Property Management the star of Toop.TV!

On this week's Toop.TV - Toop&Toop's weekly live property update - Kerrie Akkermans, General Manager of Property Management took centre stage and stepped in as host.

Her guests were Toop&Toop Senior Property Manager Debbie Copley and Leasing Partner Sue Belleli.

Toop&Toop's Sue Belleli, Debbie Copley and Kerrie Akkermans

Below are segments of the episode which we think are very valuable for Landlords and Tenants.

Have a look and let us know what you think!

The first segments is all about the proposed changes to the Residential Tenancies Act (this relates to selling a tenanted property, changes to your bond and breaking your lease). To view this segment, follow this link: http://youtu.be/TFVA5KOzkRY

The second segment is about possibly increasing rent prices, the pet bond and when you apply for a rental property treat it like a job interview where you dress nicely and have all of your references in order. This segment is accessible via this link: http://youtu.be/ohYNGuDZEcE

And the third segment is a market update which goes through the vacancy rates:
http://youtu.be/HCKLpWmImuE

Happy viewing property people!

Top tips for dealing with trades people

Deciding on getting building, renovating or repair work done on your rental property is the easy part...selecting who to do it is a different matter.

The cheapest quote isn't necessarily the best, and inferior materials and workmanship can see you paying out far more in the long run.

To find the right trades people is trial and error, but when you find a good one, it is best to stay with them as you build up a relationship on how you both like to work. Build your own list and always have another two to cross compare or call on if your time frames are short and your regular supplier can’t do the work.

1. Check credentials, including registrations and endorsements

It is important to check that the trades person has the right credentials – just because they say they are a builder doesn't mean they are licensed.

Ask whether they have any quality endorsements i.e. ISO9000 or  Master Builders Association certifications.

Enquire if there are any registrations they must have i.e. if your trades person is installing any gas appliances, they must be Gas Safe registered.

Request them to identify any sub contractors they use, as they must comply with the same requirements as the contractor who is the lead on the job that you have the arrangement with.

2. Check they have insurance

Insurance is critical and often forgotten, especially to ask for yearly confirmation. Ensure that the cover is adequate for public liability.

3. Check referencesMake sure you get references. And ask to see previous work – iPhones have it easy to obtain photos and if you can personally inspect their work.

4. Ask for a detailed quoteYou need to be specific in what you want quoted and ask if the type of materials used changes the price and if so, make sure you know what materials are being quoted on.

The labor and parts should be separated out and any contingencies should be stated i.e., if it is a painting job and there is wall paper to remove, make sure it is quoted for if any difficulties arise in removing it.

5. Payment PlanRegardless of what invoicing timing the trades person gives you, ask for staged payments, so you can monitor the work as it is being competed. You can keep them coming back and they have to finish before the last payment is made.

6. Job versus a day rate

If you pay on a day rate then there is no incentive to get the job done in a timely manner, so you are better off getting a fixed rate for a job.

If you are not able to fix prices beforehand, ask the trades person to let you know of any cost over runs before going ahead with the job.

7. Get a written quote

For jobs that run into the hundreds of dollars and above, you should have a written contract with any clauses on pricing differentiation, timings and use of specific materials written in.

8. After the job check the quality

The job should be checked to ensure that the work has been competed to the required skill level and that suitable materials were used. Any supplied goods must be in working order.

If the work is faulty then the trades person needs to fix it before the final payment is made.

9. Payment

Confirm payment has been received and keep a copy of any invoices and receipts for work.

Is buy-to-let still a good strategy?

Buy-to-let has always been an appealing investment option, even more so with the current low rates and the stock market still in an unpredictable state.

The criteria of course is to have a sufficient deposit, so if interest rates move you can still earn a reasonable return on the property as capital value is not increasing to the degree it used to.

Many investors who bought at the top of the boom and with high interest rates are struggling with negatively geared properties. Rental priorities are subject to unexpected costs at any time. If a tenant leaves with unpaid rent or damage that a bond won’t cover the investor is left having to pay out of their own pocket.

However the lower house prices and improving mortgage deals are luring investors once again.

With the flood of sale properties on the market this has meant greater choice for tenants and rental rates have stabilised and in some cases have gone down.

Of course there is no one hundred percent guaranteed return investments for those who prefer property to the stock market then bricks and mortar is still a good option.

That is, as long as you follow some tried and tested rules...

1. Research the market

Make sure buy-to-let is the investment you want. Consult a financial planner to determine where your money will perform best for your situation.

2. Choose an area that has wide appeal for tenants

Wide appeal does not mean most expensive or cheapest. It means a place where people would like to live and this can be for a variety of reasons. 

Is it close to public transport, schools, and lifestyle facilities? Asking yourself the question from the perspective of the potential tenant, not where you would live. But they are probably the most important aspect of a successful buy-to-let investment.

3. Do your sums

It isn't just about "can you afford to pay the mortgage with the rent?" or "can you get the loan?" You need at least three months rent up your sleeve and have sufficient insurance to cover bad tenants or periods without tenants.

Then there are maintenance and upkeep costs. A hot water service will set you back at $1,800 - $2,000, so you need to have sufficient funds to cover it as tenants are entitled to basic services.

A buy-to-let is still a good strategy, just remember to research, find the right property and do your sums.

Home stage your property for maximum rental return

These low cost tips will help you, the Landlord, present your property in its best light. This is critical because if you want to get the most rental return for the property, you need potential tenants to feel that it’s a “not to be missed property”.

Consider the street appeal

Landscaping is nice, but not in everyone's budget. At minimum, lawns should be freshly mowed, and leaves raked. Consider a hanging or potted plant for the entrance. Sweep the porch, deck and all walk ways and ensure that garbage and recycling are tucked neatly away from the front of the house.

Make sure gutters have been cleaned.

Scrub your front door, porch, outside railings and steps. This is cheaper than repainting and makes a world of difference! Once the outside entrance is clean, decide if the paint really needs a touch up.

Get rid of clutter!

If the property is furnished get rid of the clutter.

Office with LOTS of clutter...

...the same office after being de-cluttered - what an improvement!

Turn excess inventory into cash.

If you have a collection of items for projects you never got around to, return them. This also applies to the two-year supply of light bulbs, canned goods or paper products sitting in your basement. You can also put any larger items on Gumtree or eBay.

Watch where the eye goes

There are speedy and low cost solutions to many of the little problems that together make a home seem shabbier than it needs to. Walk along each corridor and into every room and check where your eye is drawn (better yet, ask a critical friend or family member). If the eye is drawn to the chipped white paint on the door frame, take some "white out" and fill it in. If it's those old nail holes in the wall, see if you can hang a picture to cover them.

Find a fix-it person

Ensure cupboards open and shut and that no taps are dripping. Look in all rooms for things you never got around to fixing and decide which ones might be distracting to potential tenants. No, it's not OK for door handles to fall off, even if you have learned to ignore it!

Clean, clean and clean again!

Most mortals can't live in a spotless environment all the time — but it's worth the effort to rent your home for top dollar in this competitive market. You can hire a professional service to come in and deep clean everything.

Untidy hallway...

...the same hallway after being cleaned! See the difference?!

Appliances should sparkle even if you're not including them with the house. After all, you might throw them in later as a negotiating tool. Counter tops, taps, sinks and bathtubs should be shiny and free of water spots.

Dust shelves and vacuum or "Swiffer" the floors. Remember clean windows let in more light and look newer. Hire a service if you have to— it's worth the investment.

If all this attention to detail seems over the top, remember that a very clean home leaves the impression that the house is well cared for. This helps put renters at ease.

Let in some air

Open some windows to air the property. There is nothing worse than walking into a stuffy house or one that smells of smoke and pet odors!

Let in some light

Dimly lit rooms tend to look small and dingy— especially during the day. If you have a particularly dark room, consider investing in better lighting.

With the flood of beautifully staged properties from the sales side flooding the rental market, your property needs to be able to stand out amongst them. Put these tips in place and you should see your property rented quickly let at the rent you want.

Add to your portfolio with this smart investment!

9/34 Byron Road, Black Forest - $255,000

If you're looking for a low-maintenance, single-story unit that looks beautiful on the inside and outside, don't miss the opportunity to check out this charming character unit in popular Black Forest.

This sandstone-fronted unit is perfect for first-home buyers looking for a "home" or investors looking for an attractive, easy-maintenance rental property.

The spacious living/dining area exudes a warm and inviting ambiance and features polished floorboards, high ceilings, skylight, picture rails and a decorative fireplace. It also has a r/c split system and ceiling fan. 

The living/dining area leads into a bright and appealing galley kitchen which has tiled slate floors, ample bench space and is equipped with fridge and washing machine (optional inclusions).

The cosy bedroom is at the heart of the unit with an exposed brick feature wall, ceiling fan and louvered windows.

The bathroom is crisp and appealing with white and soft grey colour tones, a good-sized shower area, pedestal basin, heat lamp, mirrored bathroom cabinet and w.c.

Currently presented as a quiet study area, the alcove is a versatile space. It could be used as a pantry, wardrobe or additional storage space, depending on your requirements.

Another unique feature of this unit is the storage room located off of the main living/dining area. This room could be used for storing a variety of items, such as suitcases, bikes, ladders, etc.

There is also carport which is located to the rear of the property and provides easy access to the unit.

Situated on a wide, tree-lined street, this unique unit is perfectly positioned minutes from shops, local IGA and bakery, playground, bus stop, tram plus train. Travelling by car, it's only 10 minutes from the city. 

This is a delightful offering and definitely worthy of your inspection... 

For more details, please visit www.9-34byron.toop.com.au, or call Debi Zecevich on 0412 170 014 or email her on debi.zecevich@toop.com.au

A tenant's tale of the landlord from hell

David M. Green is a 25-year-old comedian, freelance writer, voice-actor and presenter - originally from Adelaide, now based in Melbourne.

Here is an excerpt from a recent ABC show ‘The Drum’ that scarily has some foundation of truth…

Who hasn't had to deal with a bad landlord at some point? From sparking heaters to pen-operated doors, David M Green shares his own experiences with a less-than ideal landlord.

Being a landlord is like being a parent. No qualifications are necessary. Anyone can become one, no matter what your level of complete incompetence.

And unfortunately if you're the tenant, you're the child in this relationship. If your landlord says you can't dig in the backyard or hang that poster of your favourite band on the wall, those are the rules.

When we think of landlords, it conjures images of Victorian era dandy fops with stovepipe hats, grumbling about the price of coal. But the modern reality is landlords are just regular people. Regular people who own property.

What attracts someone to the wondrous world of landlordism? It's surely the envisioned simplicity of the arrangement - You buy a house or an apartment. Someone else lives in it. They pay it off for you. And you don't have to do anything. Besides watching the rent money roll in, of course.

And even better - after a few years of doing absolutely nothing, your property is worth even more! Sure beats working for a living.

We usually hear horror stories about the Tenants from hell, but I don't think I know a single person who hasn't had to deal with a bad landlord at some point.

Maybe landlords should have to go through the same scrutiny that tenants have to go through before they can enter the rental market?

Bad landlords come in a number of forms. Category one is the "Extreme Lord". Extreme landlords are all over you. They're constantly round at the house, checking things, asking invasive questions, sticking their nose in your business and nitpicking every out-of-place carpet fibre at your all-too-frequent inspections.

One of the worst living arrangements has to be living right next door to your landlord. You're effectively under constant supervision. They know when you're sleeping. They know when you're awake. They know when you're practicing the drums. And if you live next door to your "Extreme" landlord, God help you.

The opposite to the Extreme Lord is the "Shadow Lord". You can never get in contact with the Shadow Lord. They may as well not exist.

If you've got the unfortunate combination of living in a self-managed property under a Shadow Lord, you have my sympathy. There's no real estate agent to help you either. Unless it's to remind you, "You'll have to call the landlord about that." Good luck.

Then there's the "Tight Lord". If they're not avoiding repairs, they're DIY-ing it themselves to save money, or deducting it out of your bond.

I reckon when it comes to tight landlords, my landlord is tighter than a vice made from Chinese finger traps.

When my built-in electric heater started sparking, I immediately called my landlord. His reaction: "Oh, no, you shouldn't be using that. Didn't anyone tell ya?" He then reassured me by promising to "put a sign on it" next time he come round.

No need to replace the heater. Just put a sign on it. I can only assume the sign will say "out of order", though "I need to fix this" would also be acceptable. Eight months later, I'm still waiting for a sign.

When the handle on my screen door broke, effectively locking the door, I was locked outside. Fortunately I had a pen with me, which I used to jimmy open the door. But then I was locked Inside. I immediately called the landlord. He reassured me with some sound advice: "Just keep that pen on ya. And keep a screwdriver in your car."

No need to replace the screen door that could potentially seal me inside my apartment in the event of a fire. Just keep a screwdriver in my car. I used the screwdriver to remove the screen door.

But by far the most entertaining encounter with my landlord came when I finally met him. I'd been living there for 10 months - no inspection, no sign on the heater - when I saw some more sparks. This time they were coming from my circa 1968 fuse box, which proposed a serious fire hazard.

I immediately called the landlord. I suggested a qualified electrician take a look at it. My unqualified landlord insisted he look instead. He came over and literally almost electrocuted himself when he attempted to install a fuse while the main power was still switched on. An electrician was organised within the hour.

So from my ordeal, I can only conclude the way to turn your bad landlord into a good one is through a mild electric shock or near death experience.

Our advice – it’s a funny story just make sure that this isn't you as a landlord.

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.

Safe house-Protecting your Investment Property

Keeping your investment property secure is not just a matter of feeling your property is protected it’s the law to provide adequate security for your tenant. Below is a range of options for home security that you may consider for your investment property.

First line of defence

While alarms are great, you should think about preventing burglars getting into your home in the first place. Most break-ins occur through a door, so the key to good security is a good lock. A keyed entrance set gives minimal security. A step up is a night latch, but deadlocks and dead latches provide more security. (Better Homes & Gardens, 2012)

Window locks & Screens

In an investment property you need to ensure your windows are secure for a tenant, they do not need to be key locked but they you need to make sure from a shut position they cannot be opened. Window screens are also a great way to secure your property from potential intruders when the window is open. There are many types of windows in various materials, such as timber, aluminium, PVC and steel, and they all work differently and need different locks to secure them.

Security screens

A second line of defence at any entrance is a security screen door. It should comply with the requirements of Australian Standard 5039-2003, while AS 5040 specifies how it should be installed. Security screen doors are ideal for the front and back main doors; they can keep the property safe and can be locked if the main doors are open. A security screen door allows you to safely see out, while stopping unwanted people from getting in. It also provides ventilation and lets cooling breezes into your home. (Better Homes & Gardens, 2012)

Door locks

1. Night latch Night latches are surface-mounted and not lockable on the inside, so you can easily get out of the house in an emergency. But a burglar can also open the door from the inside once they’re in.

2. Deadlatch and deadbolt A deadlatch, such as the Whitco Deadlatch (about $80), is similar to a night latch but is keyed on the inside. This means a thief needs keys to get out of the door. But the key also needs to stay in the lock at night in case of fire, unless the deadlatch has an emergency release. A deadbolt fits inside the door, with the bolt thrown by a key inside and out.

3. Deadlock A deadlock, like the Lockwood 355 Deadlock (about $140), is similar to a deadlatch, but the lock engages with the keeper, so it also works on sliding and double-opening doors. And when locked, the lock and keeper can’t be separated.

Alarms

If you are unfortunate enough to have intruders actually get into your home, your next defence is an alarm (or a hungry Rottweiler). Alarms range from basic beepers to sophisticated multi-thousand-dollar systems that alert a base station. But, you can make a loud noise with an inexpensive system.

Swimming pools

Legal requirements:

Swimming pool safety

As a swimming pool or spa owner you are responsible for safety.
Drowning is the biggest cause of accidental death for young children.  Most occur in private backyard swimming pools. You can reduce the risk of accidents occurring in your swimming pool by adequately fencing your pool and ensuring young children are supervised at all times.
In a life-threatening or urgent situation phone the emergency services on 000.
Fencing

All swimming pools must have a continuous safety barrier maintained by the pool owner that restricts access by young children to the pool.

If you are a property owner and are selling a property with a pool built before July 1993 you must make sure that the safety barrier meets todays standard for new pools.

Fencing must be constructed in such a way to make sure that:

·         the outside of the fence is an effective barrier to young children

·         it is permanent

·         young children can't crawl under or climb over it by using foot and hand holds

·         it is at least 1.2 metres high

·         any boundary fences used as part of the child-safety barrier are at least 1.8 metres high on either side with a 900mm non-climbable zone. The non-climable zone may be located at the top inside of the boundary fence if the fence is at least 1.8 metres high on the inside.

Gates to the pool area must:

·         swing outward from the pool area

·         be self closing from any position

·         be fitted with a latching device out of reach of small children at least 1.5m above ground level.

Hard covers on spas 

Child resistant hard covers cannot be used as safety barriers in place of a fence for above-ground spa pools because:

·         there are no current regulatory standards for spa pool covers

·         when the cover is off the spa pool there is no barrier.

Filtration

In-ground or above-ground swimming pools and spas must have a water recirculation and filtration system that complies with Australian standards  . This is to reduce the risk of a young child being trapped by suction.

(OCBA, 2012)

Salt vs. Chlorine:

Salt Water Pools Cost Less

Salt water pools cost less than chlorine pools. Chlorine pools require the addition of chlorine tablets to the water, and these tablets can cost upwards of $60 or more per bucket. The use of chlorine tablets is essential to the cleanliness of a chlorine pool. While it may seem that chlorine pools would be more sanitary than salt water pools, this is not the case. Salt water pools use an electrical charge to split the salt into sodium and chloride. This electrical system basically creates chlorine by changing the chloride into a gas, which then dissolves into the pool's water. Through this process, the pool is sanitized without the addition of chlorine tablets.

Salt Water is More Comfortable

Chlorine water can be irritating to the skin, especially to those with sensitive skin, and it can also be offensive to the senses because of its strong odour. Furthermore, chlorine can be an ear and respiratory system irritant as well. Because salt water pools do not require the addition of chlorine tablets, the pH of a salt water pool is increased. This translates into water that does not irritate the skin or cause burning, itching, or drying. Swimming in salt water pools Brisbane is more comfortable, and the chlorine odour is reduced dramatically.

Salt Water Pools Require Less Maintenance

Homeowners can spend less time making efforts to maintain their pool and more time enjoying it when they choose a salt water pool versus a chlorine pool. Because the pool's electrical system supplies the water with chlorine, homeowners do not have to worry about routinely adding chlorine tablets to the water. Salt will need to be added to the water from time to time, but the comprehensive care required of a salt water pool is minimal compared to a chlorine pool.

(John Clarkes pools & renovations, 2012)

Keeping it in the family- Should you rent to family or friends?

There seems to also be a lot of controversy around renting to family or friends and everybody has an opinion on whether or not it’s a good idea. There can be benefits and disadvantages to having a close friend or family member as a tenant, regardless if it is through an agent or self managed.     

For most landlords it is the comfort of having someone you know in your property. It really is the best reference and background check you could have to know your tenant personally before putting them in your property, and with friends or family this is possible. 

“Renting to a family member or friend may seem like a good idea at first, but all too often the tenancy ends with one party feeling like they were taken advantage of, or neglected”    (Salvatore Friscia, San Diego Premier Property Management, San Diego, CA, 2011).

Issues:

“In some cases the owner/landlord will typically relax qualification measures and make concessions based on the relationship, including not requiring an application, security deposit or even lease agreement. This may seem like the owner is doing the tenant a favor allowing for an easy rental arrangement, but in actuality both parties are now at risk without contractual agreements in place detailing the tenant’s and owner’s rights and obligations.”  (Salvatore Friscia, San Diego Premier Property Management, San Diego, CA, 2011) So ensure you follow all typical procedures including reference checks, lease agreements and security bond deposits.

Friendship or landlord/tenant relationship:

There is a big difference between a friendship and a landlord/tenant relationship. Understanding this difference can be difficult because suddenly you have wants and needs in relation to your property which may not coincide with your tenant’s wants and needs. For example you may have never had issues with renting your property without air-conditioning but now your friend wants it and expects that you understand why. On your hand you do not want to pay for a cooling system when you could have found a tenant without it. The lines of friendship are blurred because of your personal relationship and want of understanding from the other party.    

Expectations:

Will you be lenient on the tenant? Do they expect that you will? The expectations from each party could differ. There needs to be clear expectations set from the start so you are both aware of what is to happen.  Let them know you want the rent on time and wont accept excuses, conversely the tenant will expect you to respect their privacy, not to show up unannounced or too regularly.

Is your perception of what is clean the same as theirs? Will they look after the garden like you expect they will?

Benefits:

You know the person in your property and trust they will look after your property. There is a certain amount of security you feel knowing the person well and how they live.  The tenant will also feel comfortable dealing with a landlord whom they know and also trust to look after there needs during the tenancy.

Not all situations have a negative outcome however the downside of a negative experience may cause long term consequences that can affect relationships and family ties.