Forum Replies Created
Maree,
The tenant would then have to pay an excess and their premiums would be likely to go up. Whilst I agree it was downright silly of them to keep using the driveway even though it was damaging their car, tenancy tribunals will likely see it as follows – the use of the driveway damaged the car, the landlord didn't do anything about it, tenants eligible for compensation.
I'm not saying it's fair at all, but generally speaking tenancy tribunals are tenant focused… Although we all wish they weren't!
The idea here is to negotiate an amount of compensation with the tenants… not necessarily the full amount it would cost to repair the car. Because if the matter is elevated it is highly likely the tenants will be awarded full compensation and a small rent reduction until the driveway is useable.
I've also heard the Gold Coast market is not great at the moment and a lot of industry emails I've received lately have been noting Hobart's inner suburbs as having some really good buys due to a recent slow market.
I'm surprised your agent let you sign the contract of sale on this considering the Gold Coast market, but then again I'm not aware how oversupplied or slow the market is where you are.
Based on the data I can get for the suburb, 4 months on the market is above average. Chat to your real estate agent about refreshing the internet advertising by taking it off the market for a day or so and going back on again with a variation in the body of the ad & perhaps a fresh photo from a different angle.
Internet real estate portals sort listings by date, taking it off the market for a day won't hurt your cause because the property will pop up at the top of the list for searches when it's back on. Based on reports that the market has a high rate of oversupply, it's likely your property will be sitting at the bottom of the list.
You could try the drop cards, it really wouldn't hurt. I would highly recommend having your real estate agent arrange professionally printed drop cards if they are prepared to. With a lot of media coverage on property scams, people may be suspicious you are not offering a legitimate deal if you've got home-made drops.
I'm not 100% on legislation in Tasmania, but as I understand it all offers are presented in writing via a contract of sale. I am assuming by your first post that you have accepted the offer, if a deposit has also been paid you don't have much flexibility unless the contract is cancelled by mutual agreement in writing and the deposit refunded. Check with your agent as to your options under legislation.
My apologies for not clarifying – serviced apartments on a commercial lease. No vacancy during the lease period which can be up to 25 years, no cleaning, very small management fees if you choose to have someone manage it for you (they're essentially collecting rent and overseeing the lease).
A usually overlooked option – serviced apartments.
They can offer fantastic yields, secure tenants, little to no outgoings (depending on the lease structure) and I've seen some great ones in Melbourne over the past year for under $160,000
The down side – very little CG, can be difficult to get finance from some lenders.
Andy – your PM should be communicating clearly what the tenant is requesting and letting you know you options. Despite your unit being rented below market value, a rent reduction would be a reduction from the rented amount stated in the lease agreement due to loss of use of the garage.
In future you have two options – to push with the owners to get the driveway fixed, pointing out that being unable to use it will affect their property's value and saleability.thecrest – PMs won't attend to a large issue like this without consultation with the owner, if they had arranged a huge repair to the driveway and sent the owners the bill you can imagine the headaches it would cause. If it was reported, they have clearly not communicated correctly with the owners… which is terrible!
NM7 – that's a fantastic outcome and I applaud your ingenuity in tracking down the installer. If the tenants did not agree to pay half the water bill, you would have to calculate the tenant's average usage, have them pay their normal usage portion and cover the rest. Personally, I would try it on with the builder and the installer to get it paid – some may consider this a bit cheeky but if they're at fault they'll pay or you can take action against the builder (although this can be long-winded and expensive). Technically the tenants were not at all liable to pay the additional water as it was due to a required repair, so you did well.
Is you apartment also located on the Gold Coast or close surrounds?
NM7,
No, it does not cover where the tenant cannot access the globes – the landlord will need to arrange a tradesperson. For example we have a property where there is a light in a stair well that is not accessible so we would arrange a handyman at the cost of the landlord.
I can't comment on whether RACV covers light bulbs I don't have any clients using this service as yet, you'd need to check the policy.
Relying on one industry to support the infrastructure around your investment is a huge risk. The Maronbah property market is in crisis right now and industry experts have actually black listed the town and recommending clients not to invest there.
If the mine has an estimated life of 20-30 years it's a different story, but only if you get in early.
This is a great service!
Shivasko, you can never expect a tenant to pay for maintenance so you can't expect a tenant to pay for this cover themselves.
We run a 24/7 emergency service for tenants and have for years, it works really well to save owners on re-paying tenants for expensive call out fees as our tradies are really reasonably priced.
If the tenant had an emergency after hours problem, they could claim the cost from you up to $1000.00 in Victoria under the Residential Tenancies Act.
Tenants responsibilities in terms of maintenance (under legislation) are:
– replacement of light globes
– to report any maintenance to the landlord before further damage occurs
– to repair any damage caused by the tenant or the tenants visitorsThe only instance where tenants are liable to pay invoices for maintenance is if they caused the problem i.e. they flushed something down the toilet and caused a blockage – which you must prove with a plumbers report.
Lease agreements with stipulations outside the Residential Tenancies Act don't mean anything more than the paper they're written on because if the matter is heard at the tribunal (Victorian Civil Administrative Tribunal), they will throw out any clauses in the lease agreement that do not adhere to the Residential Tenancies Act.
The key is always do your research before listing with an agent.
But now you're there, there are a few things you can do:
- Don't just ask for an inspection register, also ask for feedback as to what the buyers have said about the property. If your agent can't provide any, it's an indication as to whether he has contacted them after the inspections to gauge their interest. Tell him you require feedback as part of his report.
- Remember it may be the market conditions in the area. Consider renting the property out in say 3 weeks if there is no genuine interest or offers and let buyers know that date. Sometimes buyers who see a property on the market for quite some time think that they have the opportunity to shop around because it has been there for so long.
- Tell the agent you are unsatisfied with his results and ask what he intends to do about it short of suggesting more advertising – more money for you to spend!
- As much as it may be an expensive exercise to cut your losses and choose another agent, it could mean the difference between a quick sale and months on the market. Check the agreement your have with the agent as to whether you can cancel it now. Research local agents really well and don't just choose on price, check if they have sold something similar or in the same street recently – they may have contact with buyers looking for a property just like yours. Another plus to changing agents is the listing will be fresh on all the real estate portals and therefore come up first on buyers' searches.
Below is a link to a thread with tips for choosing an agent:
https://www.propertyinvesting.com/forums/property-investing/general-property/4344370
I wish you the best of luck!
Which state is the property located in? If it's in Victoria I can definitely offer some advice on this.
The tenants have rented the property in its current condition. Having said that, because the property was rented inclusive of a car space, access to the car space/garage/car port must be functional.
First of all, is the driveway common property (one driveway to the garages of all units)? If so, the owners corporation/body corporate should be made aware of the issue and a request made to seek a remedy and compensation may be able to be lodged with their building insurance under public liability. There may be a clause in which the tenant needs to take the owners corporation/body corporate to the relevant tribunal and an order made before a claim is lodged with the insurance company. This is dependent on the details in the policy.
If the driveway is not common property and they've been good tenants in terms of rental payments and keeping the property well maintained, I would definitely suggest negotiating an amount of compensation if they can provide 2 quotes for the repairs to the car. If the previous agent had reports from the tenant of this issue and did not forward them to you, then you will need to seriously consider full compensation to the tenants. You will need to rely heavily on your agent's negotiation skills by the sounds of it the tenants aren't happy.
Bottom line is – this issue with the driveway causing damage will need to be solved to prevent future claims for this tenant or another. A concrete repair company may be able to shave down the existing concrete to make the driveway more useable. It won't be a cheap exercise, but it may prove a good move in the long term.
This sounds like it could be an unfortunate example of a lack of communication on the agent's behalf, something that I hope will be weeded out of our industry as property owners become more educated and involved in ensuring their asset is well looked after.
Agree with Derek's post, the best way to find out is ask your friends how they did it. If they have an agent, contact the agent to find out whether they have a connection with a mining company. Be sure to ask if they can prove this though with a contact's name, don't just take their word for it!
I may sound biased as I am a property manager myself, but having a real estate agent managing your investment is a must.
At a Residential Tenancies Tribunal hearing we assisted a landlord who had a self managed property that had become a mess, the member hearing the case said "Not having an agent manage your property is like driving a car without a license. You don't know the laws well enough and you won't realise it until someone gets hurt."
Firstinvestment24,
There are multiple developments due for completion in 2014 in Southbank. In my opinion the market will flood with rentals as we saw with the earlier City Rd developments.
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Hi quattro4,
Why not bite the bullet and get a full time property manager? The fees are tax deductible and it takes the hassle out of having investment properties if you go with the right agent.
After all, you're too far away to rush over and inspect an urgent repair and how can you be sure you'll have the time to conduct regular inspections? What if the tenant absconds? How will you know if they're sub-letting?
I highly recommend Harcourts (just Google them), they have great systems in place and a high focus on property management. I'm sure you'd be able to negotiate a deal on fees since you have multiple properties.
v8ghia,
On points 1 and 2 I disagree. From experience both working in the industry and selling my own home, you get what you pay for.
Agents that cover advertising work on quantity sales, not quality. This means that they rush to sell your property and are generally not looking to achieve the best price and unconditional contracts because they need to sell asap to recover their costs.
A really good marketing plan could mean the difference of thousands of dollars in the sale price as it can create competition between buyers. A recent auction campaign at my office produced included $9,500 of vendor paid advertising including a video tour and top of the line brochures. Auctions in this property's suburb had low clearance rates so we opted for a large campaign. The property sold at auction for $1.48M – $100K more than the property was valued at… remember all that was spent to achieve this was $9,500 – a good result.
Low commissions are also a huge mistake because an agent will work harder for higher commissions. Remember you're not the only client they have! A better way of ensuring your agent is working hard for you is to offer a bonus for achieving a price higher than expected. For example:
Commission (incl GST): 1.32%
Agreed Sale Price: $400,000
Commission: $5,280
Bonus: For every $10,000 above the agreed sale price the agent shall receive $500 in addition to commission percentage.This encourages an agent with a low commission structure to work harder to achieve a higher sale price for you.
Hi Firstinvestment24,
The first piece of advice I will give is… you won't achieve that rental. When the building is complete and investors put their apartments on the market, there will be a flood of available properties in the building. If the apartment is a one bedroom with a car park and a balcony, expect a rental of $400 to $430 per week when the development settles due to flooding of the market. Also be prepared for a vacancy period.
I've seen this first hand with clients of ours who paid $480,000 for a two bedroom apartment off the plan in Carlton. The agent that sold the property to them off the plan quoted a rental of $500 per week. It went on the market at settlement (as did 40 others) and despite our recommendations that the rent rate was over-quoted, the owners were relying on achieving $500 per week. After 5 weeks on the market (and many price drops), it leased for $400 per week. We had many properties in the development, all of which leased for less than quoted by the developer's agent. This is an example of an extreme drop.
The agents pitch 'massive stamp duty savings' but a majority of what you don't pay in stamp duty is added to the cost and goes into the developer's pocket. NEVER take what you hear in a show room as the whole picture. Get advice from local agents in addition, double check the figures you're given.
The first home buyers grant only applies if it is your 'Principal Place of Residence', so you would need to live in the property to claim the bonus.
Depreciation is your friend! Every year when tax time is coming close, arrange a Tax Depreciation Schedule to be prepared by a qualified quantity surveyor ($500 to $600 cost – tax deductible) and claim depreciation in your tax. The main factor behind many of our client's choice for buying off the plan is the tax benefits that come with depreciation.Before you invest in anything… you need to decide the type of investment you need. With property, do you want something that will be negatively geared (i.e. the expenditure is higher than the income generated and the losses claimed back through tax), neutral (no loss, no gain in income/expenditure until sold) or positive cash flow (minimum outlay, more income than expenditure).
I'm not a fan of flashy showrooms for off the plan purchasers. I have clients send me along to have a look for them after they've met a 'lovely' salesperson on the weekend and been 'wowed' by the 'great opportunity'… but if it sounds too good to be true… it is.
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Kristin Simondson
Peter Barnes Real EstateI agree that Dandenong, Springvale and Noble Park will pick up in the future especially with the Northern corridor filling quickly and future planning prospects are positive.
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Thanks for the advice everyone, I'll keep looking.
I've found that those looking for the information would rather have it at their fingertips than go to a website and trawl for what they're looking which I find quite strange!
Recently there has been a HUGE shift in demand for Southbank property for lease. Properties in the area are now demanding higher rents than comparable CBD properties.
If you have an apartment in a low-rise building, I'm assuming there are less than 20 apartments in the building. This is capital growth gold. When my clients ask what to look for in an investment property, the first thing I tell them is EXCLUSIVITY. Both tenants and owner-occupier purchasers will generally pay more for a property in a smaller development. Whilst the Southbank area grows and larger developments pop up, your apartment has a point of difference – it's not surrounded by hundreds of other apartments above and below.
Stick with it if you can, keep the property in good condition and ensure small improvements (such as fresh paint in between tenancies or appliance updates) are carried out and don't be intimidated by larger developments – they are good for you!
Also another point to think about, around 50% of property owners miss out on thousands of dollars each year in tax deductions as they neglect to claim depreciation. No matter the age, most properties are eligible for depreciation claims. Every year you should arrange a Tax Depreciation Schedule (cost between $500 and $700 – also deductible) to ensure you're receiving your maximum return.
Furnished rentals worked exceptionally well in the Southbank area and can provide a higher gross rental return and more tax deductions though depreciation on furnishings. Melbourne Corporate Rentals are a company that specialise in this type of letting and can advise on the best options for gaining higher returns.
Carlton is a great suburb for continuous rental return. Due to its close proximity to Melbourne's CBD and it's strong cafe culture, it's a suburb regularly sought out by tenants.
Working as a property manager in Carlton, I've seen first hand the high demand for good quality properties from professional and secure tenants. Whilst the rental market has slowed over the past 12 months in Melbourne's inner suburbs, all of our properties in Carlton 3053 have leased with a minimum vacancy period (we always allow 3 days between tenancies in the event of any small cleaning or maintenance items to be attended to).
68.4% of properties in Carlton are rented, with units returning 5.5%-6.8% rental yield annually.
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As always, you should contact a financial adviser before making any final decisions. Whilst most property investors choose to 'go it alone' when making purchasing decisions due to the cost of consultations, I've seen many a new landlord overlook small costs or outcomes when making a purchase that has landed them in 'hot water'.
