10 must-ask questions when selecting a property manager

10 must-ask questions when selecting a property manager

If your prospective property manager can’t answer these 10 questions, you may need to find someone else to look after your assets. Ask anyone who’s ever been a landlord, and they’ll tell you that the right property manager can make or break your investment! Choosing the right property manager, therefore, is a pretty important task – and there’s an easy way to cut through all the clutter to find a professional who will properly manage your rental property…interview them! You should ask your potential new property manager the following 10 questions before you even consider sharing a percentage of your rental income: What is your current rental vacancy rate and how does this compare with the market average? How many properties does your company manage in the local area? How will you market my investment property to prospective tenants? Do you have staff who are specifically employed to show prospective tenants properties you have available or is this left to the property manager? What evidence can you provide that will demonstrate the quality of your services? Who will be responsible for managing my property and what is their experience? What arrangements are made to manage my property when that person is ill or on annual leave? Can you detail all your fees and services? What kind of checks do you undertake when determining the suitability of a tenant? Will you provide me with property inspection reports and, if so, how often will I receive...
Use interest rates to pay your loan off ASAP

Use interest rates to pay your loan off ASAP

Now, more than ever, it is important to make sure you have the best interest rate on your loan. Why? The simple reason is that all the lenders play with their rates by varying amounts. Sometimes this is with reason, sometimes without reason, sometimes without telling you and sometimes with telling you. It’s a minefield out there, as rates are reflective of whether you have an owner-occupied loan, an investment loan or a combination of both. The lenders have now started offering interest rates based on risk. The risk can be assessed on location of your property, the type of property you own and/or the loan-to-value ratio (LVR). The higher the risk, the higher the interest rate. But there are lenders out there who can, and will, take on the higher-risk loans at competitive rates. When? We are near, if not already there, at the bottom of where interest rates could head. You need to be in contact with your broker about who is offering what, in relation to fixed interest rates. Fixed rates don’t fluctuate in line with the RBA monthly decisions, they can change up or down at any given moment. How? To take advantage of the fixed rate, and still have the ability to make substantial extra repayments, it is best to split that loan and make it part fixed and part variable. That way you can continue to make the extra loan repayments. If you haven’t heard from your mortgage broker in the last six months, then I’m sorry, you have the wrong broker. As a consumer, you have no possible way of knowing all...
Surging unit supply, the economy and what it all means for investors

Surging unit supply, the economy and what it all means for investors

Expensive housing and high household debt leave Australian housing vulnerable. But without a recession or much higher interest rates a property crash is unlikely. However, the surging supply of apartments and the continuing strength of the Sydney and Melbourne property markets pose an increasing risk. Average dwelling prices in these cities are likely to see another cyclical 5-10 percent price downswing around 2018, with unit prices in oversupplied areas likely to decline 15-20 percent. The combination of high house prices, huge gains in Sydney and Melbourne, low rental yields and a coming surge in the supply of apartments mean property investors need to be careful. Best to focus on undersupplied, less loved parts of the property market. Housing matters a lot in Australia. Having a house on a quarter acre block is part of the “Aussie dream”. Housing is a popular investment destination. And the housing cycle is a key component of the economic cycle and closely connected to interest rate movements. But in the last 15 years or so it has taken on a darker side as a surge in house prices that started in the late 1990s has led to poor affordability and gone hand in hand with surging household debt. Reflecting this, predictions of an imminent property crash bringing down the Australian economy have been repeated ad nauseam since 2003. This note looks at the risks of a property crash, particularly given the rising supply of units, implications from the property cycle for economic growth and how investors should view it. High house prices and high debt The big picture view on Australian residential property is...
Smart things to do with your tax return

Smart things to do with your tax return

It is estimated that more than 70 per cent of Australians receive a tax return each year, and the average return has historically been in excess of $2,000, which is a decent chunk of money! So what will you do with yours? If you are one of the lucky ones to receive a tax return this year, remember that it is part of your hard-earned money and should be treated the same as the rest of your salary or income and allocated to something useful. Don’t treat it as a windfall or a bonus and blow it on something unnecessary. Be smart this year and use your tax return to build your own financial security. Pay off high-interest debt Pay off high-interest debt (such as credit cards) as soon as possible. Often you can be paying interest as high as 20 per cent on credit cards and each month you are simply throwing away good money on interest bills. Invest it If you are getting a sizeable return this year, consider using it towards a deposit for your first (or next) investment property. The best thing you can do is speak to an experienced finance broker who can tell you what you need. Even if it’s not enough to buy a property now, it is certainly a good lump sum to add towards your savings. Pay off your home loan A major goal you should always try and work towards if you want to achieve financial security in life is paying off the mortgage on your own property (or the family home) as soon as possible. The sooner you...
IS AN AUSTRALIAN PROPERTY CRASH COMING?!

IS AN AUSTRALIAN PROPERTY CRASH COMING?!

There is an Australian property crash coming. That’s what several economists and property experts would have you believe — but what would this really mean for your property portfolio? Every few weeks another report is released about a property bubble in Australia and the inevitable market crash it will bring when it bursts. Are these predictions correct and should investors be worried?  Some thoughts. Will Australian property values fall?   Much like you can find a million stories on the next property hotspot, you can find a million stories on the Australian property bubble. There can be no denying that some areas in Australian capital cities appear to be reaching oversupply. High prices and large developments nearing completion in Sydney and Melbourne have been the catalyst for these debates through 2016. But in terms of a crash which would send all Australian property prices plummeting, that’s hard to believe. The result would more accurately be a correction of inflated prices which have grown at an unsustainable rate. Property is always a long term game. If you have done all your financing properly and your due diligence when purchasing, whilst property has the potential to lose value, you will have the ability to hold and move with the next increases in value. What is a property cycle? A ‘property cycle’ is the term for the phases of the property market. At the beginning of a cycle prices are stagnant. Factors that can initiate growth are urban sprawl, a rise in population and or better infrastructure. The next stage prices start to rise. This begins slowly and picks up momentum once everybody...