Real Estate

AUGUST 2021 PROPERTY REVIEW

SEPTEMBER 6, 2021

Posted by Monika Malolepszy

Over August, the national residential vacancy rate sat at 1.7%. During this period, national asking rents grew for both units and homes nationwide. This rise has been driven primarily by growth in regional rents. SQM Research suggests that this could be due to the lockdowns, which may have encouraged more people to move to regional areas in a bid to escape the latest restrictions.

Vacancy rates

Over the month of July, the residential vacancy rate sat at 1.7% Australia-wide with 61,313 residential properties recorded as vacant across the nation. This is a jump up from 60,468 recorded in June. 

In Sydney, vacancy rates dropped from 2.8% in June to 2.7% in July. However, in the Sydney CBD, rates rose to 6.1%, most likely a reflection of the new lockdown rules. While in Melbourne, the vacancy rate grew from 3.5% to 3.6% overall and fell to 5.7% in the CBD. The vacancy rate sat below 1.0% in Adelaide, Darwin and Hobart, singing good news for owners in these states. Perth, Brisbane and Canberra saw no changes in their vacancy rates over July. 

Louis Christopher, Managing Director of SQM Research said, “Current tight rental vacancy rates are driving up rents across Australia. It is somewhat perplexing to see both regional Australia and the Capital cities record surges. Given the ongoing international border closures and still relatively high completions.”

Rental values

Over the month to 4th September, national asking rents rose by 0.9% for houses and 0.8% for units. Units grew to $401 per week, while houses rose to $532 per week. Compared to the previous year, house rents grew by 15.7% while units rose by 8.1% nationally. 

The national rise over the past month has been propelled by increases in regional areas, more so than the elevation in capital cities. SQM Research attributes this growth in regional areas to the lockdowns, which may have encouraged more people to move to regional areas in a bid to escape the latest restrictions. This can be seen in the fact that the capital city average for units remained the same over the month, seeing no increase in asking rents. However, houses still rose by 0.7% in asking prices over the 30 days up until the 4th of September. 

The largest increase was seen in units in Hobart, which saw an increase of 2.9% over August.

Property prices

Over August, asking prices in Sydney dropped by 0.4% for houses compared to the previous month. However, prices in Sydney rose by 4.2% for units. Meanwhile, house prices grew by 2.8% in Adelaide, 0.2% in Melbourne, 2.3% in Brisbane and 21% in Darwin. Property listings across Australia dropped by 9.6% during August. In comparison to the same time last year, listings have decreased by 26.3%. The number of new listings on the market (less than 30 days) decreased by 7.8% over August compared to July. 

Louis Christopher, Managing Director of SQM Research said, “Listing counts over August were predominantly impacted by lockdowns, particularly for Sydney whereby there was a 19.7% decline in new listings.”

Cash rate and predictions

The cash rate was held unchanged at 0.1%. The board has signalled that the cash rate is likely to remain on hold until 2024 at the earliest.

Real Estate · Uncategorized

#metoo real estate agents….

In recent weeks we have all read the stories about Harvey Weinstein, since then we have heard from people in the movie, music and entertainment industries who have told stories of their own personal experiences.

It made me think about #metoo and how it resonated with me, not because I have been harassed as an employee etc but as a real estate agent I have experienced harassment and inappropriate advances from people who I have interacted with during my career. These experiences have made me a very cautious woman.

I have to admit that I have had a few scary experiences myself however as an agent in London, I was made very aware of the “Mr Kipper” story. Wikipedia reports that  Suzy Lamplugh was an estate agent reported missing on 28th July 1986 after going to an appointment with someone calling himself “Mr Kipper”, to show him a house in Fulham. Her office diary recorded the essential details of the appointment: “12.45 Mr. Kipper – 37 Shorrolds Road O/S”, with the “O/S” annotation meaning outside the property. Witnesses reported seeing Lamplugh arguing with a man in Shorrolds Road and then getting into a car.

Her white Ford Fiest (registration: B396 GAN) was found that night outside a property for sale in Stevenage Road, Fulham, about a mile and a half away. The ignition key was missing and Lamplugh’s purse was found in a door storage pocket.

Police suggested that a black, left hand drive BMW vehicle might have been involved, because of an eyewitness account of a car at the same location as Lamplugh’s in Stevenage Road. It was thought for some time after her disappearance that “Kipper” was her pronunciation of the Dutch name “Kuiper” but despite police investigations, nobody of this name was found to be connected to Lamplugh.

As a young agent in London I found this story to be truly shocking and a warning to all real estate agents in the industry. This story in particular made me very wary of who Iw as dealing with.

During my career, at one time or another, I have armed staff with personal alarms, come up with coded phone messages, developed safety strategies & precautions in order to protect my staff whilst they have been out meeting strangers in empty properties.

To be honest when you think about it, it goes against everything that you have been taught doesn’t it? Meet a stranger you say? No thanks…. Meet a stranger in an empty property you say? No way! You just would not do it and I am sure you would not encourage your children to do it, however we as agents do it every single day. When I write this down, it seems ridiculous!

There have been similar cases to Suzy Lamplugh’s i.e. in June 2006, there was a similar case involving a 48-year-old female estate agent in Wiltshire, UK who met a client called Mr. Herring. She was attacked with a sharp object, causing cuts to her arm, and was pushed to the ground, but managed to free herself. The assailant ran away. Police have said there is no connection between this case and the disappearance of Lamplugh.

In January 1992, Michael Sams kidnapped Stephanie Slater. She was an estate agent working in Birmingham, UK. Slater’s employers paid a ransom and she was released. He was later found guilty of her kidnap, and of murdering 18-year-old Leeds prostitute Julie Dart. Sentenced to life imprisonment, was still imprisoned as of 2015.

There have been numerous times where I have felt intimidated in a property. Let’s get this out in the open now, I talk a big talk,  I am feisty and I do not back down. However, I am also less than 158cm (5ft 2in in the old money) so I have managed to be lucky enough to manoeuvre myself out of worrying situations.

In order to avoid confrontation and bad situations, I always do the following:

  1. Make sure my appointment is in my calendar
  2. Make sure that the appointment has a link to an email invitation (I email the other party to confirm the appointment, location etc)
  3. Make sure I enter the name and the mobile phone number of the person I am meeting.

If I am visiting a property to do a periodic inspection I will always do the following:

  1. Knock on the door loudly
  2. Announce that “Hello Tracie from Harrintgons’ is here”, several times over and over
  3. Inspect the property quickly to check if anyone else is in the home (always leaving the front door open in case I need a quick exit)
  4. Once I am sure that no-one else is in the home, I lock the front door behind me, I do my inspection and then I leave.

If I am visiting a property to do a private inspection, I will always do the following:

  1. Open up the rear door and other doors in the property in preparation,
  2. Stand out at the front of the property and meet the person there,
  3. I will assess them and see how I feel about them and what my gut says, and
  4. If I feel safe enough then I will take them through the house,
  5. I will always try to put myself between the nearest exit and the person I am meeting.

If I am hosting an open home and I expect a few people to come through, I will always  have another staff member at the front of the property obtaining ID details of people wanting to enter the property – however many people feel that it is unjust to provide ID before you enter a property.

If there is one thing that I want prospective tenants and buyers to know is that we do this for the safety of our staff and the property more than for marketing.

Eventually I am sure that the process of viewing a property will become safer for real estate agents but until that day we will have to continue to adopt our strategies to the particular environment and situation that we are in.

-Tracie

 

Real Estate · Uncategorized

Where do I start?

So you have finally made the decision to purchase an investment property. Congratulations! This will be an exciting (and sometimes stressful time for you), however it is important that you prepare yourself in order to get yourself in the best position possible before submitting your mortgage application.

mortgage approved

You do not want an application to be turned down because you have not prepared yourself. An unapproved loan application can be detrimental to your credit rating as it leaves a footprint on your credit history – the more applications (be they successful or not) can negatively affect your credit rating.

Unfortunately lenders use many different criteria in order to assess if you can borrow from them i.e. your salary, weekly running costs, outstanding debt level, number of dependants and credit history. I wish that there was a tick and flick list that could be used by all lenders but I suppose it is their differences that keep them competitive.

I think that it is important to understand how how a lender will assess your eligibility to borrow funds.  There are certain factors that can make it easier or virtually unworkable for you to obtain finance.

Daniel Dos Santos from AMD Finance advises “that there are several things that you should do in order to prepare yourself”:

Credit reference

Your lender is going to do a credit check on you. They’ll be looking at any credit applications made by you and will be checking if you’ve defaulted on payments or have an infringement referenced either in your name or your company’s name (if you are self employed).

Make sure that you have a ‘clean slate’ by checking your credit report. There is no use applying for a loan only for it to be turned down because you forgot to pay an old store card etc.

You can order your personal credit file online by googling “credit history report”

  • Enter your personal information,
  • pay by fo the report and your credit file will be forwarded to you usually in an email as a PDF file.

If something appears on your report that you are unaware of fix it ASAP.

You should bring this report to your appointment with your broker/lender.

Know your limits

The amount you can borrow for your investment property will depend on many factors such as your deposit or other equity you hold, what you are buying, the expected rental income, whether you will be negatively or positively gearing the property, property management costs and if you have allowed for a period of vacancy.

This is where your broker can help you to work out how much you can borrow and what type of loan will suit your budget and lifestyle.

Organise your Deposit

Most lenders require a minimum 10% deposit (and evidence of you saving this), however if you are borrowing 80% or more of the purchase price you will normally be required to pay mortgage insurance (which means an additional fee).

The way you structure your investment loan will depend on your personal circumstances and should be discussed with your accountant or financial adviser prior to meeting with your lender/broker.

Deposit bonds

A deposit bond is a guarantee to the vendor, by an insurance company, that they will receive their 10% deposit, even if the purchaser defaults on the contract of sale. You, the
purchaser, are able to provide this guarantee to the vendor by paying a small premium to the insurance company. All purchase funds are paid at settlement. In the ordinary course of events, settlement takes place, the purchase price is paid in full and the
deposit bond simply lapses.

We are buying it together…

couple buying investment

The most common way to buy a property with two or more people who aren’t a married or defacto couple is through a tenants-in-common arrangement. This allows the property ownership to be split any way, not necessarily into equal shares. Three people can buy a third each, or it can be divided in other proportions. This means your share of the property can be left to the person of your choice when you die.

In contrast, a property owned under a joint tenant arrangement (usually by couples) is
where the property is held in equal shares. If one owner dies, their interest passes to the
other owner. Shared property ownership only works if strict ground rules and a tight contract are in place. Everything needs to be in writing. Your legal representative should be consulted.

The two most important points you need to cover are what happens if one owner wants to sell their share and what happens next.

Stamp duty

The amount of stamp duty payable varies from state to state and whether you are a first home buyer or an investor. Your conveyancer/legal representative will advise you of the amount payable or you can check your state’s website.

State/Territory Website
ACT http://www.revenue.act.gov.au
NSW http://www.osr.nsw.gov.au
NT http://www.revenue.nt.gov.au
QLD http://www.osr.qld.gov.au
SA http://www.revenuesa.sa.gov.au
TAS http://www.treasury.tas.gov.au
VIC http://www.sro.vic.gov.au
WA http://www.dtf.wa.gov.au

Make sure you are aware of stamp duty costs, you may have to factor this into your loan amount.

Loan application fee

There is a standard upfront loan establishment fee. The fee covers the preparation of loan application documentation, legal fees for standard mortgage preparation and one
standard valuation.

Applying for a loan

If you’re approaching a lender for the first time you’ll need to be ‘identified’.

When you apply for a loan you have to show identification up to the value of 100 points. A driver’s licence earns 40 points, a credit card can earn 25 points and a birth certificate 70 points. Only original documents qualify.

It’s not unusual for a loan application form to take up to 10 pages. Your lender will want
to ascertain your existing assets, capacity to repay, financial risk, collateral (is the property you are buying adequate security for the amount borrowed?). You will also be asked if you have dependent children, how long you have lived at your current address, what you owe, your personal insurances and your credit card details.

It is advisable to have your two most recent pay slips, group certificates for the past two years and documentation from your employer detailing income and length of employment.

Self employed applicants should provide their past two years’ ATO assessment notices
or their past two years’ financial statements and accountant’s details. Some institutions
may even ask for a profit and loss statement certified by a registered accountant.

Also needed are savings details, bank statements including transaction, saving
or passbook accounts, investment papers including managed funds or term deposits,
what you owe and own, details of personal loans, credit cards or charge cards and
tax liability if self-employed.

Details of life insurance policies and superannuation as well as approximate value of other assets such as furniture and jewellery should also be included.

Remember to include your expected rental return in your loan application. This will affect your borrowing capacity and loan serviceability and may allow you to purchase a more expensive property. Your real estate agent will be able to provide this information.

I know that there is a lot to consider and to obtain from various third parties however it is much better to be prepared so that your broker/lender can get a picture of your credit history and ability to borrow funds now than after you have made an incomplete application.

Loan approval

approved

It is best to have your loan pre-approved before you make any offers. Knowing that your finance is pre-approved will allow you to concentrate on a price range and give your full attention to the purchase. Remember that a vendor may also accept a lower than advertised price knowing that your finance is organised. They may want a quick and hassle free sale.

Once your loan is formally approved, the lender will arrange mortgage documents to be signed. Be sure to read the mortgage contract carefully and understand the contents.

Property management

Professional property management frees you from dealing with tenant issues and gives you more time to concentrate on your portfolio. Your property manager is also up-to-date with changes to the Residential Tenancies Act and is better suited to negotiate with your tenant on your behalf should the need arise. They are also in a position to obtain credit checks on potential tenants and have access to tradespeople. If you prefer to stay one step removed and not deal personally with your tenants, then a professional property manager is definitely recommended.

So once you have your loan pre-approved, the next step is finding your new property. My biggest tip here is to find a real estate agent that you get along with. They usually know of properties that are coming onto the market before they hit the internet etc. I have sold many properties without having to advertise them. In a lot of cases tenants will buy the property they are renting – all you have to do is ask the question.

Once you have found your ideal property, you will need some assistance from other professionals.

Legal eagles

You will need to appoint a legal representative to ensure that the contract is in your best interest and does not contain any unsatisfactory terms. Make sure you know your legal representative’s qualifications and exactly what service they are offering as well as their costs. I have found that their fees vary considerably from office to office.

Your legal advisor is there to:

• Give advice on the property contract
• Facilitate council, strata and company title searches
• Order pest and building inspections
• Arrange for the exchange of contracts
• Negotiate with the vendor’s solicitor on your behalf
• Arrange for the settlement process, and
• Deal with any difficulties that arise during the settlement period.

It is a good idea to ‘shop around’ for someone experienced.

Building & pest inspectors

Building and pest inspections are a must! Your conveyancer will enlist the services of an authorised pest and building inspector. Your purchase contract can be subject to a satisfactory inspection or your inspection can be scheduled during your cooling off period.

The inspector will provide a written report pointing out any faults in the property, whether they can be repaired and how much these repairs are likely to cost.

If buying at auction you will need to ensure that all inspections are completed prior
to the day of the auction. In the case of a strata title property, your contract for sale will provide the name of the strata manager so that you can arrange for an inspection of the books and records of the owners’ corporation.

Your legal representative should also advise you of any future developments
which could affect your home by checking the local council records.

Insurance broker

broekn leg

There are some insurance policies that you should look into:

MORTGAGE PROTECTION AND LENDER’S MORTGAGE
Mortgage protection and lender’s mortgage insurance (LMI) are for two different situations.

Mortgage protection is insurance that supports you in case you become involuntarily unemployed or are unable to work due to illness or disability. It makes sense to ensure that you can continue to meet your commitment in the case of unforeseen events.

However lender’s mortgage insurance is usually required where your deposit is less
than 20% of the purchase price of your property and protects the lender in the event
that you default on your repayments.

LIFE
Life insurance provides a lump sum payment to your beneficiaries in the event of your death. If you are the main income earner in the family, this insurance will help your family manage their future (for example paying out mortgages, schooling and other family expenses) without your ongoing earning capacity.

LANDLORD
Landlord insurance is a policy to cover an investment property owner from financial
losses. Common features of a landlord insurance policy include malicious or intentional damage to the property by the tenant or their guests, theft by the tenant or their guests, loss of rent if the tenant defaults on their payments, liability including a claim against you by the tenant, and legal expenses incurred in taking action against a tenant.

TPD – TOTAL AND PERMANENT DISABILITY
You can choose to cover yourself for either total or permanent disability or death options, providing you can no longer work or in the event that you die due to illness or accident. When combined with life insurance, this can provide security for you and
your family.

BUILDING
Building insurance should provide you with adequate cover in the event you need to repair or replace your investment property (ie home, garage, shed). Flooding and fire can leave you with a property that is not fit to live in, you need to cover yourself.

INCOME PROTECTION
Income protection insurance pays you a predetermined percentage of your monthly
income should you be unable to work due to illness or injury.

Land tax

Land tax is an annual tax levied on owners of land. In general, your principal place of
residence (your home) or land used for primary production (a farm) is exempt from land tax.

Investment property, on the other hand, may be subject to land tax and the rate of tax varies from state to state. Your broker/lender can help with the rates applicable in your circumstances.

Your broker/lender can provide you with information on stamp duty in the state of your purchase, comparisons of various loan application fees and have access to insurance recommendations.

Good luck! Let me know if you have found this to be useful and informative.

-Tracie

Disclaimer: The advice contained in this document has been prepared without consideration of your objectives, financial situation, personal circumstances or individual needs. Whilst care has been taken to ensure the accuracy of the information contained herein, it neither represents nor is intended to be legal or taxation advice. Please consider the appropriateness of this information before acting on any advice from this booklet. Harringtons Realty & AMD Finance aims to understand your circumstances and requirements to provide you with a loan and other products that are best suited to your needs.
Real Estate

OMG is that us?

Driving to work one Summers’ day a few years ago, I was listening to the radio when I heard that there was a police incident in a street where I managed a property.

I listened intently as we had not been able to get hold of the tenants for a few days….. my spider senses were tingling….their rent was behind and we had been trying to get hold of them without any success.

When the radio announced that police were onsite investigate a “double death” my stomach lurched. I knew it that they were talking about our tenants and our property. Luckily I had a contact in the police and they were contacted, they confirmed that yes it was our property. Damn! OMG it was us!

The tenants were twenty somethings and we had never had any problems with them throughout the tenancy. Hence why it was so unusual that their rent was not in the account as usual. My heart immediately went to to the parents of the young boys, who were now experiencing the loss of their children. Those poor parents. I personally really hate it when a tenant dies, I have had to deal with 6 in my career so fortunately there was no emotional panic and I could be the professional property manager that the parents needed.

My job was to now support all parties involved (including my staff). I actually had an ex-staff member who once told me how he had found a tenant hanging in a property – my ex-colleague was approximately 23 years old and he was doing a periodic inspection. He called the office to tell them what had happened and unfortunately he was left there to deal with the situation all on his own. His boss did not arrive to assist! I was disgusted  by this. I would never do that. This is not something that a young professional should be dealing with, it will have lasting effects. If a tenant passes away at a property, the owner of the business should be out dealing with it, not the younger ones. (Rant over!)

Thoughts kept running through my head; how do I tell my client that this has happened? She will be devastated. Has anyone told the parents yet? Hopefully the police had already informed them. How did they pass away? What had happened? What did I need to clean up? I  know that the last question sounds very basic but at the end of the day someone has to take care of this and usually it is the property manager.

So I dashed over to the property, luckily the police were still there and they advised that the bodies had been removed (you could audibly hear my sigh of relief). I was told that it did not look suspicious and that they suspected that it was a drug overdose.

When I went to have a look I could see that the tenants had moved a mattress from the bedroom to the lounge room where they passed away. Unfortunately they had been undiscovered for a few days and it was now my job to arrange the forensic clean up.

So let me tell you what the practicalities of this entail:

Getting the preferred contact details of a forensic clean up team from the police, booking them in and getting them to sort out the problems left behind. I did this and was then informed that they had to remove some of the carpet because bodily fluids had saturated through the mattress and the carpet was unable to be salvaged.

So I had to arrange for a carpet supplier to quote to replace and/or patch the carpet. In the end we voted to replace the carpet entirely, (let’s face it you probably would not have wanted to just patch that carpet anyway).

In the meantime I had made contact with the tenants’ emergency contacts and I arranged to meet them onsite to allow them access to look over the property and the possessions of their loved ones. Be under no illusions, this is a very emotional time for these people (as well as whomever is hosting this inspection). It is not something for the fainthearted.

Once the initial inspection was carried out, we then had to field questions, when do they have to get all of their possessions from the property, what happens with the bond, were they paid up to date etc. It is my experience that the relatives of the deceased want to ensure that they do not inconvenience the landlords (and they are usually very apologetic for their loved ones passing away, and causing a problem). It is weird but in my opinion, it tends to follow the same pattern.

As you can imagine our client was very upset about the situation, her heart went out to the families that were affected. Her main aim was to ensure that she could do everything possible for the families.

We made arrangements for the tenants possessions to be removed and their family paid the rent that was outstanding. The bond was returned and they were then able to mourn their loved ones.

We had to now balance the sensitivities of the bereaved and getting the property back on the rental market to save our client from any further financial loss. This was a delicate process. The property itself was now what they call a “stigmatised property”, we had to let everyone who inspected it that 2 people had passed away in it. Which in turn meant that the pool of tenants was dramatically reduced. Not many tenants will secure a property where someone has recently passed away – let alone two people.

I remember going to carry out an inspection one evening and finding a “goodbye” letter at the back stairs (which I can only assume was from one of the tenant’s girlfriends). I have to admit that my heart was a broken after finding that.

So….. it took a while and we reduced the rent, a few weeks later we found a lady who felt that she could make it work and we arranged to move her in.

The silver lining of all of this is that my client was smart and she had insurance which covered the death of a tenant. Her policy covered her for 6 weeks’ worth of rent in this instance as well as the cost of the forensic clean up. If she did not have this insurance policy she would have been much more on edge and stressed about the situation. I expect that she would not have been able to afford to allow the bereaved time to make the appropriate arrangements. The insurance policy made things a lot easier for her, the parents and us to deal with.

What is the moral of the story? Please ensure that you have adequate landlord insurance.

-Tracie

 

 

 

 

Real Estate

What does a good tenant look like?

So you have purchased your investment property, it is being advertised and you have received applications…. now how do you choose which tenant you want to secure?

Here are my insiders tips to being able to find the best tenant:

Meet them – if you live nearby or if you are renting out the property yourself make sure you meet the prospective tenants, this is imperative. Use your intuition, what is it saying to you?  If you cannot meet them then ask the person who has done this on your behalf some probing questions, were they neatly attired, were they polite, did they show up on time, were they early? Did they have any pets with them? Are they desperate to find accommodation if so why? How many people want to live there? How long for? These are all indicators as to what type of tenant they are.

Ensure that they complete an application form –  I remember in the UK when I rented a property, the landlord literally met me and my flatmate and then decided there and then without any paperwork that he would allow us to rent out his property for 12 months. It was great for us but if something had gone wrong he would have been in all types of trouble with his insurer or the Freeholder of the property.

Application form presentation – Have a good look at the application form, is it a mess with scribble all over it? Is it neat and tidy? Was it sent electronically? Was it slipped under your door in an envelope? Was the application presented in a bound folder (don’t laugh I have had this in the past)? I have had others that looked like and smelled like they were filled out in a pub with stains on them etc. You can tell a lot about a person by the way they present their application forms.

Identification – check their ID carefully – I had a colleague who agreed a tenancy but the ID was fake. She did not realise this until the Police contacted her as they wanted to raid the property for drugs and stolen goods. My old boss raced down to the property to prevent the Police from kicking in the door and doing any damage to the property.  Constantly ask references to confirm the details on the applicants ID. Get those vital details checked i.e. their date of birth, their address, their mobile phone number etc. The more people who confirm those details the better.

How did they speak to you? I have had tenants who have been so rude to me prior to gaining a tenancy that I would never recommend them for a tenancy. I have to have a relationship with the applicants for a minimum of 12 months. Why would I do this to myself or to my client? I have to admit that I am always astonished at how people think that they can talk to a property manager prior to a tenancy. I will never agree a tenancy to a rude applicant.

Check out their references – this is a very important step. Make sure that you never call mobile numbers, always search for the landline equivalent when it comes to finding out more about the applicants and their jobs. You need to know the name of the company that they work for. Then you look up the registered landline number and you call and speak with the Receptionist – ask for that person by job title not by name. Ensure that you speak with their direct employer/manager. Ask the receptionist who their Manager would be. I could not tell you the amount of times a prospective tenant has put their work colleague down as their “Manager”. Go via the receptionist each time, they will always point you in the right direct.

Use the internet – Check them out on as much as you can on the internet, ensure that you check an industry recognised database to see that they are not black listed by other agents. Do a public records check, I remember doing my due diligence and discovering that a prospective tenant had found out his girlfriend was cheating on him. He learned who the man was and when he found him, he ran over him in his car. My client and myself did not want someone with a history like that as a tenant. I could not imagine the risk that a staff member would have just going into a property with him knowing that there had been past aggression.

Call their personal references – you will be surprised at what information you can glean from them. Most of the time it is 100% accurate and they favour the applicant however I have had a personal reference tell me to not rent the property to this prospective tenant because he was recently involved in a meth lab set up. Thank you for being so honest Mr Personal Reference! A meth lab is a very expensive mess to clean up. In order to clean a meth lab back to a non toxic state, all carpet, curtains, beds, toys, linen, couches and other highly absorbent material must be removed from the affected property and either clean (for high value items) or disposed of. All food preparation surfaces such as kitchen benches will need to be removed and disposes of in most cases.
 It is a nightmare. Prevention is better than cure.

Ask the applicant to do something for you – supply you with some more information, get someone to call you back – that kind of thing. Test how good they are at follow through. I use this technique when I am hiring staff too! Some people will do as you have requested, others won’t and I am constantly surprised by the amount of people that spend their time doing all of the initial ground work and then fail to do the required follow up.  If you have maintenance that needs to be carried out and you need a tenant’s assistance to get it done, you want to work with someone who can and will assist you instead of someone who will not be as responsible.

Phone calls – track how many times they have contacted you during the initial phase. There are those tenants who will call you 10 times a day. It has been my experience that this behaviour will not stop during the tenancy. You want tenants who are relaxed and who will not take up your day with small issues. Alternatively they call so much because they are anxious to secure a property. If they urgently need to move home, this should raise questions too. Why have they had to move so quickly? What has happened, have they had other applications declined? Have they been evicted?

All of the above are red flags and they will help you to assess if you want to proceed with an applicant or not. If you only find one issue that has been brought to your attention or that does not add up then you should ask the applicant to explain to you in further detail.

Sometimes there is a very good reason for an issue, other times it will just not add up. It is when I see a few of the flags that I recommend that an application is declined. If a landlord and I are torn between accepting an applicant or not, we will usually go with my gut.

With over 25 years experience as a Property Manager I have fine tuned my instincts and intuition when it comes to choosing tenants for my clients. So do as the professionals do and listen to your intuition too!

– Tracie

Real Estate

The things I tell my friends when they are looking for a good property manager…

So, you are looking for a good property manager…what do you look for? Let me tell you, it is not all of the usual standard stuff about fees etc that you should be comparing. You should be looking into the services and the way the business is set up.

Does the owner of the business work in the Property Management team or the Sales Team? I say this because most agencies are owned by sales people who start a property management company on the side as they do not want to refer business to someone else. You want a company where the owner of the business works in the property management department daily (80% of the day at least).

What structure does your PM department run? Why is this important? Well, there are several reasons and there are several structures. The 2 main structures are:

  • Task based – means that you have a separate person/department to deal with everything, just like a major phone company – you will have to speak with this person to find out about maintenance and that person to find out about payments and a completely different other person if you have a problem. This is great if the PM department is large (because you have experts in their fields working for you) but it will drive you nuts if you have to speak with 3 people if you have 1 problem.
  • Portfolio based – this means that 1 person looks after everything from finding a tenant, managing rent arrears, maintenance, periodic inspections, bills, vacating tenants etc. This is great if you PM is not overworked and does not have many clients to look after. I always say that for every property I look after I am usually managing 4 clients (2 landlords and 2 tenants), that is a lot of people to manage if I have too many properties.

How many properties does each PM look after? Again this is a very important question to ask because let’s look at it specifically. Industry standard for a portfolio Pm is 120 properties. A PM is scheduled works 38 hours a week (normally however we all know that they work a lot more than that). 38/120 = 32 minutes per week that the PM can fairly allocate to each property. If a Pm runs more than 120 properties as I know others do i.e. 140 properties that leaves you with = 27 minutes per week. I have actually know an owner of a PM business to allocate only 20 minutes per property per week.

How much real life experience do the PMs have? I know a lot of agencies who hire young staff i.e. 20 – 23 because they are cheap however most of the time they have not left the family home yet, don’t know how to obtain a mortgage, do not understand what “loan to value ratio” means, have never seen a depreciation schedule, have never had anything to do with a body corporate and who are yet to understand the worry that being a landlord brings with it.

How organised is your PM? I have known many PMs who could not organise a “chook” raffle let alone your trust account ledger. They can talk the talk but they have no idea what they are doing. Ask to speak with 3-5 client whose properties are currently being advertised for rent. They are current clients who are currently going through one of the most stressful times in a tenancy. They will tell you the truth!

Does the PM understand ledgers and trust accounting legislation? This is a large part of the job, it is vital that the PMs understand how to account correctly and what to do to repair an accounting error.

Who attends and prepares the QCAT (small claims tribunal) hearings? Is it someone with experience or just whoever is there at the time? Does the property manager personally attend? If it is a Task based PM department then this will be particularly important as one person will not have consistent dealings with the tenants and/or history of the case.

Does the PM department receive commissions from companies for referring business? You want to know if there is a payment of some kind and you are legally supposed to be advised of this. Some of the businesses that pay PMs are:

  • Landlord Insurance
  • Building Insurance
  • Sales department
  • Developers
  • Utility connection companies (gas, electricity, TV etc)
  • Mortgage companies
  • Financial advisers
  • Depreciation companies
  • Professionals (solicitors, accountants etc)
  • Photographers

Additional tips!

Make sure you find out everything you can about the owner of the business, google, Facebook, Insta – do your research.

Ask for a list of their their preferred tradespeople. Call these companies and ask questions such as:

  • ask what percentage of their work is done with the agent?
  • how do they let them know about jobs?
  • does the contractor do free quotes?
  • what percentage of the quotes they provided to the agency are approved?
  • do they make the contractors fill out a contractor insurance form?
  • have they ever lost keys?
  • is most of their work done immediately?
  • does the agent pay their bills on time? If so how frequently?
  • do they have issues with communication? Who is the best property manager to work with in the office?
  • how do they access properties to carry out work? (do they collect keys or do they arrange access with the tenants?)

All of these questions will give you a picture of how actual business runs.

I hope that these insights allow you to choose the best property manager for you and your family. These are huge investments that you have worked extremely hard to purchase and they must be administered professionally!

If you have ever had a bad property manager you will know the value of a good one!

-Tracie