How to find the best tenants

How to find the best tenants

Tenants are an important part of your investment property succeeding, so here are some tips on getting the best tenants and minimising tenant turnover. Find the right property manager Finding the right team to manage your property is critical. Too many people do property management because they think they should rather than they want to do it. They must: • Have a dedicated property management division. • Have experience and have had previous success with problematic tenants. • Have an agency principal involved in the function of the property management division. • Have a manager that does/oversees inspections. • Has good programs and processes for vetting applications and monitoring rental arrears. Update your property By keeping your property in top condition, you’ll attract tenants who take care of their belongings and property, and it will also keep you ahead of the competition. Ensure property updates suit your target demographic. Set the right price Keep your rental price in line with similar properties in the area or other landlords will gain a competitive edge in the search for good tenants. Your real estate agent should advise you about the current market and how much similar properties in the area are being rented out for before deciding on a realistic price. Always run a credit check It’s a good idea to include a credit check in the screening process as it is usually safer to choose a tenant who has good established credit. Ensure reference checks are being performed Ensure your property manager makes reference checks with the applicant’s previous landlords, who can clarify whether the tenant paid their rent on...
Why are property sales volumes declining?

Why are property sales volumes declining?

Property transaction volumes are reportedly declining in Sydney, and nationally. There are about 9.75 million residential dwellings in Australia, but despite a record construction boom stock turnover has fallen to well below 3 per cent, and way below the historical averages. Auction results are telling us this. There could be any number of reasons for this… Staying put! We know that the ridiculous cost of stamp duty (and selling fees) is a discouraging factor for people wanting to move house in Sydney. Stamp duty receipts in New South Wales have more than doubled since June 2013 to $8.63 billion. In June 2013 the buyer of a median priced house in Sydney paid about $27,000 in stamp duty, mortgage fees, and transfer duties. Today, they’ll pay nearly $45,000. That’s a lot of capital growth required to justify the costs of moving house, so we’ll arguably see a shift towards renovating and staying put (or buying cheap and renovating) just as we did at Sydney’s previous cyclical peak in early 2004. A buy & hold strategy A structural change over the medium term has been the “asset lock in” associated with property investors, with the prevailing tax legislation more or less compelling investors to use interest only loans and play a longer term capital growth strategy.  Since the latest round of monetary easing from 2012 investors have become a more substantial force in the larger capitals. There has been a 300 per cent increase in outstanding investor credit since 2003. Buy, hold, and compound the capital gains. Offshore investors In Australia non-residents are generally restricted to the purchase of new dwellings, thereby encouraging new construction,...
The majority of Aussies are still upbeat about house prices

The majority of Aussies are still upbeat about house prices

Record high house prices in Australia doesn’t seem to deter buyer sentiment, while sellers think 2017 is a good time to sell, says a new survey. Two in three (62 percent) Aussie home owners believe this year is a good time to buy, while a further 73 percent believe it is a good time to sell, according to the findings of the survey commissioned by free real estate agent search service, Local Agent Finder. The survey was conducted from a nationally representative, independent panel of 1001 Australian adults. How do we know? Local Agent Finder allows vendors to compare property sales agents in their local area, in conjunction with Pureprofile, a data and insights company. Local Agent Finder CEO Matt McCann said it was interesting to see two-thirds of Australians believe property is a good buy this year, given the double-digit percentage increases, talk of interest rates rises, and possible changes to property investment legislation. “Many of us are talking about Sydney and Melbourne’s strong property market, but that is not really being seen outside of the Eastern Seaboard. In fact, the value of property in Brisbane, Adelaide, Perth and Hobart were lower in 2016 than they were eight years ago,” he said. The Figures Sydney and Melbourne recorded the highest dwelling value increases from 2015 to 2016, at 15.5 percent and 13.7 percent respectively. Other cities had lower increases, with Canberra dwellings increasing by 9.3 percent, Brisbane by 3.6 percent and Adelaide by 4.2 percent, while Perth decreased by -4.3 percent. A majority of home owners surveyed in New South Wales, 81 percent, believe it is a good...
How to spot the next up and comer SUBURBS

How to spot the next up and comer SUBURBS

What does everybody want? To buy in the suburbs before they explodes into popularity and you make a killing setting you on the road to financial freedom. It’s not that easy. As the demand for property continues to grow around the country, middle and outer suburbs that were once unfavourable are now highly desirable places for families. Sometimes you can spot the next suburb to boom by the quality of the cafes and restaurants in the neighbourhood. Another sign is the amount of homes you see being renovated. The greater the number of renovations the greater the strength. People are getting priced out of a lot of inner-city suburbs and are forced to look further afield where property is more affordable. However if an area has all the right fundamentals in place and is next to an area that has already proved to be popular then it will likely catch up. A few ways to find the right suburbs:   The suburb borders suburbs with a much higher price tag. The suburb is close to main hubs, has access to good public transport (preferably trains) and other amenities. New developments or infrastructure upgrades are set for the area.   There is a shortage of properties on the market. Properties don’t last on the market long and open homes are extremely busy.   Chat to local real estate agents who are normally first to notice when a suburb starts to heat up. They will notice the increase in property queries and the busy open homes very quickly. But make sure you’re quick to find the next hotspot, because once people...
How to save up a home deposit more quickly

How to save up a home deposit more quickly

Saving up for a deposit, whether it’s for a home or an investment property, is a time-consuming process, and it can feel like property prices are outpacing your ability to save. So what can you do to speed up the process? How much will I need to save for a home deposit? You should save up a deposit of at least five per cent of the purchase price of the property you want to buy. On top of this, ensure you have enough to cover stamp duty, conveyancing costs, building and pest inspection fees, and other extras. However, to avoid additional costs like lender’s mortgage insurance, it is a good idea to save a 20 per cent deposit. Many banks also recommend saving a 20 per cent deposit since it gives you a better chance of securing a home loan, and keeps your loan-to-value ratio (LVR) down. In some cases, if your parents or other immediate family members own their own property, they can guarantee your loan using the equity on their property, in which case you could be able to buy a property without the need to save a deposit. They will, however, need to have 20 per cent of the purchase price of the property you wish to buy in either cash or equity. 4 simple changes you can make when saving for a home deposit Pay off debt Paying off credit card debt or other loans while trying to save can be extremely ineffective, particularly if a lot of it is only to cover interest. Create a budget A budget begins with analysing where you spend...
Reasons sellers are holding off listing their properties

Reasons sellers are holding off listing their properties

It’s the million dollar question every real estate agent and buyer is asking, where are all the listing and ‘for sale’ signs? The Proof Venture out on a Saturday and you’ll see a force of buyers drifting between the same open for inspections, and it’s not uncommon for our agents to be selling property in suburbs that have just two or three listings available. The real estate atmosphere is strong due to the high demand from buyers thanks to record-low interest rates and strong economic fundamentals such as the low unemployment rate. Auction clearance rates continue to perform admirably in capital cities. However, the number of properties going under the hammer is considerably fewer than last year. Take for example the Sydney market, which is seeing consistent clearance rates as a percentage in the late 70s and early 80s, and is averaging between 500 to 600 scheduled auctions each week. Compare this to 12 months ago when over 1,000 properties would go under the hammer each weekend at a lower clearance rate. New listings are down across the country too. Sydney, Melbourne, Darwin, Tasmania and Canberra are all experiencing a shortage of new listings, while Adelaide and Perth have seen modest rises in new stock with a 0.9 per cent and 6 per cent growth respectively. Queensland is the strongest market regarding new listings with an 11 per cent upswing. There are three main reasons why sellers are holding off putting their property on the market: 1. The buy before you sell conundrum For many years, and definitely when I was first in the market, vendors were encouraged to...