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5 tips to bring rent arrears under control, and keep them there

If you work in the profession of Property Management, then rental arears is a subject close to your heart. After all, that’s the main expectation of your customer (the landlord), that you’ll collect the rent in full and on time.

But every property Manager knows the pain of managing rental arrears in their portfolio. It’s a bit like having a toddler, if you let things get loose even for a moment, then watch out, you’re in trouble!

Most Property Managers list chasing rent arears as their least favourite task. It’s not surprising really, who wants to be chasing people for money? It’s a time consuming and thankless task that often tests our patience.

The problem of course is that if you’re not all over the arrears (and in a timely manner) then it just explodes on you; and then you’re also dealing with angry landlords who are short on their mortgage payments and wondering why they’re paying you the management fee.

The number one reason landlords take a management away from you is poor arrears management.

There are also different rules depending on what State in Australia the rental property is located. In Tasmania and WA, a Property Manager can issue a ‘notice to vacate’ giving the tenant 14 days to vacate the property when a tenant is 24 hours late in paying the rent. And if the tenant in WA is continuously late the ‘notice to vacate’ can be reduced to 7 days. In other states and territories, a tenant needs to be either 7 or 14 days in arrears before a ‘notice to vacate’ can be issued. If a tenant fails to pay the rent up to date by the time the notice expires, the landlord can apply to the tribunal/court to evict the tenant.

Confusing ? you bet it is – for you, the tenants and the landlords.

So here are 5 tips to bring your arrears under control and keep them there;

1. Have clear standards, expectations and consequences

Back to the toddler analogy… you need to set your requirements and standards and make sure they are both clear and understood by all parties. The tenant needs to know your expectations and what the results will be for noncompliance. Don’t just let them know of the immediate consequence (issuing a breach notice) but make sure they understand the ramifications of that happening (it stays on their rental history and could affect their ability to secure a home they want in the future etc).

2. Always act on the due date

Never miss a date, If you inform the tenant that you will issue a breach at 5 days then that’s when you do it, not on the 6th day and not after ‘just one more call’. If you’re seen as flexible on your commitments, then nothing you say from that point will be taken at face value.

3. Be consistent

Never treat tenants (or landlords) in a way that is inconsistent with your policy and pre-set procedures. If your standards are variable, then the reality is that you don’t really have any standards.

4. Provide clear unambiguous communication at every stage

Have a process of always communicating with all parties in a clear, precise way and preferably in writing so it can be referred to in the event of future disputes. Verbal communications are worthless if you end up in the tribunal with an uncooperative tenant.

5. Be helpful but firm

The key to being a great Property Manager is to be firm but always helpful and understanding. In the example used in point 1 a really good Property Manager will be able to explain to a tenant that as the Landlords representative they want to make sure that the tenant is never issued a breach notice as it can have an adverse effect on their ability to rent in the future, the notices and sms’s sent you are all to help avoid the situation arising.

Some of the above items are best managed in your tenant onboarding process and some will be covered in your operational systems.

You basically have a couple of options as to how you can implement the operational items. You can run manual systems off the back of your Trust Accounting product or you can choose a cloud hosted automation option.

Here’s the good news, an automated system can do all this for you. Just set your expectations and operational standards and let the system do the hard work for you. About 80% of the tasks can be automated and you’ll only need to engage those few cases where you need to make a phone call or a decision’s required in regards enforcing a breach notice.

It’s interesting that a lot of ‘old school’ Property Managers initially find an automated process quite unsettling. They’re used to seeing a complete list of all arrears every day and then having to make decisions on how to deal with them all. Once you automate, the vast majority of your arrears are just dealt with – all you get is the call list and the breach list (assuming you have any).

Like most new business practises the most difficult part of the process is for the people working in the system to change their habits. You shouldn’t try and make an automated system suit your old manual style of operations, you need to change what you’ve been doing to suit an automated system.

Best advice is to properly train your people on the new system then take a deep breath and implement it in full.

You’ll get your life back and you’ll be amazed at how quickly your arrears will get to levels of compliance you’ve only dreamt about!

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Why do your staff resist automation ? And 5 ways to get things moving !

It’s never easy to implement change. It doesn’t matter how bad the existing processes are or how great the new strategy, you can guarantee that a large number of your staff will resist the change at every opportunity. People tend to fall into 3 camps when it comes to adopting a new process:

  • The ones who intensely oppose the proposed change
  • The ones who are cautious about change
  • The ones who are the champions of change

When planning your IT automation project, your strategy should have specific actions to address those staff members who are in the first two categories.

It’s a good tip to concentrate on getting a clear understanding of the benefits of the change rather than concentrating on the actual change itself. The goal is to change how your employees view the new technology being rolled out so that the process becomes a positive initiative that is driven forward by support rather than bogged down by resistance. That said, here are some proven best practices for effectively managing change in the workplace.

1. Develop a Readiness Assessment.

Step 1 is to have DISC assessments done so you have an understanding of what the most likely reaction of various staff will be, this allows you to head of problems at the pass before you get caught. You can also do a number of activities from holding focus groups to conducting a survey amongst all users. The purpose of a needs assessment is to identify the risks, benefits and potential obstacles that you may encounter when rolling out your IT automation project. It can also be helpful in determining areas of greatest resistance as well as the reasons behind the contention. Remember the old adage, you can’t manage what you don’t measure

2. Sell the Benefits not the Process.

As mentioned earlier, people aren’t going to jump on your ITPA bandwagon until you’ve convinced them that it’s worth their while. They want to know what’s in it for them. Address this by identifying, documenting, communicating and reiterating the specific benefits that adopting automation will have for each individual and team.

3. Communicate.

One of the biggest reasons people resist change is because they don’t understand what is being done or why it’s happening. This lack of knowledge naturally breeds fear, which can derail your IT process automation initiative. To avoid this, keep the lines of communication open and make sure everyone knows not just what the big picture is, but also their important role in contributing to that big picture goal.

4. Lead From the Front

Leadership at every level and in every department should be on-board with the proposed IT process automation project. Excitement and positivity can be very powerful tools in effecting change across an organization. Make sure you have complete buy-in from all executives prior to launching your project and that they understand the importance of solidarity across the board.

5. Identify and Leverage Your Change Champions.

These are the individuals who are most excited about the adoption of IT process automation and the many benefits it will provide. By identifying these key employees, you can begin to leverage them to influence their peers who may be feeling a bit less enthusiastic about the proposed change. These individuals can help bridge the gap between front-line employees and management and become a voice for those directly impacted by change.

IT automation can dramatically improve your organization’s overall performance, but it can rarely be achieved without overcoming resistance.

By taking a proactive approach and developing and implementing an effective change management strategy, the experience will be much more positive for everyone involved.

I these days of tightening margins and increasing client expectations you have no choice but to automate.

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10 tips on how to be a successful investor

What makes one investor better than another? Here are 10 tried and true steps successful investors use to help steer their decisions and to help them get the most out of their investment.

1. Do Your Homework

Nothing makes for a better investment foundation than solid research and a sound understanding of the property market. Start reading property investing blogs, scour investing websites as they are often packed with useful information, attend investing seminars or download and listen to investing podcasts.

2. Talk to your accountant

You need to understand the tax implications of buying an investment property and your accountant is the best person to talk to about this. Ask them to clarify the following:

  • Negative gearing implications and depreciation allowances on new buildings. They will be able to advise if you are better off buying in a new or old building
  • If you are buying a property with someone else ask whose name should be on the contract as this may have impacts on any future tax benefits, land tax and stamp duty.
  • How much they believe you can afford to spend each week on an investment mortgage and the tax impact on this amount.

3. Review local market data

There are many resources you can tap into to access market data for different regions across Australia. Sources such as CoreLogic RP Data, APM Price Finder, realestate.com.au or Residex will help you understand different property markets across each state and territory. Additionally, most government websites provide community profiles that share information about council plans, development projects or building regulations that can help you understand the supply and demand of the area as well as offering data to refine your search.

From a local perspective, your local LJ Hooker office can provide you with an in-depth local market report detailing the strongest growth areas, most traded and fastest selling areas, the top performing local suburbs and a snapshot of houses and unit sales, median sale price, rental yield, days on market and more. Understanding the local market is very important so make sure you contact your local LJ Hooker office – they live and breathe real estate and are a great source of valuable local market data.

4. Get a Loan Pre-Approval

This is an important step to ensure you are prepared to buy the right property as soon as it becomes available. A pre-approved home loan is a green light for buying. It gives you a realistic idea of your borrowing capacity and ensures you have a price range ceiling. Without pre-approval you can’t confidently put a bid in at auction or make an offer on a property without the panic of a last minute rush.

5. Get a feel for the neighbourhood

When it comes to becoming a seasoned investor nothing can boost your proficiency more than experience and one hands-on way you can get this is by visiting as many properties as you can before placing any cash on the table. This way you’ll be more likely to spot a bargain – and a rip off.

If you’re looking a buying an investment locally, it’s a good idea to wander the street in the area you are looking at buying in and see if anyone is out cleaning the car or watering the garden. Ask them what the area is like, how long they have lived there, what they like about the neighbourhood and what they don’t. What is the noise like during the day and night and any other questions you may have? You may even be able to find out why the seller is moving and if there are any developments that might impact the value of properties in the immediate area. Or if that seems a bit scary visit the nearest café and ask them what the area is like – they are often a great source of local gossip and community knowledge.

6. Be clear about the type of your property you want

Decide whether you want to invest in an apartment or a house. There are pros and cons for both options and these may vary depending on the area. You also need to consider if you want to buy a new or old property.

If you are buying a new property off the plan, you are able to lock in today’s price for a property that may not be completed for another year or two.What’s more, until the property is complete you won’t have to make any mortgage repayments – the only commitment is a deposit. The downside is there is no guarantee the value of the property will rise between purchase and completion.

The other option is to buy an existing property. One of the key benefits of this option is that
you may have more scope to negotiate on price in a slower market. Plus, there’s often the capacity to add value to older properties by making your own improvements, which in turn may also increase the rental it attracts.

7. Location Location Location

A golden rule for a solid investment is to choose a property close to amenities: transport, supermarkets, schools and hospitals – the more nearby the property is to facilities, the better. Also consider the crime rate, walkability scores, any future amenities planned or the historic charm of the property or the area.

8. Think about your ideal tenants

Carefully consider the type of tenant you want to attract before deciding what and where to buy. For example, if you’re looking to attract executive tenants a property in an urban location near transport, cafes, business and commercial premises is highly likely to be appealing to them.

If you want to attract a family, consider looking for properties that have an outdoor space; a deck or garden. Look for a place with extra space for the kids to play, one close to good schools, parks, transport, hospitals and shops.

9. Keep Some Cash on Hand

Successful investors keep a slush fund to ensure they are able to cover unexpected costs such as maintenance, rental voids and contingency for interest rate increases. Some experts suggest saving 9-10% of the gross rent in a slush fund to ensure you are prepared for the unexpected.

10. Due diligence

While you may be tempted to snap up a bargain quickly, make sure you do your due diligence on the property and ensure you don’t sign anything including offers, sales contracts or any other piece of paper thrown at you unless your solicitor or conveyancer has reviewed and approved them. Remember don’t get too emotional about these purchases as you are buying for return you’re not buying a home.

Your investment choice will depend on your own personal finances and financial goals, so it is critical you speak to your accountant or financial planning as to the best strategy for you.

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Flip or Hold, Some Hard Numbers

Many experts such as John McGrath have offered an opinion on this question. Flipping is a strategy employed by property investors who typically buy, make improvements (such as renovating, sub-dividing or securing DA approval for development) and re-sell within a very short timeframe for a profit.

It sounds like a great idea and all those TV renovation shows make it look pretty easy. The reality, however, can be far different, especially for people with no experience or skills relating to home renovation.
Mistakes get made, costs and timetables blow out and in the meantime, you’re covering the full loan repayments yourself with no rental income to help.

Successful flipping means recovering the cost of the purchase, the improvements, the loan repayments during your hold period and hefty trading costs, including stamp duty when you buy and agents’ fees and capital gains tax when you sell. After you’ve covered all of that, what’s left is your profit.

In short – it’s tough to do well and this is why flipping accounts for only a very small percentage of sales each year.
CoreLogic data shows only 1.3% of homes re-sold over the 12 months to June 2017 in Australia were held for less than a year. Only 5.7% were re-sold within 1-2 years of purchase.

Does flipping work? Well, yes it can, if you get absolutely everything right, including buying the right type of property at a good price in the right location; adding enough value through high quality renovations, sub-division or other means; and selling in reasonably strong market conditions.

Flipping, by definition, is done in a very short timeframe, which is why you can’t afford to make mistakes. There isn’t the luxury of time, which is the one factor that every investor can count on to deliver capital growth on a good quality investment.
You have a better chance of making a profit flipping during boom markets, when rapid price growth coupled with the value of your renovations can deliver a handsome profit.

In fact, you can buy a property at the start of a boom, do nothing to it; and sell within a few years for a profit, too. We’ve seen that happen in many cases over the past few years in Sydney. But few people get all the ingredients right.

The biggest challenge for flippers during booms is buying at a reasonable price. If you pay too much, there’s less profit to be achieved at the other end because you’re selling in such a finite timeframe.

CoreLogic recently released its inaugural Property Flipping Report, which provides a national analysis of properties that were bought and re-sold within either 12 months or 1-2 years by sellers specifically aiming to make a profit.

Among the capital cities, it found that flipping was most successful in Sydney and Melbourne, where 9 out of 10 homes flipped within 1-2 years of purchase turned a profit in 2017.

The report doesn’t go into how much of a profit, but it’s not surprising that people made money when both cities were in the midst of a boom.

In flat or normal markets, it was a different story. Only 3 in 10 properties in Darwin and 5 in 10 properties in Perth flipped within 1-2 years of purchase sold for a profit.

The report identified several flipping trends and hot spots nationwide, as follows.

CoreLogic recently released its inaugural Property Flipping Report, which provides a national analysis of properties that were bought and re-sold within either 12 months or 1-2 years by sellers specifically aiming to make a profit.

Among the capital cities, it found that flipping was most successful in Sydney and Melbourne, where 9 out of 10 homes flipped within 1-2 years of purchase turned a profit in 2017.

The report doesn’t go into how much of a profit, but it’s not surprising that people made money when both cities were in the midst of a boom.

In flat or normal markets, it was a different story. Only 3 in 10 properties in Darwin and 5 in 10 properties in Perth flipped within 1-2 years of purchase sold for a profit.

The report identified several flipping trends and hot spots nationwide, as follows.

NSW

  • The highest rate of flipping nationally occurred in Sydney, where 6.8% of re-sales in 2017 were flips of properties held for only 1-2 years
  • Nine out of 10 flips in Sydney and regional NSW turned a profit in 2017
  • The Illawarra on the NSW South Coast recorded the highest percentage of flips in the state (8.7% of re-sales within 1-2 years of purchase)
  • About 98% of flips in the Illawarra turned a profit

VIC

  • Most flips occurred in South East and North West Melbourne (7.8% and 7.6% of re-sales within 1-2 years of purchase)
  • The Mornington Peninsula was the most successful regional area for flipping and Bendigo was the worst

QLD

  • The highest rate of flipping was on the Gold Coast, with flips accounting for 7.9% of re-sales within 1-2 years of purchase
  • Flipping was most successful in Moreton Bay North (95.6% of flips sold within 1-2 years of purchase turned a profit) and least successful in Townsville (48.8% of flips sold at a loss)

WA

  • Losses were high for WA flippers in 2017, with 47.7% of properties flipped within 1-2 years of purchase in Perth sold at a loss
  • North East Perth recorded the highest losses

SA

  • An increasing number of people are flipping in West Adelaide

Flipping is not a wealth strategy for the average property investor. It can be a great idea for builders or others in the construction, real estate or interior design industries, as they bring special skills to the table. But for ordinary investors, normally best to simply buy and hold.

Renovating is a great way to add value and there’s plenty of low cost ways to do it. But time in the market is a much more important and effective element for average investors to achieve capital growth through property.

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How to make an offer on a property?

One of the most common ways people buy a property in Australia is by Private Treaty – this is when a property is listed for sale with an asking price and potential buyers make offers in writing to the real estate agent who will then presents it to the vendor for consideration. Typically, negotiations go back and forth between the buyer and seller (via the real estate agent), until an agreed price is reached.

The seller usually lists the property for sale at their desired price, or sometimes higher to allow room to negotiate and the buyer will typically try to find the lowest price the vendor is willing to sell for.

Deciding on what to offer first up can be difficult. Before you make an offer, make sure you understand the value and growth of the wider property market, the suburb and neighbourhood and the popularity of the suburb you are looking at buying into. By doing your research you’ll be in a better position to judge whether the home has been priced fairly and how much you are willing to offer.

You may wish to start with your best offer, especially if there is a lot of interest in the property or you could start with a lower offer and be prepared to negotiate up. The risk with starting lower is that you may lose the property to another purchaser who comes in with a higher offer.

If you do not have the luxury of time, perhaps when the market is very strong and there appears to be a number of people interested in the property, determine the maximum amount you are prepared to pay and make this your first and last offer.

It is best to have your finance pre-approved so the seller knows you are serious and able to act immediately, however you can make your offer subject to finance, which will give you a limited time in which to receive confirmation from your lender that finance will be made available to you.

Conditional Offer Versus Unconditional Offer

When you submit a written offer, you’ll also need to include any special terms and conditions for the sale of the home. For example, you may wish to have a longer settlement so you can sell your previous home, or perhaps the owner needs to fix up a certain part of the home. These conditions need to be included in the offer and the final contract of sale. Here is an overview of the different types of offers:

Conditional Offers is a binding contract to buy a property, subject to certain conditions being met. If these conditions are not satisfied, the buyer has the legal right to back out of the contract. Common conditions may include subject to valuation, subject to finance or subject to a building and pest inspection.

If your offer is unconditional, it is an outright offer to buy a property. You should be 100% sure that this is the property you want and that you have access to the money to buy the property. Legislation and the process of buying a property by private treaty varies from state to state, however typically speaking, once the vendor has accepted your offer, you are legally obliged to go through with the sale or risk forfeiting your deposit.

Whether you are negotiating a conditional or unconditional offer, it is advisable to speak with your solicitor or conveyancer about your rights and all terms of the contract before you sign anything.

Negotiation skills

The asking price is there to provide buyers with a guide of how much the owner is willing to accept for the property. However, this price is negotiable. Determine what your budget will be and pitch an offer below what you’re actually prepared to pay.

Don’t reveal the maximum amount you’re willing to pay straight away. Instead, work your way up through negotiations with the agents and the seller.

Don’t Get Too Emotional

Although private treaty sales do not see the heat that auctions can get, it’s still important to not become too emotionally tied to the home you want to buy. Leaving your emotions out of the equation will help you to negotiate with the agent. It will also reduce the risk of potentially blowing your budget if you become too attached to the home.

Making a pre-auction offer

Making an offer isn’t only restricted to Private Treaty sales – it is also possible to make a pre-auction offer on a property you are keen to buy before auction day. If you are wanting to make a pre-auction offer, make sure:

  • Your pre-auction offer is in writing.
  • You have a contract and deposit cheque ready.
  • You have set a time limit.

Make sure the price is right

Don’t jump in with an offer that is miles below the vendor expectations, as it isn’t likely to be taken seriously. In fact, it may even make the seller reluctant to work with you.

Making sure you have done your research is your best weapon when it comes to negotiation.  Knowing the market, the value of the property you are looking at and what your best offer would be is very important.

Once you know all this, make an offer that is realistic – don’t be scared to put your best offer in as it may mean the difference between walking away with the property or not. Also remember that working for a quick purchase can mean the tradeoff is in the cost, so be wary of your budge and if the prices is too high be prepared to walk away.

Get Your Timing Right

There are two schools of thought here. Some believe it is good to wait until close to the auction date before pre-offering.  This way the seller and the agent will have a concrete idea of the interest in the property and they may be willing to consider a good pre-auction offer.  On the other hand, a pre-auction offer made early in the campaign may trigger other parties to give up as they haven’t had the time to do their due diligence properly.

At the end of the day it is up the vendor to determine if they will accept a pre-auction offer, or whether they would prefer to take their property to auction and see what it gets on the day.

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The Importance of Landlord Insurance

One in 5 Australian’s own an investment property, but according to the Landlords Advisory Service only around 40% of landlords have the right insurance to protect their asset.

As with most investments things can go wrong, damage can be caused by tenants accidentally or perhaps intentionally, pets can damage properties, plumbing can break or your property may not be rented for a period of time leaving you exposed to rental shortfall.  Protecting your asset is the best way for investors to secure their financial and capital growth.

Carol Peach from Coverwise, has seen first-hand the impact not having insurance, or having the wrong insurance cover, can have on a landlord and the big out of pocket expenses they are expected to cover immediately.

She said “A property manager on a regular site  inspection found a tenant, suffering from a relationship breakdown, had maliciously destroyed his rental apartment causing $44,000 worth of damage!”.  The landlord was not insured with the correct policy and had to find an enormous amount of money quickly to fix the destruction and to protect his asset.

She said “Whether it be because of personal hardship, redundancy or job loss, illness or relationship breakdown things can change quickly with tenants and they may not be able to pay their rent leaving the landlord exposed”.

Additionally “many landlords are not aware of the intricacies of strata law and the fact that they may be held responsible for an injury inside the premises, if it can be proven that negligence on behalf of the landlord or the property manager caused the injury.”

She said “many landlords believe they are covered under bundled insurance / home loan policies so it’s critical to read the fine print of these policies as you may find you are not covered for everything you need to be, therefore exposing yourself to unnecessary risk.”  Carol urges all landlords to check their insurance cover now as you don’t want to find out you’re not covered when it is too late!

A well designed insurance policy can protect you from lawsuits by tenants for injuries or from losses to your rental property caused by everything from fire and storms, to rental arrears…all the way through to illegal drug labs, tax audit and covering the costs to change locks.

Whilst insurance premiums vary, you should expect to pay  less than a dollar a day depending on state premiums, but considering this expense is tax deductible and how much you would have to pay for unexpected repairs or issues if you weren’t covered, it is an important investment.

Protect yourself and your investment by arming yourself with the right kind of insurance. It may seem like an unwelcome extra expense, but you will be so grateful you have it if and when things go wrong.

Proactive property maintenance

Whilst insurance is critical so too is ensuring your property is maintained to the best standard possible.

  • Use a documented checklist to inspect the premises and fix any problems before new tenants move in.
  • Encourage your tenants to immediately report if they have any security or safety concerns with regards to your property or the common areas such as entrance ways, garages, fire stairs etc
  • Ensure you keep a written log of all tenant complaints and repair requests and detail how and when the issues were fixed
  • Make sure you fix any urgent repairs as soon as possible and if they are safety issues address these within 24 hours. Keep your tenants informed as to how and when the repairs will be made
  • Two times a year provide your tenants with a checklist to report any potential safety hazards or maintenance issues that may have not been addressed. Make sure you use this checklist when you personally inspect the property once a year
  • Ensure your repair and maintenance procedures are clearly set out in the lease or rental agreement
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New High Court Tenancy Ruling Regarding Interstate Landlords Illogical says REINSW

Hot off the press at RPM, a story that could affect interstate landlords with property in NSW.

A new High Court ruling has just made it harder for landlords and tenants to solve tenancy disputes in New South Wales, a move that is no good for anyone in the value chain, according to the president of the REINSW.

The NSW Civil and Administrative Tribunal (NCAT) is now powerless in any mediation between landlords and tenants when dealing with one or more parties based interstate, the High Court has ruled, and instead will require the matter to go to court.

“It’s stupid. It’s not good for anybody, it’s not good for the tenant, it’s not good for the landlord and it’s not good for the real estate agent, because… our court systems are already overburdened, so I don’t understand the logic in feeding these matters through to court as well,” Real Estate Institute of NSW president Leanne Pilkington told Smart Property Investment.

“It doesn’t make any sense when there is a purpose-built tribunal that can handle them.”

For situations when the property, landlord and tenant are all based in NSW, NCAT is still able to be involved, but for landlords that live interstate, NCAT is just not an option.

Normally, if you have a tenancy issue, you go to NCAT, you go to tribunal, and it’s a purpose-built tribunal for tenancy issues, and so it’s a fairly simpl process, and it’s fairly quick.

But now, if you have got a property in NSW, but one of the parties is not, so if you as a landlord live in Queensland or Victoria or wherever, NCAT is not able to hear your matter. It’s got to go to court.

The REINSW and Ms Pilkington lobbied for an amendment to be added to NSW legislation that allows for tribunals to double as a court for specific cases, which then allows for interstate parties to easily be involved.

“It’s just one simple line in the legislation in Queensland that allows them to hear the tenancy issues no matter where the parties are, and for whatever reason in NSW, they won’t do that. It makes no sense,” Ms Pilkington said.

“I can’t give you any logic around it. I wish I could.”

“The NSW government must act swiftly and effectively and make an amendment to the legislation through Parliament as quickly as possible,” said REINSW CEO Tim McKibbin in a statement.

Stay tuned to see where this leads, and in the meantime if you fall into this category (live interstate but have investment property in NSW) you should talk to your Property Manager to avoid potential problems. For Property Managers you should audit your landlords list and see who might be affected and provide suitable advice.

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Keeping Up with the Boomers

According to a recent survey Baby Boomers are planning to retire earlier than before – at an average age of 63.7 today rather than age 65 in 2013. One-third of these retirees will be selecting a new home specifically for retirement, either by purchase or rent. 33% of them will be downsizing and be moving to a specific location – near family and a relaxed lifestyle.

In certain areas that Boomers are moving to there is a huge opportunity in real estate for downsized housing meant for retirees. Most of the neighbourhoods and districts that are built around this theme have peaceful lifestyles with stable home prices and plenty of public amenities to attract the best clientele from around the nation.

All they need is someone to sell or rent them the dream! Revenue streams that could be a real possibility for property owners and property managers include the following.

Multi Occupancy – Retirees usually need much less space than families and first-time homebuyers. They can also be usually quieter than the average tenant. A property owner may be able to rent a granny flat or split residence.

Property management – Retirees can be some of the best-behaved tenants and homeowners a property manager could ask for. If you’re a professional manager who is looking for a good opportunity to make money at scale, focusing on retirement properties could be a great option for you.

Helping retirees find the perfect home – Many Baby Boomers want to live near family, golf courses, and parks. Property managers who can help retirees find homes, or apartments like these will have a huge opportunity as the Baby Boomer class retires – in very large numbers in the coming years.

As a property manager, looking for ways to make your properties more attractive to retirees or even soon-to-be retirees might find you some strong resident retention in the years to come.

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5 Things Your Tenants Hate!

It seems so simple, but somehow landlords and their property managers often forget that the tenant is the customer in this business. How many businesses treat their customers with disdain and expect to be successful?

Treat your tenants with respect; be considerate of the fact that the property is their home, and they will generally show you the same courtesy in return. Remember, these are the people you rely on to sustain the asset that pays everyone’s wages.

Happy tenants are more likely to look after the premises, pay their rent on time and allow random strangers to wander through their home at the end of a lease.

Communication equals cooperation, so you need to be amicable, approachable and professional in all dealings, and most importantly in 2018 you need to have access to the latest automated systems.

If your using either a standalone old-style server based trust system or a lightweight cloud product to manage property then you’ll be struggling. At present the best solution is a Trust Product (like REST or Console) backed up by a comprehensive system like the Cloud hosted OurProperty platform.

The following five things are what US based expert Michael Yardney believes that tenants hate the most when dealing with landlords and property managers.

1. Being treated like a 2nd class citizen

No one likes to feel disrespected. If a tenant believes the property manager they’re dealing with treats them badly, problems are more likely to occur during the tenancy as the lines of communication start to disintegrate.

Many landlords these days will find out how the property manager handles conflict and complaints by throwing a few examples their way and measuring their response. Landlords want a property manager who solves conflict not creates it.

2. Left to hang

Being ignored is another common bugbear. Let’s face it, we all hate being told ‘someone will get back to you’ and that just never eventuates.
Even if the response is, ‘We’re sorry but the landlord isn’t agreeable to your request,’ every query presented by your tenants deserves a timely response.

Here’s the tip. People forget things no matter how good they are at their job, you need solid automated systems and processes in place if you want great communication.

3. Bad management of maintenance requests

Quick and efficient processing of all maintenance requests received from tenants should be your number one priority.

If your trying to run maintenance using a manual or old server-based system then you have no hope of getting this right.

You need an established protocol around how to proceed in addressing different issues, along with specific instructions with regard to the extent of your delegated authority.

You need a system that brings the tenant, landlord and property manager together, so everyone is in the loop and decisions can be quickly made and executed.

Remember, you are legally obligated to maintain the property investment in safe, liveable repair, so this is an area you literally cannot afford to ignore.

4. Being kept in the dark

In this day and age, it’s inexcusable to not be advising the progress and approval of a repair or other type of tenant request. You need automated systems that ensure this happens, every time.

This is an area where renters experience significant frustration in many instances.

If something is taking a little longer to organise than anticipated, or requires multiple visits from tradespeople to obtain quotes, it’s essential that your tenants be kept in the loop and informed as to what’s going on. Again, you need automated systems in place.

5. Rent rises

While you’re entitled to increase the rent in line with market fundamentals, how the property manager approaches an increase can either make it more palatable to tenants or alienate them entirely.

By the time the question of an increase arises, a professional property manager will have established a good rapport with the tenants and have sent out a detailed CMA justifying a rent review that explains comparable rental prices in the area, making your tenant more likely to sign on for another year and less likely to pack their bags and head out the door, feeling hard done by.

The bottom line is, treat your tenants how you would like to be treated and make sure your property manager is doing the same. Most of us have all been tenants ourselves at some stage, so use that experience to display a little empathy for your residents and you’ll find it goes a long way in maximising your portfolio’s returns.

Curious to know more about OurProperty? Contact us today to start your free trial!

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A Post to Tenants from a Landlord (Brandon Turner)

If you’re a tenant, your landlord probably hates you. It’s not necessarily your fault, but there’s a good chance it’s probably true.

Landlords hire a property manager in most instances to avoid having to deal with tenants. Tenants irritate them, cost them a lot of money, and make their life a stressful nightmare. Most people think, that they’re not one of “those” tenants, but how sure are you?

This post is a look “behind-the-scenes” to help you get a glimpse of how landlords think and feel regarding the tenant, in an effort to improve your relationship with us; because we want good relationships. The most successful landlords are those with calm seas, and this post is designed to help calm the water for both sides of the renting relationship. Not only does it help your landlord — more importantly, it helps you!

Before I go on, let’s just get this out of the way: I know there are a lot of terrible landlords out there. Tons of them. Perhaps your landlord is one of them, and for that: I’m sorry. We’re not all greedy, mean taskmasters hell bent on making your life miserable.

However, no matter how bad your landlord is, there are things you can do to improve the relationship and make your life as a tenant better. This post is going to look at a few of the most irritating tenant traits, and offer some tips for being… well… less hate-worthy!

1) Unnecessary Phone Calls

When I first got started with landlording, I had a tenant call me up at 4:00 in the morning shouting “My sink is leaking water all over the kitchen!!”

I quickly jumped out of bed, ran out the door, and sped to the tenant’s place. When I arrived, I discovered the whole story…

A drain pipe has come loose under the sink, so when the tenant did dishes, small amounts of water would drip from beneath the sink. The tenant knew the problem only occurred when doing the dishes, but decided that 4 am would be the ideal time to do the dishes and call the landlord for a repair.

Okay — if your water line breaks and is shooting water all over the place, please call us. It’s important. We need to fix that asap.

However, if your kitchen sink drips when doing dishes… stop doing the dishes and call for maintenance at a reasonable time. If you don’t like the condensation that’s building up on your window during the winter… please grab a towel and wipe it off. If your neighbour parks in the wrong spot once, please just ask them to move. These are not issues you need to call me about.

I can’t tell you the number of phone calls I’ve received in which it took the tenant longer to call me than it would have taken for them to address whatever issue it is they were so concerned about.

A landlord’s job is to provide a clean, functional place to live — but it’s never going to be perfect. Call when it’s important, but don’t call when it’s not! Your landlord probably has a very busy life outside of their real estate endeavours, so seek to make yourself only a small part of it.

2) Not Reporting Real Problems

Several years ago I was walking through the parking lot at one of my properties and a tenant came out and asked me if they could move to a different apartment unit.

I asked “why” and they said because there is too much mould in their unit. I quickly followed them upstairs to their apartment and discovered that the roof had been leaking severely for years, causing an impressive amount of mould to grow across their ceiling. I immediately called the appropriate contractors and they completely fixed the problem, costing me thousands and thousands of dollars.

All of this could have been avoided if the tenant had simply mentioned years ago, “hey, there is some water dripping from my bedroom ceiling.”
I know I just got finished telling you NOT to call me about silly maintenance concerns. However, not calling about important ones is even worse.

If you know anything about maintenance, you know that a small fix now could save tens of thousands of dollars later. So please… call me when it’s important. I’m not going to raise your rent or mock you about your messy apartment when you report a real problem.

3) Late Rent

Somewhere in society, people got confused.

There is a belief that all landlords are wealthy; that we just take your money to buy beer, boats and cigars. However, the fact is: We don’t play this real estate investing game because it’s making us super wealthy today… we’re in it for our retirement. (For more on how this whole “real estate investing for retirement” works, check out “The Ultimate Beginner’s Guide to Real Estate Investing.”)

Many landlords actually lose money every month, or make less than minimum wage with the work we do. We have the monthly mortgage payment, the property taxes, the insurance, the maintenance bills, utility bills, lawn care bills and a handful of other bills that all need to be paid — and guess what: we can’t simply call them up and explain that our tenant spent their money on something else.

I understand that life is hard. I really do. I’ve lived paycheck to paycheck nearly my entire life, and I know there is often more “month” than “money.”

However, I also know that your rent payment is never a surprise… it comes every month. It’s easy to turn “routine” into “low priority” but this is what drives landlords crazy. We check out your Facebook page, and see that you posted about your brand new “Xbox One“ just days before your rent was due.

Yes, this happens all the time, and we hate it.

If you aren’t good with managing your money, that should not be your landlord’s fault. Spend some time listening to Dave Ramsey or reading some personal finance blogs and get your stuff in order.

If there truly is an emergency and you really can’t pay rent, call us far ahead of time and let us know the situation. Have a plan for how you are going to make things right.

Above all: don’t bury your head in the sand. Be proactive about your rent payment issues!

Conclusion

This post has been a little negative, but to be honest — 90 percent of my tenants are absolutely wonderful people who do things right. They pay on time, call at appropriate times and don’t cause me tons of stress! I sincerely hope that’s you.

However, it’s the other 10 percent of tenants that cause me 90 percent of my headaches and drive me absolutely insane. Please, please, please… don’t be that tenant!

Be a tenant that has the respect of your landlord will help you avoid rent raises, get maintenance concerns fixed quicker, and potentially get you less stress in the future. Hopefully this post can help transform you from a tenant your landlord hates to a tenant your landlord loves.

And if you’re a landlord, you need to find a great property manager and have the job done professionally !