Hi Small-time,

Well done for taking the time to calculate and understand the figures in advance.
I notice you’ve used 6% Closing costs for the deal, and I’m not sure what these are, but you should be allowing for Stamp Duty on the property, legal fees, stamp duty on the mortgage, loan application fees, and building & pest inspections.

We generally allow 30% instead of 20% of the rent to cover overhead expenses such as rates, insurance etc. Other costs you can claim are:

Advertising
Body Corporate fees
Cleaning
Council Rates
Gardening
Insurance
Interest
Land tax
Legal fees relating to tenants
Pest Control
Property Management fees
Motor vehicle per km
Repairs and maintenance
Stationery, phone and postage
Travel and accommodation
Decline in value (Your Accountant will calculate this)

The Tax Office have a 2006 Rental Property guide that you can download, here’s the link: http://www.ato.gov.au/content/downloads/NAT1729-06.pdf

You may also find many of the free downloads from our site of help also.

Happy investing,

AmandaBS
http://www.propertydivas.com.au
FREE online Property Resources

“It is better to be inconspicuously wealthy, than to be ostentatiously poor…”

Hi Ruroshin,

I must admit I’m not a big fan of such investment firms such as ARPP, fine if your a “Speculator” but for serious property investors you need your own system to suceed in this game. Don’t gamble and trust someone else who’s pocket will be lined by your hard earned dollar. $$$.

On a brighter note though, Richard Taylor also gets my tick of approval.[thumbsupanim]

For a building inspector contact “Australian Building Inspection Services” http://www.abis.com.au. They can do both a building and termite inspection.

AmandaBS
http://www.propertydivas.com.au
FREE online Property Resources

“It is better to be inconspicuously wealthy, than to be ostentatiously poor…”

Hi Bsgupta,

Welcome to the exciting world of property investing!!

Here’s a simple 7 Step process to follow;
Step 1 Set your ultimate goals
Step 2 Prepare a budget
Step 3 Read and develop an investment strategy
Step 4 Build a strong team around you of property professionals
Step 5 Research an area
Step 6 Prepare a Feasibility study
Step 7 Negotiate the deal and repeat.

Its that easy!! Need more help then visit http://www.propertydivas.com.au where you’ll find more details.

Happy investing,

AmandaBS
http://www.propertydivas.com.au
FREE online Property Resources

“It is better to be inconspicuously wealthy, than to be ostentatiously poor…”

Thanks Dr Spock and happy new investing year to all on the forum!!

I’ve got some great things planned for our website in 2007 and look forward to sharing ideas with other likeminded positive people.

Best wishes to all,

AmandaBS
http://www.propertydivas.com.au
FREE online Property Resource

“It is better to be inconspicuously wealthy, than to be ostentatiously poor…”

Hi Paybac,

There is more to finding the next “boom” area than a new link road. Certainly this will help in the long run. Major infrastructure improvements in an area when first announced can see prices move, but the biggest increase will come once the project is complete and people can see the benefits.

Look out for other signs such as a Developer coming in and buying property.

Council re-development plans for the area.

The biggest influence however is population & migration growth – more people there’s a greater demand for houses to live.

Check out the major employers or industry moving to an area – jobs attract people who need somewhere to live.

Amanda
“It is better to be inconspicuously wealthy, than to be ostentatiously poor…”

Hi Aslam,

What a brave person you are, certainly everyone has lots of opinions. From my point of view for most people their home is their largest single asset so when it comes time to sell you need to select a Real Estate Agent carefully.

Firstly you need to feel confident about the agent and this can be determined by asking the following questions:
• What industry experience do you have?
• Are you familiar with the area and price range our house will be listed?
• Can you provide a reference from a previous seller?
• How many homes have you sold in the area recently?
• How many days do you work and is the office open 7 days per week?
• What feedback will you provide us with?
• How do you qualify potential buyers?

Generally, a Real Estate Agent should have a professional image, be committed to the industry, and display a high standard of personal grooming. (Source: http://www.propertydivas.com.au)

Amanda
“It is better to be inconspicuously wealthy, than to be ostentatiously poor…”

Its often very overwhelming when you first start out looking at property. Have a look at http://www.propertydivas.com.au where you’ll find a simple 7 step process to get you started in property. The site also contains heaps of free downloads, templates and resource lists.

Best wishes,

Amanda
“It is better to be inconspicuously wealthy, than to be ostentatiously poor…”

Yes, we purchased a property on Xmas eve last year at a significant discount. The property had been listed for some time and had already had a contract fall over so the vendour just wanted it sold. He told the agent that he just wanted to sit down to Xmas lunch to celebrate and enjoy the day, and not have to worry about the unknown.

On the other hand we sold a property in November with a short settlement for full list price because the young couple wanted to be in their new home for Xmas.

Who knows ??

Amanda
“It is better to be inconspicuously wealthy, than to be ostentatiously poor…”

Hi KDT,

The following is an extract from the website http://www.propertydivas.com.au

“…There is considerably more to Property management than just collecting rent – ask any property manager! Good property management plays an important role in ensuring your property receives maximum returns and remains in tip-top condition.

The types of management options available can be broadly classified in two categories:
1. Appoint a professional Property Manager; OR
2. Manage yourself – “DIY” Landlord.

Role of a Property Manager
An efficient property manager is well worth the relatively small fees charged. Responsibilities of a manager can include:

• Appraise the property for rental and assess the market rental amount
• Interview, screen and select suitable tenants
• Prepare initial condition report, lease documentation and bond authority and collect initial payment
• Receive rent and chase late payers
• Conduct periodic inspections
• Report damage or maintenance issues to landlord and arrange for rectification where appropriate
• Handle all tenant communications
• Co-ordinate the moving out of tenants at termination of lease
• Appear before Tribunal in cases of rent default or other serious issues.

Having a professional property manager on your “team” will help ensure maximum return on your investment property and remove the frustrations often associated with dealing directly with tenants, as well as saving you considerable time and hassle.

What should I Look for in a Property Manager ?
Although property mangers are usually part of a real estate office, they should ideally be a separate department from the general Sales area. To reduce the risk of problems arising, you should ensure the office has efficient business systems and procedures in place to deal with daily issues that may arise such as emergency repair requirements and late rent payments.

Your property security is important so insist that the property manager conducts personal inspections, rather than just hands out keys to strangers who walk in off the street. This opportunity will allow the property manager additional time to assess the character of the applicant and ask questions.

Take the time to interview several property managers to ensure you feel confident about their role. Ask your potential property manager questions, such as:

Suitability:
• How long have you been a property manager?
• What qualifications and ongoing training do you have?
• Do you have a good up-to-date understanding of State legislation and important caselaw?
• What property investment background do you have?

Financials:
• How would you assess the market rent on our property?
• How would you maximise the return on our property?
• What initial letting fees and commissions do you charge?
• What ongoing letting fees and commissions do you charge?
• Do you charge re-letting fees if a tenant re-signs at the end of a lease or leaves early?
• Do you charge for attendance at Tribunal and associated administrative work?
• Do you charge any “hidden fees” such as for fortnightly/monthly statements or administrative tasks?

Procedures:
• How will you advertise and market my property and what costs are involved?
• How do you document conditions reports and do you take photos?
• How do you screen prospective tenants and what references and other checks do you make?
• How much bond do you collect and how do you carry out the administration for this?
• How often is rent collected and paid?
• What procedures do you follow if rent is unpaid?
• How often are inspections made and what procedure do you carry out?

Finding the right Tenant
Applicants should be required to complete a standard form detailing personal information including current and previous addresses and whether they are rental properties. Photo ID and proof of income should be shown and employee and character references should also be provided. All information should be carefully checked and verified by the property manager and a check of the National Tenant Database should be carried out. Based on all the details collected a comprehensive assessment should be made of each applicant.
The property manager should then discuss all applications with the landlord and recommend the best choice. Once a suitable tenant has been found, a tenancy agreement will then be prepared along with a condition report, lease and bond form, all of which require signature by the tenant. The condition report should be backed by photographic evidence of the condition of the property (both inside and out), which may be used as proof in the event of a dispute regarding the state of the property at a later stage.
When a tenant vacates the property, the property manager should provide the tenant with a detailed checklist of items requiring cleaning and attention before leaving and should reinforce that, subject to normal wear and tear, the property must be left in the same state it was in when the tenant initially took occupation of the property. You as the owner should also be offered the opportunity to inspect the property before the bond is refunded.

“DIY” Landlord
Many property investors choose to manage their own investment properties. While you may save on fees, it can be frustrating dealing with and selecting suitable tenants and the paperwork can prove to be an administrative and legal minefield.

Nevertheless, may investors do successfully and happily manage their own properties and they are happy to carry the burden of doing so and put in the extra time required in return for saving on the rental fees and having greater peace of mind regarding knowing what’s going on regarding the property in general.

DIY landlords must be aware of their legal requirements and must also ensure that personal contact is kept to a minimum and that sensitive issue such as raising rent are discussed without incident.

To access the DIY Landlord checklists, pro-forma letters and templates go to http://www.propertydivas.com.au

Lease Renewal (Word Document)
Lease Renewal (PDF)
Rent Arrears (Word Document)
Rent Arrears (Pdf)
Entry Notice (Word Document)
Entry Notice (PDF)
Rental Ledger (Excel Spreadsheet)
Property Rental Application (PDF)
Landlords Property Rental Assessment (PDF)
Annual Rental Inspection Checklist (PDF)

Amanda
“It is better to be inconspicuously wealthy, than to be ostentatiously poor…”

http://www.propertydivas.com.au

This is a new website to help people like yourself get started in property investing. You’ll find a simple 7 step process to get you started in property, plus the site also contains heaps of free downloads, templates, resource lists and useful links.
Membership is Free.

Amanda
“It is better to be inconspicuously wealthy, than to be ostentatiously poor…”