SEVEN ROUTINE INSPECTIONSYour agency should undertake a minimum 3 routineinspections a year. An agent will use their bestjudgment when undertaking a visual inspection ofthe property. The inspection reports will highlight anyobvious or reported defects or maintenance and providecommentary as to how the tenant is maintaining theproperty. If any action is required, your agency shouldrequest your written instruction or act according to themanagement agreement instructions. For example ifthere is routine maintenance to be carried out such asbuilt in roller doors not rolling properly, kitchen hingesneed replacing due to age, doors getting jammed etc.,the agency should carry out the required works on yourbehalf and appoint a suitable contractor to attend andadvise you that this has occurred.If the tenant is required to undertake certain matterssuch as cleaning or yard maintenance, this should beactioned and followed up then reported to the lessor.Your Property Manager cannot instruct the tenant onhow to live as such; they can however direct the tenantto carry out certain tasks if the situation is causingdamage to the property.

EIGHT RENT ARREARS PROCEDUREYour Property manager should ensure all tenants sign arental payment agreement form at the beginning of theirlease and understand their rental payment obligations.Should your tenant fall into arrears, under the RTRA Act,action can only be taken against a tenant when theyare seven clear days behind in their rent payments. Bestpractice for an agency is that they contact the tenantprior to this time and advise them of the rent paymentbeing overdue. Section 280 allows your agent, onyour behalf, to serve a breach notice to the tenant onthe 8th day of arrears. Under legislation the tenant isthen given the allowed remedy period of 7 days to paythe rent owing. They should then advise you promptlyif rent defaults occur and keep you informed of thedevelopments until there is an outcome.Debbie Palmer of Leased magazine states:“It is your [property manager’s] duty of care to monitorarrears and issue notices promptly every day. Failure toissue notices promptly can cause the owner financialloss if the tenant does not pay.”Below is a table demonstrating the recommendedaction taken over a 30 day period.

NINE ADDING VALUEThere are things you can do to increase the valueof the property while also increasing the yield.Whether you are targeting a niche market or arethrowing in a few extras, there are many creativeways landlords can boost their rental yields.These bonus trimmings like adding a car space,dishwasher or air-conditioning can often be a makeor break for potential tenants. Although there isa cost to implement these additions means youare able to charge a up to $95 more each week,adding up to almost $5000 a year in extra rentalyield.In terms of a mid-term investment to increaseyour rental return a 5kW solar panel system thatgenerates enough power to the property and alittle more to go back into the grid can be installedfor around $5000. Solar panels can allow you tocharge an extra $20 a week rent as the tenantwon’t be paying any power bills. The best part isyou usually have your money back with-in a fiveperiod from the installation date.Presentation can also be an efficient way toachieve the best possible price, so adding valueto a property can be as simple as replacing blinds/curtains, new carpet, paint touch up or evenspending a little time tiding up the yard.

TEN PROPERTY TAX DEPRECIATION“As a building gets older and items within indeteriorate they depreciate in value. The ATOallows property investors to claim deductionsrelating to the wear and tear on the building andits fixtures and fittings. Such deductions can beclaimed by any owner of an income producingproperty; including residential properties. In short,depreciation reduces the amount of tax investorspay.Maximising a depreciation claim on any buildingrequires a distinctive combination of constructioncosting skills and experience, combined with anintimate knowledge of the Income Tax AssessmentAct 1997. Quantity Surveyors are recognised by theATO under TR 97/25 as appropriately qualified toestimate the construction costs of a building fortax purposes.Beer, B. (2013, Spring ). Help to Educate PropertyInvestors About Depreciation. Leased1, 12-14.

SALES | PROPERTY MANAGEMENT191 Musgrave Road Red Hill QLD 4059 07 3367 3411 0439 672 163 [email protected] calibrerealestate.com.au CALIBRE REAL ESTATE