Forum Replies Created
- Nilix wrote:Kate Melb,
Hey whats this DYI Manage with Rent Wise? If you DIY manage doesn’t that exclude you from being able to use Land Lord Insurance? It must be a load of work, thinking about the places I rented back in the day, calling people about leaking taps etc.
Not at all Nilix (my favourite Voyager character). No insurance exclusion – landlord’s insurance relates to the IP status of the property, not who’s managing it.
Barely any work at all, just paying the odd bill and fixing a once-in-a-blue-moon thing like a leaking tap. Few phone calls = no big deal. Got sick of paying PMs $1000+ a year to do 2 hours work and then you can’t even reach them on the weekend. All the legal info and forms are available for free, online and in plain English from the Consumer Affairs Department.
Only use PMs to find tenants, but all of mine are long-term now. After all these years I’ve never needed to go to the tribunal or evict anyone but might use a PM to help with that should that ever happen.
In the meantime, I’m taking the money I’d spend on a PM to invest in improving my properties, which increases the depreciables and capital growth and keeps the tenants happy.
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I DIY manage with Rentwise.Bentleigh East is ridiculously overpriced for a suburb without a train line within walking distance, or any good schools (only a handful of streets are in the McKinnon Secondary College zone).
Try Clayton, Carnegie, Murrumbeena and Hughesdale along the Pakenham train line or Cheltenham, Moorabbin, Mentone and Highett along the Frankston train line. These areas are in demand as more and more people are pushed out of McKinnon, Caulfield, Bentleigh and East Malvern due to lack of rental stock and affordability.
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I DIY manage with Rentwise.pijoko wrote:I imagine, since I paid the property manager to find the tennant, I have every right to not renew the property management contract, and continue managing the property myself with the existing tennant.You’re absolutely right. Check the management agreement to see if there is a notice period for terminating the contract after the exclusive period ends. This might be something like 14 days after written notice, but even if there is no compulsory notice period, it’s good to give the PM 14 days anyway so you can transfer bills to your address and contact the tenants re the new rent payment arrangements in the meantime. Don’t rely on the PM to do this.
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I DIY manage with Rentwise.DWolfe wrote:Due dilligence is about making sure what you are buying is a good investment.So true, Mr Wolfe (Pulp Fiction flashback!), but it’s not only about that. Adopting a more selective, patient approach has delivered me steady capital growth, high depreciables and long-term, happy tenants.
To me, due diligence involves taking into account a wide range of things, including figures and formulae, others’ war stories and common sense. The more information the better. Never trust the spin of one person – check all the facts and make an informed decision. You can only benefit from it!
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I DIY manage with Rentwise.
sonyasal wrote:I have just looked at a property that i personally don't find very appealing, however, it's proximity to all facilities is excellent and the rental facts and figures show a great return and about 2% vacancy rate over a very long time frame (10 plus years.) Needs some work done to it, just doing the number crunching to determine if i go ahead with it or not.Sonya
Sonya, don’t just go on facts and figures and facilities. What is it that you don’t find appealing? I only invest in IPs that I personally could see myself living in e.g. lots of natural light, not too noisy, secure entrance, courtyard or large balcony etc. This way, I will attract like-minded tenants who are more likely to be comfortable and stay longer. Having facilities nearby isn’t enough – the place itself has to be homey. You can always renovate and add the depreciables.
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I use Washington Brown for the QS report and Rentwise to convert it into my tax return. Both are Australia-wide.
AndrewH wrote:he says he will do all the paper work from the bank, solicitors, purchase of the property , looking after the property, rental tentants, insurance Etc. He works with around 8 people, who have been in the investing industry for a long time now. He says one of his people even rubs shoulders with the councils to determine plans for the suburb etc.
I don’t believe in paying someone to do something that you can easily do yourself.
1. There is no paperwork to do from the banks – loan documents come as a set prepared by the bank or its lawyers. You simply read, sign and return.
2. If you need a lawyer or conveyancer to assist you, pick up a phone or send an email and deal with them directly. This will save heaps of time compared with a third party constantly running back and forth between you and the lawyers. The more the lawyers are on the phone, the more they’ll charge.
3. As for purchasing the property, you sign the contract and then it goes to your bank and lawyer. Nothing else.
4. Looking after the property – this isn’t rocket science. If you can pay your own bills and fix the odd broken thing in the place you live, you can certainly manage your own investment property and save thousands on property management fees. Services like Rentwise make it easy for DIY property managers.
5. Getting tenants – use a real estate agent and pay them no more than two weeks’ worth of rent + $100 for internet advertising. All they’re doing is opening the door for 15 minutes and making a few phone calls to check applicants’ references.
6. Insurance – no need to pay more than $200 a year for landlord’s insurance. Try Lumley or EBM or contact an insurance broker like Whitbread.
The line about influence at Council is nonsense. With anti-corruption commissions and intense media attention, the days of undue influence and mates rate at local Councils are long gone.
cinooo wrote:Also unrelated to this topic, I have been looking at the type of insurance I will require. If I am using this an investment property and will be lending it out, is Landlords insurance the only type of insurance I need? Does anyone have any recommendations of who to go with?Most competitive and broad coverage I’ve found is with Lumley (Westfarmers) via Whitbread Insurance Brokers in Melbourne (can’t go to Lumley directly – I checked!). Even cheaper than EBM.
I wouldn’t pay more than $200 a year for a standard landlord’s insurance policy which should include $20,000 for accidental damage, $20,000 for malicious damage by tenants, $5,000 for theft, 15 weeks for tenant rent default, 52 weeks for loss of rent following physical loss or damage and $20M legal liability.
You may only need to use landlord’s insurance once in your investment lifetime, but the cost would still be worth it. Imagine if your place was severely damaged and unable to be rented out – would you be able to pay the mortgage?
Building insurance is also essential in the event of a fire, storm, etc. If the property is under strata title, building insurance is covered by the body corporate fees. But make sure the amount insured is enough to cover the replacement value of each unit/apartment (check with the body corporate – you are entitled to a copy of the insurance policy).
Commercial properties have relatively high returns (in a healthy market) and provide steady returns, but the capital growth is poor. If you’re looking to make money through capital growth and by drawing on the growth in equity, I suggest investing in residential property.
Anything within 10km of the Melbourne CBD is solid gold because of the housing shortage. I’d look for quiet residential streets within 10 minutes walk of train stations, parks, shops, cafes, schools, kindergartens and main arterial roads. Look for places that are less than 7 years old but beware of off-the-plan developments: these are usually overpriced and will rob you of the first 2-3 years of capital growth.
As for your farm, I’d subdivide and sell if the location is favourable in relation to zoning and the urban growth boundary. The land is much more valuable if it can be developed into residential blocks than remain a going concern farm.
Good luck!
Very skeptical about this – properties can look great on paper, but later on you can find yourself without a tenant for long periods or with no capital growth after a year because you didn’t do proper due diligence.
There is no substitute for using your eyes, ears and common sense. For example, when you visit a potential investment:
* Look at the quality of the fixtures and fittings – this will indicate how much you can depreciate. If you’re trying to maximise depreciation, avoid refurbished places.
* Note the orientation and privacy of the property – if it’s too noisy, dark, cold, hot or lacking in privacy it won’t be attractive for tenants or they won’t stay for long.
* Walk around the neighbourhood and note the nearby facilities. Is there public transport nearby? Cafes? Shops? Schools? Parks? These are the facilities tenants want to live near. Having all of these nearby will increase the value of your property over time as land close to such places becomes more scarce.A smart investor takes the time to do their due diligence in order to ensure they make the right investment.
If you’re interested in a high return (average 7% p.a. compared with 4% average for normal residential) then yes, they’re very good. But if it’s capital growth you’re after, steer well clear.
