DIY Property Management – Here’s What NOT To Do!

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Are you considering doing DIY Property Management?  If so, here’s what not to do!

When it comes to choosing a Property Manager to look after you rental property, you get what you pay for!  Yes, it does cost a management fee.  To have a trained, experienced and dedicated Brisbane property manager from Position One manage your rental property and tenants on your behalf is a blessing.  So we always explain that over the longer term, there is huge benefit from using the best property management team in Brisbane!

What is DIY Property Management?

Do-it-yourself or DIY Property Management is when someone has chosen to manage their own rental property.  This includes everything associated with dealing with tenants, collecting the rent, managing repairs, lease agreements, and advertising by themselves.  No doubt, there are many property owners who have been tempted to handle the management of their rental properties by themselves.  And when you hit that “sweet spot” with low maintenance costs, and low vacancy rates, all is well.  Then it can seem like property management is a pretty straightforward job – right?  But beware when it comes to letting down your guard and thinking it’s easy.  Because there are more than just a few tricks when it comes to managing a rental property!  Especially when it comes to making sure that you don’t get stuck with a vacant property for an extended period.

DIY Property Managment– what not to do!

Fair enough, DIY Property Management can save the money and costs associated with paying for a professional property management agent. But that doesn’t mean that you should try to cut corners at every opportunity. If you are doing DIY Property Management, you do need to stay up to date with the legislation regarding leasing and rental properties. There are always changes and updates to the legislation.  Two such examples are around smoke alarms and pool fencing. In fact, we think it is important for all property owners to stay up to date with property ownership guidelines and policy.

A Rental Property is not just an investment

DIY Property ManagementA rental property is actually someone’s home.  At Position One, our property management team applies this fact to all of the properties we manage. We respect our residents and our owners.  In accordance with the Queensland property leasing legislation, Landlords are required to provide a comfortable, safe and secure property when rented out to tenants. So any DIY Property Managers cutting corners with the standard of their property, there are pitfalls. Consider, for example, if you lease a property, say, with an air conditioner.   You must maintain the air conditioner in good working order. If a tenant signs a contract with a working air conditioner, then they are legally entitled to have that air conditioner maintained and operable for the term of the lease.

Can you devote the time needed for Property Management?

It pays to stay in regular communication with tenants, and to maintain regular inspections of a rental property. It can be tempting to just leave things meander.  But that is simply not good management. It is also unrealistic to expect a tenant to provide an inspection with short notice, or just whenever it suits. That is also not good management, nor permissable. Often, our property managers have to make themselves available whenever the tenant is available for a general discussion about the property, or to conduct a property inspection. But that is our policy at Position One, and that is all about good property management. Then there is attention to detail.  When it comes to collecting the rent, dealing with rent in arrears, managing the lease agreement, and meeting all of the maintenance requirements and tenant requests, attention to detail is critical.

Be aware of the hidden costs

DIY Property Managers need to be aware of the implications of attending to property maintenance, as well as tenant requests for repairs. Trying to cut maintenance costs or ignoring tenant requests can cost more in the long run. For example, there have been cases where the tenants can lawfully break contract if the conditions of the lease agreement have not been met. This can leave an unexpected vacancy and end up costing you more than the initial cost of maintenance.

Make sure the property is safe and secure

There is no excuse for not providing a rental property that is safe and secure. Failure to provide this can end up costing landlords a lot of money when it results in extended vacancy. But that is not the only hidden snag for DIY Property Management.  Because they are actually lawfully required to maintain the rental property in a safe and secure condition on behalf of the tenant, once a complaint is lodged, the matter can become serious. For example, there are many hidden snags for landlords.  These include deadlocks on doors, safety screens on windows, child locks on balconies.  Pool fence certification, smoke alarms and earth leakage detectors are also critical aspects of the property. These are not just nice to have features.  They are all covered by various forms of legislation, and are not worth trying to cut corners on.

Insurance

As a DIY Property Manager, we recommend that you never try to cut costs when it comes to insurance for a rental property. Landlord insurance costs a little extra.  But without it, you can be left with a huge liability. If tenants leave you with a repair bill, then insurance may help you get a property back to a condition to lease. Without it and you are left with an extended vacancy. Then there is the matter of landlord liability insurance. If you don’t know what this is, then we recommend that you check immediately to determine whether you have protection.

Getting the wrong tenant

One of the most critical risks for DIY Property Management is getting the wrong tenant. This problem can involve lots of work – and headaches. Unhappy tenants usually need more repairs, more attention, more communications, and more administration. There is the risk that they will not renew the tenancy.  So the consequence is higher vacancy rates. If the rent is too high, the vacancy rate will be higher. Should the maintenance is not kept up to date, there is a risk of complaints being lodged. As a DIY Landlord, there is always a risk of managing an unhappy tenant which can result in an unhappy Landlord!

At Position One, we find the best tenants

Here at Position One Property management, we have a philosophy that we match the correct tenant with the best property. This means that we have a thorough process of getting to know the tenants we look after.  That means knowing what their preferences are, and what type of property is best for them. When we have an upcoming vacancy, we put the process of finding a tenant into full swing, before the vacancy even happens. That means we have time to find the perfect tenant for any property, at the right time every time! How many DIY Property Managers can spend the time to get the right tenant? Because we spend the time to get the right tenant, we have a proven record of reduced vacancy, and above average tenant satisfaction.

Happy tenants, happy owners

Here at Positon One, we aim to keep our tenants happy, which is the best way to keep our property owners happy also!

How many doing their own DIY Property Management would like a deal like that?

School Catchment Area Investing

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Are you ready to take the plunge and buy an investment property? By now you’ve probably done your research and have looked into property types.  You’re sure to have calculated load repayments, insurance costs and other details of being an investment property owner. It’s an exciting time! One thing that often gets looked past when searching for investment properties is the ‘School Catchment Area’ that the property is in. If you don’t have kids, you may not have considered school catchment area investing.  However, considering school catchment areas before making such a long-term investment may be more important than you might realise!

What is a school catchment area?

School catchment areas are locations that determine where children are eligible to attend school. Eligibility is based on distance and area from the school. Catchment areas change slightly from district to district. However, the general rule across Australia is that children who live within a certain distance and radius to the catchment zone are able to attend the school. Often it is difficult or impossible for children outside of these catchment zones to attend a certain school. Unfortunately, there are more and more stories in the news about families trying to evade the system.  Typically they do this by directing their mail to other people’s addresses within the catchment zone. This kind of behavior is bound to be stopped by the government at some time.  So it’s crucial to research the catchment area before purchasing your property!

school catchment area

Go into purchasing your investment property with wide eyes open

Informed decisions are better decisions.  So we’ve put together some information in regards to school catchment areas.  Furthermore, we’ll point out how they could potentially affect the housing market in that area. This information is also important if you have children, or plan to in the future.  Because where you buy a property could affect where your children can go to school.

Disclaimer – We are not financial advisers, we are simply using our knowledge of real estate to help others go into purchasing a home with all the information they need to make the right choices for themselves.

How does a school catchment area affect someone buying an investment property?

Are you wondering this? How does the school catchment zone affect your investment property if you don’t have any kids? Furthermore, you may never plan to have kids, so what’s the point?  Well, believe it or not, the school catchment zone can have an enormous effect on the housing market. Schools change from area to area.  Most noteworthy, often there is a noticeable gap in quality between certain schools. This makes the schools within that area more highly sought after.  Hence, more people will be flocking to that school catchment zone to send their kids to the best school that they can.

These ‘higher quality/more sought after’ schools will put pressure on the housing marketing in those areas.

Purchasing a property with rental return in mind

When you purchase a property in a highly sought-after school catchment area, you will likely be in a better situation than if you were to buy in one that is in a very undesirable area. A lot of the time, families will decide to rent in these specific areas.  Afterall, kids are only kids for so long! Often these families opt to rent instead of purchase.  This is so that when their kids are old enough they can purchase their dream home in a location of their choosing without the pressure of finding a good school catchment zone!

Consequently, these areas will always be in high demand.  The result will likely mean there will be little-to-no downtime with your investment property.  It wont sit empty for long periods of time while you wait for someone to take an interest in your place.  Rather, they will be coming to you, applications in hand!

As already stated, we are not financial planners or advisers.  However our years of experience in the industry have given us some insider knowledge that we like to share with our potential clients.  Informed decisions are better decisions.

Make it easy for the renters!

Here is another way to keep your investment property in the highly sought after category, and keep renters interested.  Do the research on the school catchment area yourself. Often schools in these areas have strict regulations.  Generally, they will need specific documentation to prove that the child and family are actually living in this area.

This research and data collection may be rental receipts, utility receipts or references.  If you do the research before hand you will likely have some very happy renters on your hands. This means you can also let your real estate agent know what needs to be provided so that the renters can go straight into the school with the appropriate documentation.  It’s a win-win!

Housing type – new or fixer-upper?

Another thing to consider is the style of investment property you want to purchase. Newer homes will obviously be more expensive, especially in highly sought-after catchment zones.  However, they will most likely require less work before they are ready to rent.  Investment property depreciation laws can also work in your favour here.

Older homes are likely to be cheaper and can be a fantastic investment in highly sought after areas.  This is especially relevant to investors, since the return will likely be high. It’s important however that you do your research when it comes to fixer-upper style homes. Sometimes these homes require so much maintenance and renovations you could find that your sweet little investment has turned into a bit of a renovation nightmare.

Have qualified inspectors come in and assess the property before you make any purchases.  This is essential to be sure you’re getting your money’s worth and are likely to see a return in the future!

So what now?

Now that you’ve read about school catchment zones and the importance of doing your research and finding out the right areas for investment properties (or family home!) – where do you go from here?

When you start researching locations, make sure to really examine the school catchment area.  Take the time to figure out where you want to land! This is especially true if you are wanting to make a return from tenants and/or you have children that will be going to school.

For more information regarding school catchment zones, you can find the Queensland map here.

We hope this information was helpful! If you would like to learn more or get started with your investment property purchase – we invite you to call us on 3843 4511.  Our friendly and capable staff look forward to hearing from you!

What Do Tenants Look For in a Rental Property? And Why is it Important They Are Happy?

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What Do Tenants Look For in a Rental Property? And why is it important that they are happy?

The world of property ownership might seem scary when you’re making a huge financial investment.  While you’ll be excited, you may be unsure if it’s what tenants will snap up off the rental market. If you have decided to take the plunge and become a landlord – congratulations!  If you’re seeking some sure-to-be perfect tenants, you will likely be wondering how quickly you’ll find them. Getting a perfect fit for your property requires choice of applicants. To make sure your property is appealing to as many applicants as possible is the goal.  We’ve complied a checklist so you can ensure your property is what great tenants are looking for.

Why are good tenants important?

Before you start thinking of the types of tenants you want and what they are looking for, consider this.  It is important to understand the value that good and happy tenants can bring. That might sound pretty simple.  But tenancy is a two-way street.  So it’s important you have considered the benefits to you as the property owner.

When you have tenants that are happy with their space and the services that are provided, they will want to keep that status.  They are just as likely going to want to keep you, as their landlord, happy. When both the tenant and landlord are happy and comfortable with the arrangement, it’s a win-win.  You are then more likely to have yourself a long-term tenant who loves and takes pride in the home.  There’s nothing better than a sense of trust, when such a large investment is involved.

What do tenants look for in a rental property?

Location

Location is one of the highest priorities for those who are looking to rent. So as a buyer and potential landlord, take note.  Investing in properties that are close to amenities and facilities that the average person wants, can be a huge advantage when it comes to renting out the property. Things like grocery stores, schools, parks, restaurants, cafes and convenience stores can be an absolute deal breaker for a lot of renters.  It is essential to do your research before you buy!

Also consider the types of applicants you’d like to attract. If you’re seeking young professionals, public transport and close proximity to cafes and restaurants are a must. If you’re looking to attract families, schools and parks might be more attractive.

what do tenants look for in a rental property

Fresh air

Living in the ‘Sunshine State’ certainly has its benefits. One of these is the beautiful summer weather! Brisbane summer time is filled with sunshine and beautiful Summer breezes.  This is like gold to tenants just like it is to you in your own home! It’s no surprise that renters these days are looking for properties with balconies or outdoor areas.   This is so that they can feel the sun on their skin make the most of those beautiful summer days!

Property developers are aware of this trend. A lot of new apartments and townhouses are being built with entertaining balconies.  So this probably won’t be particularly challenging to find a great place for sale, with access to outside or a nice flow of breeze throughout the home.

Air-Conditioning

Not all apartments can have the window spot or access to a pool! Air-conditioning has become popular in newer buildings since so many renters are looking for it. The tenant will pay the power bill.  So the installation of an air conditioner can make your property much more appealing.  While you’re up for the initial investment, it is a comparatively small cost in the big scheme of things.  Note that capital improvements can be included in a depreciation schedule for tax return purposes.

Storage

Since a lot of people rent for a long time before they consider buying a property themselves, it’s natural that they will accumulate a lot of stuff in that time! That’s why a lot of renters are seeking out places that allow them to store it all, and more. While apartments seem to be getting acceptingly smaller, storage space shouldn’t be sacrificed. Things like cupboard space, extra rooms, and study nooks can really make a difference to the practicality of the space. It also means the person renting can store their collected possessions neatly, without adding visible clutter to the home.  Kitchen storage can be particularly desirable for some renters.

Safety and security

Sadly, even the safest neighbourhoods can see the occasional bout of crime. It’s generally nothing to be worried about.  However it’s nice when tenants can relax knowing they, and their possessions, are safe inside the home. Investment properties are being built with a lot of security measures in place to anticipate the demand for security. When buying a property, look for things like secure parking, toggle access (security key for life access) that only the renter has use of, and secure windows. These can all make a difference to how the tenant feels in the rental property.

A good relationship with the landlord and real estate agent

Last but definitely not least, a good relationship between the landlord, real estate agent and the tenant is absolutely one of the top priorities for a renter. When there is a good relationship between this trio, there is likely to be a high level of trust and communication.

This means that if there is anything that needs to be fixed around the home, the tenant can comfortably reach out to the agent without letting ongoing damage occur. This calm and confident approach will lead to the landlord being more aware of the condition of the property. This is an absolute win-win for all parties!

Our Services

At Position One Property, we pride ourselves on maintaining effective relationships with landlords and tenants. We believe that trust is important and we value communication. We like to keep an open line of communication between landlords and tenants and seek to make sure everyone in the situation is comfortable and happy!

If you want to become a landlord and take the next steps into buying an investment property, we can help make the process easy for you! With our 15 years of experience in the business, we know what tenants are looking for and believe that good communication and trust between all parties means that you can sit back knowing your home is taken care of. Call us today on 07 3483 4511 to chat to one of our friendly staff.

 

Investment Property Depreciation

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Do you know about the way that depreciation can help to increase the return on property investment?  Yes that’s right! Even though depreciation implies that the value of your asset is going down, this can still save you money!  The important thing to realise is that when it comes to property, the value rarely goes down.  Unless you buy at an inflated price, or suffer a localised downturn, most properties will appreciate over time.  The time period for appreciation can vary greatly, so endeavour to become well educated.  Diligence and unemotional analysis are amongst the traits of successful property investors. So how does investment property depreciation help the property investor?

The tactic is to claim on income tax

One of the ways to maximise the return on property investment is to make sure you are aware of all the potential tax claims against investment property.  When you earn income from a rental property, most of the earnings are needed to cover the expenditure.  Expendiure goes on rates, taxes, insurance, maintenance and of course the interest payments on the mortgage.  However, sometimes these costs can be higher than the income.  This is known as negative gearing, and it can seem a little daunting at first.  But never fear!  There can be some advantages to owning an investment property which is negatively geared. In order to meet the payments and costs of maintaining an investment property, you will need to be able to sustain the negative amount from other means of income.

But the amount of negative gearing can be tax deductible from your income.  This means that at the end of each financial year, you can claim back the tax deductible portion from the tax department.  This is where you will need to locate a property-wise tax accountant.  By ‘property-wise’ we mean ideally a tax accountant who invests in property themselves.  Ideally they will specialise in tax returns for property investors.  That way they will know the applicable tax laws and know what you can and can’t claim.  Each individual has specific circumstances.  We can only give the general guide here and suggest you find a specialist tax accountant to help you!

Investment Property Depreciation

Investment property depreciation is tax deductible also

Not only is the amount of the negative gearing deductible, but so is the depreciation of the asset.  So the depreciation of the asset is usually calculated at something like 4% of the building cost over the life of the investment property.  So if the building cost $100, 000 to build, then you are able to claim a depreciation of $4,000.  Not only is depreciation calculated on the building, but also on some of the fittings within the investment property.  For example, the floor coverings, light fittings, window coverings, and air conditioners are all claimable.  When you think about it, all of these property fixtures will need to be replaced over time.  So it’s logical and it’s also a good way to save up for the replacement.

Investment property depreciation varies greatly depending upon the age and nature of the property.  When a property changes hands (is sold), the investment property depreciation situation changes again.

Find a good taxation specialist for advice

As with any financial advice, you need to consult a specialist.  We recommend that you check the details any investment property purchase with a qualified professional.  When it comes to buying a rental property, you can’t be too cautions.  It pays to seek professional advice to maximise the return on property investment.  There are many variables that are important to finding the best investment property.

Of course, you need an expert structural inspector, you need a property conveyancer, you need a qualified pest inspector.  To ensure that you can claim all of you tax entitlements, it is always good to use a tax accountant who understands how to maximise the return on property investment.  To find a good financial advisor, ask them to discuss the list of depreciable assets that are applicable to your investment property.  Find a tax accountant or financial advisor who is willing to work for you and to maximise the return on your investment.

Engage a good property manager

Not least of all it is critical to make sure that you choose the best property manager.  We recommend that you choose a professional property manager to look after your investment.  This is to make sure that your rental property is well maintained, professionally marketed and closely managed.  Here at Position One, we take the time to understand the needs of every property owner. Whether our client is a property investor or are leasing out their family home, it’s equally important to us.  Either way we work smart to understand how we can help you to maximise the return on your property.

Here at Position One Property, we live and breathe love real estate.  To meet you and get to know you, we offer an obligation free rental property appraisal.  We can inspect the property and provide an accurate rental assessment, condition appraisal.  Although we are not able to advise as a taxation specialist would we can discuss in general terms the potential for investment property depreciation.  After all, when you buy a rental property, you certainly need to know how to get on the right track to maximise the depreciation on your investment property.

Return on Investment Property – How to Get it.

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Are you looking to add to your investment portfolio?  Want to know what to look for in a good rental property?  Want to achieve a good return on investment property?

Without a doubt, one of the best ways to find a good deal on an investment property is to choose a property that is easy to rent out.  But how do we find a good rental property from the huge number of properties for sale?  To earn a good return on investment property, we need to select good fundamentals. Such as clean interior, fresh paint, new floor coverings.  The simple essentials need to be covered. Doors and windows that work properly are always a good tip that tenants like.  Doors and windows that lock securely are even better!  Sometimes these are the things that we overlook when searching for our own property.  We think we can always fix these little things later.  But these are things that a tenant needs and expects.  The simple essentials are highly desirable features to tenants and help to increase the return on investment property.

A good rental property might not be the same as a property we choose for ourselves to live in

The trick is to make sure that you choose an investment property that is ready to rent out straight away.  If not immediately, very, very quickly.  The best way to increase the return on investment property is to put in up on the rental market as quickly as possible so that it can start to earn you money.  Although it may seem like a good idea to buy a renovator that is under market value, you have to make sure you can fix it up quickly.  We have seen renovation projects that can transform a property from an ugly duckling into a fabulous property.  But if this takes too long to complete, then it may not provide the best return on investment.  Remember, there’s capital value return and cash flow return.  Typically, good return on investment property has enough of both!

Return on Investment Property

Choose good fundamentals for return on investment

Rather than choosing an investment property based on all the glamorous fittings and finishes, let’s stick to the expected essentials.  We believe that the best return on investment property comes from the fundamentals.  This means that good solid foundations, structure and roof can add more value in the long run.  Many people focus on the kitchen appliances and how new the bathroom fittings are.  But these may not always the most important features when it comes to a good rental property.  So the opportunity for property investors is to locate a property that is structurally sound rather than glitzy.  Better still, if you have the opportunity to instantly add value, you can.  If you add a nice new coat of paint and floor coverings, then you have the fundamentals for a good return on investment property.

Find the best bang for your buck

While this may seem like a cliché, there is definitely potential here to create a good return on investment property.  For a thousand dollars, you can take a diamond in the rough, and polish it beautifully!  You would be amazed how a new coat of paint can lift a property in a short space of time.  And paint is cheap!  A few floor coverings, and maybe some new window coverings, and you can dramatically increase your return on investment.  The difference here is that you can do some of these improvements yourself, and very quickly.  Remember the trick is to get the rental property onto the rental market as quickly as possible.

You can engage us here at Position One Property Management Agency even whilst doing the repairs.  We can advertise the property and go through the selection process before you have even finished.  Often we can have a tenant ready to move into your investment property straight away.

Don’t get stuck with problems

The most run-down property witht the most work needed is not necessarily the best investment.  No matter how cheap it is, or how much potential there is.  The worst problem you can find yourself in is extensive structural repairs.  If too many renovations are needed, you’ll probably run into problems with time and budge.  Your investment property will remain empty during big and long renovations.  Furthermore, no-one is interested in inspecting a work site, no matter how good it will look after completion.  Likewise if you find structural issues after a tenant moves in.  There are too many other rental properties to choose from and a tenant will simply look elsewhere.  It is all about finding a property that is easy to find a good tenant, rather than simply trying to maximise the weekly rental.

Choose a good property manager to increase the return on investment property

Here at Position One, we understand how the rental market works.  We understand what our tenants require from a property.  And we understand how to achieve a balance between needs and desires.  A good rental property needs to be clean, fresh and well maintained.  In order to maximise the return on investment property, we strive to keep our tenants happy, as well as managing each investment property to the owners requirements.  If you want to maximise your return on investment property then call us at Position One – 07 38434 511 and we can arrange an obligation free appraisal.

DISCLAIMER: We are not financial advisors and none of the information provided here is offered as financial advice.  It is up to you to seek your own independent financial advice.  We do recommend seeking the services of a qualified and experienced Tax Accountant.  They should be an expert in dealing with property portfolios, and ideally is a property investor themselves.  This is a general overview of rental property investment opinion and the details vary with each person’s situation. You may find this link helpful https://www.tpb.gov.au/qualifications-and-experience-tax-agents 

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How Tenant Screening Can Make Your Life Easier

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All property owners know how much easier and simpler life can be when you have great tenants.  At Position One Property Management, we believe in people.  We believe that it is our interactions with people that shape our future relationship with people.  We believe that if we treat other people well, then those people will treat us in the same way.  This is a simple philosophy to find the best tenants for our managed properties, and it works incredibly well.  When we conduct our tenant screening, it is all about meeting with prospective tenants.  We meet in person to spend time discussing their requirements, and their desires.

Our tenant screening process is not about testing who is “in” and who is “out”.  When we understand each other better, we are able to match the best tenants with the best properties.  This is important as well as maintaining a mutual understanding of each other’s wishes.  As a landlord, you want the best tenants, and as a tenant, you want to live in a nice Brisbane property.  At Position One, we get that, and our mission is to make sure that happens!

How to screen your tenants

Here at Position One Property Management Brisbane, we use a tenant screening checklist where it applies to screening tenant applications.  We understand what our landlords expect from our Property Management team.  In addition to that we know how conduct tenant screening to provide the best outcomes for everybody concerned.

Our tenant screening process is all about meeting people face to face.  We work very hard to understand the true desires of people.  We understand that everyone has an individual set of personal requirements.  Fortunately this is just the same as every property is unique in what it offers!  So our tenant screening checklist is more about matching people’s needs with the benefits offered by any given property.  Our tenant screening process is all about developing and maintaining a relationship with our tenants.  We also work hard to keep the relationship on good terms, with open lines of communication.  It’s also about maintaining a productive relationship with our landlords.  This is to ensure that everyone achieves the outcomes they desire.

Tenant Screening

Our tenant screening process gets great tenants

Our experienced and switched on team of Brisbane Property Managers trust our tenant screening process to find the best tenant for every property we manage.  The temptation to accept the first tenant is not always the best way to avoid vacancy.  For example, if you find yourself with an extended vacancy, there is always pressure to jump at the first offer.  But if the first offer cannot afford the rental payments, or if they only need a short term rental while waiting for a better opportunity, then you may quickly find yourself with another vacancy.

The better option is to trust our tenant screening process, which matches the best tenant to your long term requirements.  As a landlord you can often save money in the longer term by accepting a lower rental rate, with little or no vacancy.  If you continually find yourself with vacancy problems, then this may be a problem with the tenant screening, rather than a problem with the property!

Questions on the tenant screening checklist

Most of the questions on the tenant screening checklist are not actually asked of the prospective tenants!  So how do we screen our tenants?

Our Property Management team spend the time to thoroughly check all details provided at the time of application.  How?

We:

  • actually do ring up the referees during the tenant screening process;
  • take the time to verify the statements made on application forms;
  • verify the payment history with the previous property manager;
  • check whether the previous property was left in good condition;
  • confirm the employment history of our prospective tenants for proof of income;
  • check for identification of all names on the application form.

What is the purpose of screening tenants?

Some of the questions can seem to be a bit of an inquisition, but this is not how it is intended!  The purpose of our tenant screening process is all a part of the process of building a relationship with our tenants.  There are no questions on the list that we cannot show the tenant, and there are no secrets that we try to hide from anyone.  Here at Positon One property management, we have a database of tenants, and we have a database of landlords. It is our responsibility to make sure that we match the perfect tenant with the right property.  It is also our responsibility to maintain that relationship to ensure that everything works out the best for both parties.

We invest our time in tenant screening, so you don’t have to

All of this tenant screening process takes up the valuable time and effort of our property management team.  So we respect that time, and we ensure we do it properly.  We know that with a successful tenant screening process, we can always find the perfect tenant for your property.   Getting the best tenant for your property can make all the difference, and can make a landlord’s life much easier.

Tenant Screening Checklist for Landlords

There is more to finding and screening tenants than just finding who can pay the full amount of the rent.  Here at Position One Property Management, our tenant screening process involves a whole lot more than just that criteria!  For example, all landlords prefer a tenant who will look after the property, stable long term tenancy, and who will continue to meet the rental payments into the future.  So here is a few of the key elements on our tenant screening process:

Tenant screening selection criteria.

This is a set of selection criteria which the prospective tenant should be able to meet.  The criteria should include things such as satisfactory rental history, stable employment prospects, family status, and even their requirement for pets.   At Position One, we always like to state up front that prospective tenants are required to submit a rental application, and background check.  In this way, we tend to receive only the quality applications, with nothing to hide.  At the end of the day, it is all about open and honest communications with the property manager!

Establish a relationship with a prospective tenant.

Right from the very first inspection, phone call or even an email, we begin the tenant screening process, in terms of establishing a relationship.  We will begin to understand the requirements of tenants at the earliest meeting by discussing things like how much rental can they afford to pay, what kind of job they have, what type of property they like, and whether they are open and honest with communications.

Formal application for tenant screening.

One of our main tools during the tenancy screening process is to request a formal tenant application.  In this way, we have a record provided by the tenant themselves of their ability to meet the long term stability that landlords are looking for.  We also find that many prospective tenants who are trying to hide something will not apply.  In this way, the most significant part of the tenant screening process has been achieved, based on trust.

Verification of tenant screening.

Once we have received a formal application, we spend the time required to verify all of the important aspects of the tenant.  By the time we reach this stage of the tenant screening process, we are looking to confirm many of the personality traits, in order to build a relationship with the tenant.  We also spend the time to check with previous landlords, employers, and other personal references.

Tenant screening is not about accepting or rejecting.  Here at Positon One Property Management, we believe that we can reach a favourable outcome for all of our landlords and our tenants.  If we feel that the first applicant is not the preferred tenant, then we have a transparent and honest feedback policy.   Part of the tenant screening process is to explain to both parties how we intend to match the best tenant with the perfect property.

Great tenants are out there – but you need the best tenant screening process.  Over our 15 years in business and around 100 years’ combined experience in the business, we have developed the best tenant screening process.  You can enjoy the benefits of this now!  Call us today on 07 3483 4511.

At Position One Property Management, it is our fundamental belief that for every property, there is a great tenant who will appreciate living in it.  We know that we get the best results with our tenant screening process when we match the right tenant with the right property.  By maintaining an open and honest relationship with all our tenants, we know that your property is being looked after.

An Air Conditioner for Rental Property – Good Investment or Not?

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Is an Air Conditioner for Rental Property a Good Investment – or Not?

We all know about those hot sticky nights when there is little or no breeze, and the humidity is stuck on 98%.  Sometimes there is no alternative other than to run the air conditioner all night.  The risk of waking up grumpy is just not an attractive option!

But what if you are renting a property, and there is no air conditioner?  Along the same lines, what if you own a rental property, and it’s not airconditioned?  What are your rights as a tenant of a Queensland rental property? Conversely, what are the expectations on a landlord to install an air conditioner in your rental property?

What do you think about putting air conditioner into a rental property?

As you may expect, it all comes down to the numbers.  Whether an air conditioner is a good investment comes down to a couple of things.   Its’ value can be assessed in terms of up front cost, as well as the time to pay back the investment.

Each year we can expect a couple of months of really hot weather, and some of just plain hot weather!  So there’s no doubt that a rental property with an air conditioner is going to be more attractive to prospective tenants.  In addition, we can consider those colder months of the year when heating is desirable.  We therefore can begin to build a case for a reverse cycle air conditioner that can be used all year round.

What is the pay back time for an air conditioner in a rental property?

A typical reverse cycle air conditioner costs around $3000 – $4000 to have installed.  This is quite a reasonable outlay for a split system, reverse cycle air conditioner.  Such a system can heat or cool the living areas of a small home, or an apartment.  Let’s say that for the moment you get an extra $20 to $30 per week rental income for your investment property, because it is more desirable with air conditioning installed.  This rental return means that you should be able to pay off the cost of installation within or around 3 years.  There are also some tax benefits on this investment that can also be considered in the pay back period.  Check with your property-savvy accountant for the facts on this.  They will pertain to your particular situation.

But there are other hidden benefits also!

There is little doubt that an air conditioner for rental property makes the property more desirable for tenants.  Property managers always find that there is extra demand for rental properties with air conditioning installed.  The real benefit here is that the property manager has a larger pool of prospective tenants to choose from.

More attractive rental property – better tenancy rates

Therefore the landlord gets the benefit of choosing from the best tenant applications.  This increases the chances of securing the best tenant for the property.  At the end of the day, finding the best tenant for the property is the key to a good investment property.  This is because a good match ensures the tenant is happier, and the property is leased and better looked after in the long run.

But what does all this mean in terms of rental return?

When discussing the cost of installing air conditioning in a rental property, there is a third factor at play in the pay back time.  The pay back time is dependent on securing long term tenants, and minimising the vacancy rates.  If you have ever experienced a lengthy term of vacancy in your rental property, you will know that it can become very costly in terms of your investment income.  So here is the potential benefit from installing an air conditioner for rental property.  When the landlord can increase rental by a small amount per week, but also ensure good long term tenancy rates, this can be far more beneficial in the long run.  There is no doubt that a landlord gains a better long term investment return by minimised vacancy rates, rather than by increasing the rent.

Does an air conditioner for rental property increase the capital value?

Unfortunately, this is probably not a good reason for justifying the outlay of money.  Obviously the installation of air conditioning in your rental property can be a serious investment in terms of capital.  Note though that the potential increase in capital of the property is, at best, only likely to be the same as the amount of money outlaid.  Over time, as the air conditioner ages and the value of the appliance decreases, there is potentially less likely to be any increase in property prices due to the installation of air conditioning.  They can even become a liability if they don’t work.

What if a tenant requests an air conditioner?

So the numbers discussed above show a favourable argument for an airconditioner for rental property.  However, when a tenant requests an air conditioner be installed in a rental property, this can still be a conundrum for landlords.

It will generally depend on personal factors and circumstances for a property owner.  The owner’s particular investment strategy can also come into play.  It can also depend upon the market at the time.  Despite the ‘upside’, it can still be a big decision whether to install air conditioning into a rental property.  If investing long term, it is attractive to secure a good long term tenancy and maintain low vacancy rates.  An air conditioner for rental property can help with this.

What if the property owner is trying to maximise the capital investment purely in terms of financial return?  The numbers can then be a little trickier to justify.

However, there may be a compelling reason to install air conditioning if other properties in the area already have air conditioners installed.

Depending on personal circumstances, there is always a potential benefit to be gained from depreciating the capital assets when you own an investment property.  Be sure to check with a property savvy tax accountant to ensure that you do not overlook any rental property tax deductions.  This may extend down to the costs of regular servicing and maintenance of the air conditioning units, as these costs can be considered reasonable business expenses.

Can you increase the rent for installing an air conditioner?

Can you increase the rent if the tenant asks you to install an air conditioner?   Yes, the answer is that you can negotiate an agreeable rental increase.  It is also important to look ahead to the longer term benefits.

Don’t try to gouge your tenant with rental increases.  This may not turn out to be such a good investment in the short term.

What if your tenant decides to seek alternative accommodation after the summer heat has passed? You may be left with an unexpected vacancy.  Then there would be no rental income to cover the cost of the air conditioner.  The better alternative is to keep your tenant happy.  This will serve to retain a longer lease agreement to keep the property rented in the longer term.  There is little doubt that maintaining high tenancy rates is preferable in terms of investment.  This will avoid the costs associated with selecting new tenants at the end of every lease.

An air conditioner for rental property can be a very good investment, indeed.

What is the Average Length of a Tenancy Agreement?

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When it comes to a renting out your home, one of the most important factors to consider is determining how long the Tenancy Agreement is going to be for. The most common Tenancy Agreement is a fixed term one, due to the security it can provide. Fixed terms can be of any length that is agreed upon by the property owner and the tenant.  It’s usual to have lenths of 6 or 12 months. The current market and the high cost of moving means more people are leaning towards 12 month fixed leases. 12 months provides a level of security for both the tenant and the property owner.

There are also periodic agreements.  These have no set end date, and usually work on a week to week/fortnight to fortnight basis. Periodic agreements are for those who need a flexible agreement and can be useful in certain situations. Periodic agreements provide little to no security and are generally not as common as fixed agreements.

What tenancy agreement should you commit to?

Rental AgreementWe suggest the length of the new tenant’s first Tenancy Agreement should be for 12 months. This allows both parties to decide whether the arrangement is working out.  It allows the property owner to see how the tenant meets their property care and financial obligations. If at the end of this agreement, both or one of the parties is unsatisfied, the proper steps can be taken to end it at the finish date.

When can I renegotiate the rent?

If the market permits, you can increase the rent and can write it into the Tenancy Agreement at the 6-month mark. The agreement can also be renegotiated before the end of each fixed term period. If you’re unsure about the process, there’s no need to be concerned. We will contact you about 3.5 months prior to a lease expiry with options that are available to you and provide you with rent advice.

Does the Tenancy Agreement end when the fixed period is over?

Once the fixed term period has finished, this does not necessarily mean the Tenancy Agreement itself finishes. The agreement itself will only be terminated if either the tenant or property owner gives the required notice. If the tenant wants to move out after the agreement ends, they must fill out the required paperwork. Tenants are generally required to give at least 14 days notice, to ensure everything goes smoothly and to allow the property owner to find new tenants. If neither party wants to discontinue the agreement, it will become a continuing and periodic agreement. A new tenancy agreement can also be signed with the same terms and conditions that were previously set.

What happens if the tenant wants to leave before the fixed agreement ends?

A fixed term agreement means that tenant will stay until at least the end date and are required to pay rent until that date. If the tenant wants to break the agreement early, compensation will need to be paid to the property owner. Likewise, if the property owner wishes to end the agreement early, they are required to compensate the tenant.

Renting your home can be confusing and stressful at the best of times. Sometimes important aspects such as the length of a Tenancy Agreement can get overlooked and the paperwork rushed through. If you’re unsure or having doubts about your Tenancy Agreement, don’t stress.  Contact us and we will be happy to provide you with advice and answer any questions you might have involving your tenancy agreement.

 

Rental Property Depreciation – Q&A

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DISCLAIMER: We are not financial advisors and none of the following information is offered as financial advice.  It is up to you to seek your own independent financial advice.  We do recommend seeking the services of a qualified and experienced Tax Accountant.  They should be an expert in dealing with property portfolios, and ideally is a property investor themselves.  This is a general overview of rental property depreciation and the details vary with each person’s situation.

Rental Property DepreciationIf you’re getting lost in the world of tax depreciation and how it relates to your rental property, you’re not alone. It’s a daunting and confusing area, but we want to take some of that confusion away by answering some of the more commonly asked questions.

In short, rental property depreciation is no different to the other items that are depreciated on your tax return. Many property owners do not realise that there are different types of allowances that you are entitled to claim on your tax returns. Many rental property owners who have purchased a property to return an income do not realise that you can depreciate what is contained inside the building and the physical dwelling against its income. You don’t need to be an expert accountant to take advantage of opportunities you didn’t know existed. You just need a basic understanding of rental property depreciation and who to contact to help you make all of the claim opportunities available to you.  Some see rental property depreciation as one of the advantages of owning an investment property.

What is rental property depreciation?

Rental property depreciation actually has two different allowances for property owners to take advantage of:

  • Plant and Equipment depreciation (the items inside the property such as washing machines, ovens, curtains)
  • Building Allowance depreciation (the property itself and the materials that make it a building, such as bricks, timber, driveway concrete)

If you’re not offsetting these costs in your annual tax return, you’re probably not making all the claims you could be!

How does it help me?

Making claims for both Plant and Equipment depreciation and Building Allowance depreciation will reduce the amount of tax you need to pay each year. Having a schedule for these depreciations will ensure you are making the correct claims each year, and also serve as a reminder for what you should claim for that year. I’m sure we don’t have to mention that reducing your taxable income is a good thing!

Another way depreciation schedules help you is by it being what the tax office calls a ‘non-cash deduction’. What that means is that you’re not repeatedly paying for the deduction every year because you paid for it upfront when you purchased the property. Whether you knew that it was included in the price of the property or not, it’s just another reason why it’s worth claiming deductions against the two types of allowances.

Who can claim deprecation on their rental property?

Any property owner can make a claim on depreciation of their rental property. A common myth is that some rental properties cannot claim depreciation because they were built before a certain date. This is untrue for the most part. It doesn’t matter how old your property is.  Its age, however, may mean only certain allowance types are able to be claimed.

  • Residential properties that were constructed earlier than July 1985 can make a claim for depreciation on the Plant and Equipment allowance only
  • Residential properties that have a construction date of July 1985 or earlier can make depreciation claims on both the Plant and Equipment Allowance and the Building Allowance.

It’s a good day for good news with opportunities to claim regardless of how old your property is!

Who should I contact for estimates?

Tax law states that accountants are not permitted to make estimations on the construction costs of properties built after 1985. Quantity Surveyors are the only people who can make estimates on unknown costs.  They should be first on your list of people to contact.

You should ensure that the Quantity Surveyor that you employ to undertake estimations on your rental property are a member of the Australian Institute of Quantity Surveyors (https://www.aiqs.com.au). The Quantity Surveyor must inspect the property to comply with their Code of Practice. They will document all aspects that can be depreciated and be much more thorough than you or your accountant could be.  It’s worth getting their help regardless of it being a requirement. It’s also important to note that the fee charged by Quantity Surveyors are completely tax deductible.

How much do depreciation schedules cost and how long do they take?

It takes between two to three weeks to complete a depreciation schedule from the date of the Quantity Surveyor’s inspection. There’s many aspects of a depreciation schedule that can affect its cost.  Good Quantity Surveyors make guarantees to ensure that the money the claims return outweigh the costs associated with developing a depreciation schedule. Ask your Quantity Surveyor if they offer any guarantees of return for the depreciation schedule they develop for you.

Is there any easy way to figure out what my claimable deductions might be?

There’s a number of depreciation calculators online, but BMT Quantity Surveyors offer a simple one of their website (https://www.bmtqs.com.au/tax-depreciation-calculator) By using the depreciation calculator you can get a good indication of what kind of claimable depreciation deductions you could expect.

What are some other myths about rental property depreciation?

Myth: You can’t make a claim on a property purchased three years ago.

Fact: You can likely make a claim on a property purchased three years ago.  Tax returns can generally be amended within two years, with a number of exceptions, of course.

 

Myth: You can’t claim deductions on renovations made to the property.

Fact: You can make a claim providing you know the total cost of the renovations.

 

Myth: If you didn’t make the renovations, you can’t claim the deductions.

Fact: Even if you purchased the rental property with recently renovated components, you can claim depreciation on the renovations. However, as stated above, you must know the total renovation cost.

 

Australian Taxation Office

For further reading, you may like to view the ATOs page : ATO Rental Properties 2016

It’s important to obtain the advice of a suitably qualified financial advisor.  You need to be sure that property investment is appropriate for you to undertake.  If you do embark on that path, you will be wise to appoint a qualified and experienced Tax Accountant.  Do be sure to check they are an expert in property, and invest in property themselves.  If you do this, then rental property depreciation is something they will adeptly take care of for you.

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How Property Management Services Help You Avoid the Tribunal

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Property Management ServicesIf the word ‘tribunal’ makes you break into a sweat, chances are you haven’t used property management services before. Unfortunately, matters between landlords and tenants can occasionally arise.  No matter how big or small, they can get out of hand when not dealt with correctly. There are many ins and outs pertaining to rights, responsibilities and duty of care in the property rentals area.  Therefore it’s critical to have an in-depth knowledge of the rules and stay well on top of issues, before they escalate.

To start at the beginning:

 

What is “The Tribunal”?

“The Tribunal” in the property rentals context is the Queensland Civil and Administrative Tribunal (QCAT).

Basically, the Tribunal acts to assist with tenancy disputes.  This would occur after a Notice of unresolved dispute from the RTA (The Residential Tenancies Authority) has been issued. All tenants and lessors can apply to the Tribunal.  They would apply to the Tribunal to hear disputes ranging from urgent to non-urgent issues. An example of an urgent situation might be where a lessor is applying for a Warrant of Possession, because a tenant has not left the property by the notice date.

If you’re the person applying to the Tribunal to hear a dispute, you’re called the applicant.  The person responding to the claim is called the respondent. There are time limits in place in order to make a claim  These range from seven days to six months and you can apply on a QCAT Form 2 – Application for minor civil dispute – residential tenancy dispute. This should then be lodged at the QCAT registry in Brisbane, by person or post.

 

But Wait, There’s More…

Ready to find a good property management services Brisbane agent yet? We’re not surprised, especially when we dive deeper still. Even before the Tribunal is involved, tenancy disagreements are referred to the RTA. The Residential Tenancies Authority offer a dispute resolution service, by providing information on the Residential Tenancies and Rooming Accommodation Act 2008. They also assist in resolving disputes and arrange face to face or telephone meetings between both parties.

Only urgent situations are exempt from first contacting the RTA, and these include:

  • Termination orders
  • The expiry of a leave notice without tenant compliance
  • An order to restrain a person from causing damage or injury
  • Situations which may be classified as excessive hardship
  • Tenancy data base listings which don’t comply with the listing criteria

This RTA is a fantastic service that often achieves successful results. However, wouldn’t it be great to avoid the complicated process, all together?

 

Property Management Services as the First Line of Defense

As a first line of defense, Position One Property is there for you, with professional property management services in Brisbane. A wealth of experience enables us to put the appropriate steps in place, before such situations occur. This not only gives you peace of mind, but ensures the ongoing success of your tenancy agreements, so you can concentrate on profiting from your investment.

 

What are the Causes of Tenancy Disagreements?

Before we look at the solutions needed to avoid heading to the Tribunal, it’s important to understand the most common reasons for disputes between tenants and landlords. Often, the number one issue is a breakdown of communication.  This is usually where small issues are left to grow into monumental disagreements.

When either party makes assumptions, has differing expectations or avoids certain issues, communication becomes difficult.  When processes have not been put in place, or are not adhered to for various reasons, this can occur. Therefore, no matter the problem, conflict resolution becomes hard to foster.

Some other top reasons for disputes include damage or changes to property – whether accidental or not, non-payment of rent, failure to uphold building standards or rules, payment for utilities and notice periods for entrance to the property or ending a tenancy agreement.

Take heart though, as all of these issues are easily avoided, with careful planning and attention before, during and after a lease agreement.

 

Position One Property Management Service Solutions

The key step in ensuring a successful tenancy agreement is in the effective selection of tenants. To avoid issues such as damage to property and rent in arrears, it’s vital to conduct stringent security and reference investigations for all applicants. This way, owners can rest easy in the knowledge the tenants are proven to be reliable, responsible and capable of maintaining the property.

Secondly, building a good rapport with tenants opens the channels of communication. Therefore, if any issues do arise, the good relationship between the tenant and property manager ensures problems are dealt with swiftly, in order to fulfil the needs of everyone involved. The ‘third party’ aspect dissolves any personal engagement with issues, so processes in place are conducted in a professional, efficient manner.

Tried and tested resolution techniques are used to arrive at solutions if disputes arise.  We have a sound knowledge of the rights, responsibilities and agreement clauses of contracts. Utilizing property management services takes you firmly out of the firing line, where we’ll be waiting with all the necessary skills to protect your investment.

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