6 signs of an amazing property manager

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When you purchase an investment property you can’t shoulder the burden of managing it yourself. Investors regularly pass this duty on to their property managers. Of course there’s a few ‘unreputable’ characters out there, but the professionals are worth their weight in gold (or rental profits!).

When you’re comparing agencies and individuals, make sure you’re noting down these five points:

Their vacancy rates
As in, they’re minimal. Good property management equals low vacancy rates. Your property won’t lack for tenants because the manager has done their job properly.

Senior management aren’t afraid to be hand-on with the work and that’s another reason why some firms are so successful. The more experienced people are still in the game, doing their best for their clients.

They have a network of services
Yes, the manager’s main job is to MAINTAIN your properties and make sure the rent is getting paid. But they should offer more than just this basic service. A good firm will also check the market to make sure rent is fair. They’ll calculate invoices for you. There’s a network of trades on speed-dial when something has to get repaired. In short, you don’t have to lift a finger, because your property manager should be taking on most of the responsibility.

Got a property problem? They have someone to fix it.

The door’s always open
Irregular communication is a red flag. Property managers must call their clients regularly with updates about the homes and spaces they’re responsible for. It doesn’t matter if the news is bad. Transparency is key. Plus, when the client calls, they’ll always answer unless there’s an emergency.

They come highly recommended
If an investor is happy with their team, of course they’ll spread the word and recommend them. Investors reach out to each other regularly for advice about who to hire and what market actions to take.

If you know an investor with a good portfolio who seems to be sailing along with a big smile on their face, ask them who manages their properties. Alternatively, you can do a Google search and look at recent My Business reviews.

Everyone’s happy
If people in the property management firm look like they’d rather be somewhere else, it’s best to walk right out the door again and not take the meeting. If staff are happy and content in their job, they’re going to do their best for YOU too.

Genuinely happy staff will care more about your investments

The firm is a well-oiled machine
Your property manager should have a regimented schedule that encompasses everything they do. Inspections are a regular occurrence alongside rent payments and client meetings.

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What $500,000 can buy you in the 2017 property market

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Thanks to constant news coverage about rising population numbers, employment, and therefore housing affordability, the property market seems less accessible than ever. Investors are asking themselves what they can buy for half a million, so we’ve compiled a short list. One home for each state around Australia.

  • Queensland

14 Macquarie Street, Teneriffe

Offers over $450,000

2 bed, 2 bath, 1 garage

This apartment is in the trendy suburb of Teneriffe. It comes with river views, easy access to the city, and a host of gyms, shops, and restaurants. Similar properties are around the same price, going up to as high as $2 million.

  • New South Wales

74 Tucklan Street, Dunedoo

$195,000

4 bed, 2 bath

This home is in the rural village of Dunedoo, 100kms from Dubbo. It’s on the market as a ‘recently renovated property’ though new owners can modernise it as they like. This is a steal in today’s property market, and has the potential to be a home for holiday tenants.

  • Victoria

59A Vale Street, Alfredton

3 bed, 2 bath, double garage

$349,000

Not bad for a Ballarat townhouse. This home, only three years old, is good for those investors looking at homes for empty-nesters and downsizers. There’s a small backyard area and spacious bedrooms inside. The townhouse is close to shops and schools for small families.

  • Tasmania

5-7 Doric Court, Zeehan

3 bed, 1 bath, single car

$125,000

Investors looking for a small family home on the property market would snap this up for a minimal amount. Zeehan is a small town of less than 800 and the house is down the road from the local school. It’s marketed as having a double block of land, new external Colorbond, and a rumpus. The interior is quite dated, making it a prime candidate for renovation.

 

  • South Australia

503 Fullarton Road, Highgate

2 bed, 2 bath, garage

$495,000

Just within the $500k budget, this stunning house is a rarity. On the outside, it looks like a grand home, a mansion, even. When really, it was renovated to work as an apartment block with three units. The exterior keeps its Mediterranean style character from when it was built in the 1930s, but the interior is totally modern, complete with an elevator. This is definitely a steal in the 2017 property market.

  • Western Australia

26 Collins Street, Kalgoorlie

3 bed, 2 bath, garage

$265,000

You can spend just over half your budget and get a lot back in return in WA. This cottage was built in 1927 and leaves investors some room to redecorate, so you can claim depreciation on any new fixtures you install. There’s a large amount of exterior space, perfect for tenants with pets and children.

  • Northern Territory

9 Dowling Street, Katherine

2 bed, 2 bath, garage, pool

$340,000

Getting a home with a pool for less than $500,000 is a miracle, but it can be done if you’re looking at the property market in the Northern Territory. This home recently underwent a massive renovation that included the installation of the pool. Located in Katherine South, the home is close to the library, the public hot springs, and national parkland, making it good for family/tourist tenants.

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smashed avo and property invesment

The great debate: 5 articles about smashed avo vs property investment

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On May 16th 2017, property guru Tim Gurner appeared on 60 Minutes to talk about the property market and he didn’t hold back. What he didn’t expect, though, was to set off a chain reaction of jokes, puns, and a genuine debate about breakfast.

His comments that young people can’t afford to get into the market thanks to meals out and their daily coffee hit received a lot of backlash, but also changed the way we looked at Australian property investment. We collected some of the best articles about the issue from around the web so you can make your own judgement.

‘There was no discussions around, could I go out for breakfast, could I go out for dinner. I just worked.’  – Tim Gurner

A quote from the original interview that sparked an uproar. Tim Gurner, property investment advisor and developer speaks candidly about his struggles when he entered the property market…and why the new generation has no chance of getting their foot in the door.

Travel, smashed avo, or that avocado farm in rural WA? Mark Campbell, writer for the Sydney Morning Herald, looks at the ‘lazy’ millennial generation and their prospects for entering the property market. Are they really in trouble when they’re spending money on trips to South America and $15 smashed avo with a sprinkling of dukkah?

 

The debate made its way over to the USA, where a savvy Twitter user did some maths and shared the results.

How many serves of avo smash a day equals the profit your investment property brings you in capital? This tongue-in-cheek piece from Real Estate has some unexpected figures.

 

What if it’s not the breakfasts’, or millennial’s, fault? Nick Evershed from The Guardian helpfully points out that markets and general affordability, or lack thereof, are putting young people out of the running.

This article even comes with a fun ‘luxuries’ calculator that equates the amount of ‘fun stuff’ people can do, eat, and more with the equivalent of a property investment deposit.

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8 amazing home builds and overhauls from around the web to inspire your investment property renovation

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Are you looking at the type of investment property you can ‘fix-up’ and flip for a profit? Or even turn into a rental? There’s hundreds of thousands of design pages, and just as many websites and blogs,  it’s difficult to filter out the noise. We’ve compiled some of the best ideas.

Curb appeal

Bringing Elements Together

This new home in Geelong brings different materials together to create a stunning facade. When you’re renovating your investment property, or building from scratch, look at the curb appeal of the other homes in the neighbourhood and see what you elements  can mimic…if not do better.

Lounge

Living Room Inspiration by HiPages

The lounge/living area is where your tenants will end up at the end of a long work day. They’ll kick up their feet, put on the Foxtel and spend the night in with a movie. Wood and concrete are hardy materials, though carpeting and rugs are more comfortable to walk on. You can change the finishes depending on the lifestyle and type of tenant you’re marketing to.

Dining/Kitchen

Galley kitchen designs to inspire a kitchen makeover

The heart of the home. Family members and visitors spend most of their time in this space. It’s also the most highly judged of the rooms in the investment property. Don’t scrimp on the paint or finishes. The space is meant to be functional, but also make it warm and welcoming, like this galley-style kitchen. Many modern kitchens have an island bench and an open-plan design that flows seamlessly to the dining area.

Master Bed

5 incredible house design ideas & images from Real Estate

Prospective buyers look at kitchens and bathrooms for value. Bedrooms, though, should never be overlooked. Master bedrooms are meant to serve as a sanctuary, preferably with an ensuite like this one above in Flinders House, Victoria. You can claim depreciation on the new fixtures when you renovate the investment property.

Bathrooms

Bathroom Ideas – Bathroom Designs and Photos by Real Estate

Rainfall shower heads, deep bathtubs and heated towel-racks? Tenants have high expectations and they’ll look right over your investment property if it doesn’t stack up.

Second Bedroom

Create an inviting guest bedroom

The more bedrooms, the higher the rental income! Your investment property might cater for roommates, couples, or a three-person family. But make the bedroom styling neutral. This way you can appeal to the maximum amount of buyers. Jo Carmichael from HomeLife has some useful tips in this article.

Study

Before & After: A Whole New Look for a Home Office

Simple, yet functional. If your investment property has an extra room, turn it into a home office. This is great for working parents and people who need an area to work on homework and projects.

Outdoor living

Affordable Sydney Patios by Houzz

A patio, balcony or a backyard is part of the australian way of life. If you have outdoor real estate, use it. Spruce it up with some new lawn, paint the fence and design it in a way so that it flows from the kitchen/dining area. INDESIGNS from Sydney has managed to pull this off in a Scandinavian-style cottage, complete with a kids cubby house. You might not put one in for your tenants, but it certainly adds character.

Garage

How to declutter your garage by Real Estate

Even this part of the house needs some attention. You mightn’t need to renovate it, but it’ll need a good clearing out. The tenants in your investment property most likely drive and the garage needs to have room to fit at least one large vehicle. This area also doubles as a storage space and adding shelves with help with functionality. Don’t forget about curb appeal; the exterior of the garage is always visible from the street.

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property market

4 articles that give investors a reality check about the property market, worldwide

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The property market is competitive, no doubt about that. Internationally and locally, investors are getting priced out of one market and moving onto another, before the same cycle repeats itself. Australia’s had a ‘golden age’ of affordability, but in recent months that rosy period has come to a screeching halt.

Sydney and Melbourne’s property markets are slowly outpricing potential investors thanks to rapid employment growth, among other reasons. While prices in these cities have risen over 10%, Brisbane’s growth remains in the single figures. But is it too good to last?

The UK has one of the priciest property markets in the world, and the younger demographic is certainly feeling the pinch. This is all thanks to changing work conditions, the drama of Brexit, and the ‘silver generation’ using their experience to snap up hot real estate.

This is an opinion piece, but the context is relevant. This debate was sparked by investment professional Tim Gurner’s scathing observation about millennials and their lack of potential to crack the property market. Why? Because they love $4 coffee and avo smash everyday. Even though the debate has raged back and forth, it’s put the way we work, save, and spend in the spotlight and there’s no sign of it slowing down.

There’s a glut of apartments in Brisbane, and developers are so desperate to sell them they’re offering incentives to buyers. This comes as a result of  oversupply and minimal demand. ‘Offers’ include the likes of free rent (for a period), vehicles and free avo toast everyday for a year. That’s probably another house deposit…or a new couch.

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Don’t make these 6 mistakes if you want the best property investment possible

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There’s no one-size-fits-all when it comes to finding the ‘best’ property investment available. Ideally though, you want it to make you money through rent paid by tenants. It doesn’t matter if the property is residential or commercial, a house or an apartment. To make sure you find the best property investment for YOU and your portfolio, we compiled these five tips.

  • You don’t have professional help

You need unbiased professionals to help you handle the financial aspects of property investment. Mortgage brokers help investors daily, giving them advice about home loans and ownership structures. You’ll also need your accountant on your side. Find one that specialises in property accounting so they can lay out a plan and a budget based on your income and credit.

  • You don’t have an end game

Nobody invests in property just for the heck of it. There’s always a plan in place for each property in the portfolio. There should be a backup plan, too.

Some get into property investment to boost their retirement savings or retire early. Others want to get out of their day job after earning income through buying, renovating, and selling homes. Don’t walk into the property investment game with short-term goals.

  • Your properties are all in one place

Yes, you’re more comfortable buying ‘close to home’ because it’s familiar territory. But this means other investors are buying you out of the locations that really make the big bucks.

Less than 20% of investors have two properties or more in their portfolio. Less than 1% own six. This means 99% of investors are playing it safe and are missing out as a result. There’s no reason why you can’t have a property in Tasmania or another in Perth. Get out of town when it comes to looking for the best property investment.

  • You haven’t looked at trends

Get familiar with complicated terms like ‘yield’, ‘median price’, and ‘cash flow’. Trends like these will guide you in making great purchases.

  • …or done your homework

Have you done any research into the area you want to buy? Did you check if there’s any upcoming developments like shopping centres? What about schools and access to public transport?

If you don’t do your homework, you’ll end up with a property investment located in an area saturated with others. You’ll leak money instead of save. This is why it’s important to look at trends and branch out from your ‘home base’.

  • You can ‘manage on your own’

If you can, good on you. But the task of picking tenants as well as monitoring them, setting rents, and the like takes time you don’t have. Plus, you’ll get emotionally invested. Hiring a property management team is a better option.

property investor

Behave like a 1% property investor with these tips

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You say you’re a property investor. You spend the weekend looking at open houses and you read the real estate section. Domain.com.au or realestate.com.au is permanently open in your menu bar. But did you know less than 1% of property investors successfully build a portfolio?

In a previous article, we spoke more about these statistics. The most common type of property investor only owns one home, apartment, or commercial building (72%). Less than 20% own two. First time investors often fail to truly build their best portfolio thanks to a trail of mistakes that prevents them from growing.

So how do you behave like a 1% property investor? Well for one, you must understand risk and have a high tolerance for it. Property is a business, a game to be respected. Treating it like a side gig or a hobby, or just not taking it seriously, will come back to bite you when something goes wrong.

The 1% are patient and have clear game plans for what they want to achieve. Property isn’t a ‘get rich quick’ scheme by any means. There’s loans to take out, home-hunting to do, and meetings to attend with professional advisors. The general consensus with entering the market is to make money. Investors in the 1% will have 6 or more properties in their portfolio. They make hundreds of thousands, right up to the millions, every year, and that’s only from rental income.

If you aspire to grow your portfolio like the 1%, learn from your mistakes and from those that others have made. Friends and family, though they mean well, aren’t the best place to look for advice. Rather, join an investment group, like a  property club, that has a network of professionals. Communities like this are great for accessing financial advisors, meeting fellow investors, and even making new friends.

Don’t just act like the 1% do think like them. This is one of the best ways you can grow your portfolio and your bank balance. Change your mindset to something more clinical and business-like. You’re a property investor, a business person. Not ‘player one’ in the property game.

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real estate

Depreciation assistance for real estate professionals

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To make a sale, real estate agents need to rely on cold hard facts. Their clients need assurances that the property they’re seeing is the best investment for them. It doesn’t matter if the property is a commercial building or a home; if there’s benefits available, it’s music to anyone’s ears.

There’s two classes in a depreciation schedule: capital works, and plant & equipment. Capital works are things the ATO considers permanently fixed to the building (bricks, mortar, wiring etc). Plant and equipment is a different matter. Items in this category are things that can easily be removed from the building such as carpet, furniture, and even the smoke alarms. Thanks to age and general wear, the items in both categories will lose value over time. This creates an amount that can get claimed on a tax return every year.

Having access to ATO-approved depreciation schedules almost on-demand is a great asset for real estate agents and property managers. They can present tangible tax benefits to their clients during a sit-down meeting or even during a property inspection.

Real estate agents know that their clients are looking for the best deal. Presenting the depreciation schedule is a huge advantage in helping them close a sale. Depreciation is essentially the same as savings, or money back from a PAYG statement. It shows the property’s earning potential and can be the difference between a negative-geared asset and turning a profit every week.

Property managers will also benefit from professional depreciation assistance. If their client is unsure of the tax breaks their property can provide, managers can look up a deprecation report just as easily as a real estate agent. Oftentimes the investor doesn’t know they can order the depreciation report themselves and turns to their manager for help.

The benefits that real estate agents and property managers can reap from depreciation assistance are numerous. They don’t just build trust with their client by providing the basis for sound advice. They’ll net a sale and gain a reputation for handling properties with amazing tax benefits.

property investment

5 ways to find the best property investment

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The idea of property investment is exciting. Whether you’re looking to expand your business or you’re an investor wanting to add another portfolio, the anticipation outweighs the dread…most of the time. People who are new to the property game often find themselves disappointed and reaching too far outside their budget. How do you avoid this yourself?

  • Be realistic

You have dreams, but reality will give you a rude awakening if you’re not careful. Working towards a goal slowly and steadily ensures stable growth. If you peak too high, too fast it will all come crashing down. Not meeting payments, having bad tenants, or finding faults with the property after purchase are all possibilities if you rush into buying.

  • Hunt everywhere

Even though most people still look for their next property investment online, the newspaper listings are still a valuable resource.

When we say hunt everywhere, we also mean broaden your search radius. Seasoned property investors and business owners have places all around Australia. Search online for the best growth suburbs in Australia, you’re bound to see something that ticks the boxes. Which leads us to the next point.

  • Write a list

This will keep you on track, and honest. Whether you call it a purchase plan, a property checklist, or something else, make sure it’s on hand when you’re looking at places. If you’re concerned about depreciation, add these to the list:

  • Has any renovation work been done recently?
  • Are the fixtures in good condition?
  • Will this still give me income X years from now?
  • What’s the area in meters squared?
  • Turn off your emotions

This step is crucial. Letting your emotions get into the mix leads to burnout and heartache. When things don’t turn out the way you hope (you lose the bid, offer rejected, etc) of course it’s disappointing. But you keep your chin up and carry on. The best property investment for you is out there; you just have to look a little harder.

This point ties into point number one about realism. If you’re an investor looking for rental properties, don’t think about the hunt as looking for your dream home. Not even if it’s ten years down the track. You’re looking for a place that will attract tenants and generate income for you. The best property investment for you might be a home or an apartment that doesn’t  suit your tastes, but will be perfect for someone who rents it from you.

  • Get the professionals on your side

As soon as the property is settled, call Deppro to have a quantity surveyor inspect the property. You’ll receive the best, most accurate depreciation schedule if they see the place in its original condition.

Also invest in a property manager to find tenants (again, avoiding emotional investment). They’ll manage the bulk of caring for your portfolio. After you receive your tax depreciation report, hand it over to your accountant. They’ll make sure you get the maximum refund every year, contributing to your coffers so you can keep growing.

4 common rental property depreciation questions

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We answer rental property depreciation questions on a daily basis here at Deppro, and some have popped up more than others. If you’re new to the tax depreciation world, or just need a refresher to jog your memory, read on.

  • What’s the difference between ongoing and capital expenses?

When you hire a property manager, pay for advertising and cleaning, alongside various fees and rates for council and the like, they’re ongoing expenses.

Capital expenses contribute directly to your rental property depreciation. Capital works like the rendering of the building, any electrical work or appliances installed are eligible.

  • How can I measure depreciation potential?

You can go the old fashioned route and crunch the numbers yourself, but what’s the point if you don’t have to? Deppro has a free online depreciation estimate tool that’s trusted by investors, tax agents, and real estate professionals. You’ll need the following information:

  • Date of construction
  • Purchase price
  • Floor area
  • Location
  • Type of structure
  • Can I claim depreciation on previous renovations?

Yes you can! The beauty of rental property depreciation is you can claim existing works on any structure built after 1987, regardless of who completed them. You own the building after settlement, so the plant & equipment and capital works depreciation are yours.

  • What can I deduct at tax time?

This is one of the rental property depreciation questions we can’t answer. If you’re looking to claim deductions for your tax return, it’s better to ask your accountant. They’ll have your existing portfolio, previous tax history, and the other information they need to give you a better answer.

What you can depreciate is another matter. For example, if a tenant has caused damage to the property and you need to conduct capital works to fix them. You’ll have to make adjustments to the depreciation schedule, but you can claim depreciation on the works for as long as you own the property.

Customers rely on Deppro to answer their rental property depreciation questions before and after adding to their portfolios. Our blog has extensive advice on a range of topics and we’re available anytime over phone, or at our offices in capital cities around Australia.