Buying appliances for your rental property

Making the right decision to maximise your investment returns

Replacing appliances in a rental property is often a huge headache for owners, but it’s all part of your investment business. Making sure you make a decision that is right from an investment perspective is more important than your personal preference.

You need to balance quality, durability and price to provide your current residents and future renters the equipment to ensure they have working appliances.

Practicality and cost effectiveness is the key

Tenants don’t expect all the extras, but they do want a product that works consistently effectively and economically as they are paying the utility bills.

The more features an appliance offers means more things that can go wrong with that appliance. If your property is at the higher end then there is an expectation that a premium brand appliance will be used, but for most rentals go for practical and durable.

It doesn’t mean going for the cheapest however, you need to consider the warranty, availability of parts, costs to service the machine and access to contractors who fix those specific brand of appliances.

Save on energy
Looking at energy efficiency has obviously become a priority. Tenants are concerned like home owners of skyrocketing utility bills. The manufacturers are taking this into consideration and including energy star ratings on their products.

Go to http://reg.energyrating.gov.au/comparator/product_types/ to check out recommended brands.

Consider different model styles

Consider the more economical replacement types for refrigerators, dishwashers, ovens or washers/dryers. Buying an older-styled or refurbished model might save you hundreds of dollars, without sacrificing on quality. These savings can especially be found for refrigerators, where top-freezer models sell for hundreds of dollars less than the more stylish and larger side-by-side or bottom-freezer models.

Get the best price

There are a number of ways to find great prices on appliances. Start with an online search for the base price of a particular model. Pricegrabber.com and Google’s product search are two smart places to check. Once you have a sense of the going price range for a certain appliance, you can begin shopping in earnest.

Look for reduced-price floor models or scratch and dent savings or run out models.

Be proactive

Replacing appliances is a necessary part of being a landlord or property manager. Shopping around early rather than waiting for the call from the tenant to say the appliance is not working will save you time and money.

There is a limited time to get a fix for a tenant, so you want to make sure you are making an informed decision and not one on the run.

At Toop&Toop we have a list of preferred models that fit the criteria and suppliers who can install and service at our fingertips.

Checking tenants' information

On 1 November 2010, the Office of the Privacy Commissioner was integrated into the Office of the Australian Information Commissioner and a new website established at www.oaic.gov.au.

Major changes to the Privacy Act 1988 will into effect in March 2014. Agencies, businesses and not-for-profits need to start preparing for these changes.

Many tenants ask the question - "A real estate agent has listed me on a residential tenancy database. Can I access the information the residential tenancy database holds about me?"

The answer is yes, but there are conditions on it and some are only accessible by agents and/or have a licence fee attached.

All residential tenancy database operators are covered by the Privacy Act. But, sometimes they do not have to give you access.

Giving access may mean allowing you to inspect your record or giving you a copy of it. You may also be charged a fee for access. A fee should not be excessive and you should not be charged simply for making a request for access. 

Some of the major residential tenancy database operators in Australia are:

• TICA (Tenancy Industry database) http://www.tica.com.au/
• National Tenancy Database http://www.ntd.net.au/
• EAC Multilist http://www.eac.com.au/
• Trading Reference Australia https://tradingreference.com/
• RP Data http://www.rpdata.com/

Other sources such as Google, Facebook, LinkedIn will depend on whether there are privacy settings on their website but you would be in dangerous territory publishing anything defamatory.

The golden rule is to check, and then check again.

Tenants turn the tables

Vacancy rates hit an all time high pre Christmas. In previous market conditions landlords have been able to have their pick of tenants, increase rent regularly and were rarely impacted by lease breaks.

This has all changed with the flood of sale properties that have turned to the rental market as their property has not achieved the value the vendors need.

So where have all the tenants gone?

First home buyers are turning away from renting and are becoming home owners, attracted by the lower interest rates and home grants. Compounding this is the increase in unemployment in the highest rental demographic - the 18 to 30 age bracket - as they go back home to live with Mum and Dad. Tenants are now in the box seat when it comes to choice of properties and are offering rents way below the previous market rental returns.

And it's not just in South Australia, many prime rental areas in Melbourne also have homes sitting empty. Landlords have been forced to slash rents as the availability of properties outstrips demand. Diminishing returns has meant landlords are reluctant, and in some cases refuse to maintain properties leading to an increasing number of tribunal disputes.

Residential Tenancies time frames have subsequently blown out and the tenants are commonly favoured when it comes to claims for water or damage.

So who will pay investors mortgages now, as highly geared properties lay vacant and bank fees mount up?

It is important that investors are fully armed with the right information and have access to funding that will withstand market conditions we may have for some time to come. Last year, Toop&Toop partnered with Commonwealth Bank to hold a series of Investment Property  Seminars. The next one is at our Victor Harbor office next Friday, 18 January 2013, 5.30pm – 7pm.

Managing Director of Toop&Toop Real Estate says that the Fleurieu is an ideal location to invest in, and that purchasing in 2013 could prove to be very fruitful.

“We have an aging population who increasingly need to be close to medical facilities, people who are looking for a laid-back lifestyle and activities that are not too expensive. As we age, we also want a quality environment, pretty scenery, to be close to major transport and cultural centres, have all government facilities and support systems readily available... and given that our incomes may be affected, we also need to live cheaply,” Mr Toop said.

“Think about what ticks all those boxes... what is close to Adelaide and has very affordable housing, yet is high class? A place where there are endless activities such as fishing, skiing, sailing, surfing, wineries, tourist destinations, restaurants, golf, bird watching, whale watching, great weather and great scenery? I believe buying here in 2013 will prove very smart indeed.”

Genevieve Toop, General Manager of Sales & Marketing says the event will not only provide valuable information for investors, but that the evening will also be the official grand opening of Toop & Toop’s newest initiative – the Fleurieu Real Estate Gallery.

“We will officially be opening our new ‘Fleurieu Real Estate Gallery’ on the night – a place which will visually showcase what the Fleurieu has to offer in terms of holiday letting, long-term rentals and what is available for sale,” Ms Toop said.

“So if you are in the area, or are heading down to the beach for the weekend, be sure to drop in and find out how you can take advantage of the current market conditions.”

You CAN reserve your place at the seminar online at www.commbank.toop.com.au

For further details, please contact Genevieve Toop on 8366 0811 or 0418 824 178.