Why Specialist Property Management Matters?

Make this mistake with property investments and you’re finished…

Property Management and Protecting Your Property Investments…

Don’t even think about taking on another tenant until you read this report because property management means more than just collecting rent. That’s why investing in residential property must be treated as a business venture…

Your property investment deserves the best property management possible, right?

Would you take the risk of cut price management, as you really do get, or should we say don’t get what you pay for.

The management fees are fully tax deductable. Most residential property investors use property  as a means to build assets for their future financial return on investment.

property management
Don’t Even Think About Trying To Take On Another Tenant Before You Read This!

Screening prospective residents affects every other aspect of managing rental property.

On average, well qualified residents have less lease violations, are more likely to pay rent on time and return rental properties.

This should be a strategic business decision made to support their personal goals, and as such the property needs to be treated as you would any business investment.

Why use a specialist property management company:

  • Complete knowledge of the real estate industry with experienced professional staff
  • Excellent understanding of the rental market and current market conditions
  • Expert knowledge of how to present your property to maximise rental returns
  • Quality internet advertising with numerous photographs with detailed area and property description
  • Current market analysis carried out on new lettings so owners get the maximum rental return
  • Progress updates provided on new prospective tenants for your property
  • Process tenant applications utilising a 100 point ID check, full reference checks and database
  • checks including Barclay M.I.S and T.I.C.A to ensure most suitable tenant is found for your property
  • Preference for rent payment using a direct debit system from the tenant’s bank account
  • Rent paid monthly or twice monthly to your account by direct deposit, fully itemised monthly statement

Engaging a specialist property management company can be a very smart business decision because you’re hiring an expert service to manage your assets.

property management
Engaging a property management specialist…

Just like employing an accountant to help with your tax return…

A specialist property manager takes responsibility for managing an investment property and optimising return for the investor:

  • A fully itemised end of financial year summary of each property to make your tax return a breeze
  • Rent collection and control of rent arrears with full information to owners on the course of action
  • taken to bring rent back in advance as required or eviction as soon as possible after all legislative requirements are fulfilled
  • Full entry and exit reports conducted on all properties to ensure the integrity of your property is maintained
  • Ensuring all tenants remain on a fixed term lease where possible to protect the owners best interests
  • Regular routine property inspections with a full written report and photographs where appropriate
  • All routine maintenance is identified, reported & acted on by qualified and insured trades people in a timely manner to protect your asset
  • Ensure your rent reviews are inline with current market rates improving your cash flow and borrowing capacity….

A specialist property manager can minimise your hassles, because there are many time consuming (often expensive) problems associated with managing an investment property.

These range from sourcing:

  • Right tenants
  • Maintaining property
  • Paying expenses
  • Collecting rent
  • Organising inspections
  • Accurately recording transactions for tax office

There can be complicated problems of dispute resolution with a tenant through an administrative tribunal.

A professional property manager covers all of these issues and protects your interests for a relatively small tax-deductible fee.

The question to ask yourself is; do I really want to be dealing with every little aspect of the day to day management of my property?

Choose a dedicated residential property management specialist can often be an “add-on” service provided by real estate agencies whose principal focus is selling property.

Let’s face it, some agencies only offer this service as a method of more listings for sale.

A specialist property management company does not have a sales department, however specialises in doing one task exceptionally well – property management.

Expert knowledge of the geographic market which is a key role of a specialist property manager knows the pricing and tenant issues for all of the suburbs they are servicing – this is their bread and butter.

They make sure landlords are able to maximise their rental return with highest possible occupancy rate for their property.

A specialist property manager does not have to be located in the same suburb as the property…

Yet their constant  involvement and team of property managers ensures they remain up to date with changes in the market.

property management
Property management…

Image Source:Jacob Grant Property Management

One contact for all your properties because dealing with different individual real estate offices is often difficult – each with their own systems and processes.

Even franchise operations can be difficult as you are still dealing with completely independent operations.

Finding the one agent which covers your needs across the majority of your portfolio is a real bonus.

A specialist property manager also provides consolidated reporting and a key benefit for tax deducations.

National representation means a property management specialist manages all of your properties in each city.

Having offices in key major investment areas nationally allows you to have the same high level of service provided to you for all of your investments across Australia.

Matching right tenants with right property is crucial. You want to know any prospective tenants for your  property are being checked thoroughly.

A property management specialist carefully checks any applicants current and previous rental references, current employment details, and personal references if necessary.

Many property management specialists subscribe to major tenancy databases, where they check if applicant  has been listed by other agencies as causing problems in the past.

A property management specialist takes all of these checks into consideration, and then presents you with the details and their recommendation.

You have final discretion on whether or not to accept the tenants…

Professional presentation of the property along with advertisements on a number of different websites is the best way to find the right tenant.

A professional property manager knows the key features of a property which are in demand and how to present the property in the best light.

Internet advertising and people’s lives becoming increasingly busy, your property manager is available to show properties  to prospective tenants 6 days of the week.

Tenant Protection Insurance is often also called “Landlord Protection Insurance”, this protects the landlord against tenants defaulting on their rent as well as tenants causing malicious damage to the property.

While most owners have this insurance in place, many would not know what they are covered for, what excesses may apply, and the costs they might have to cover until they have to make a claim.

(It is recommended to thoroughly read product disclosure statement and speak with several insurers, including at least  one who specialises in this type of insurance rather than automatically using the same insurer used for your home or car.)

Maximising the best rent means a landlord wants to get as much as possible for their property.

While a property management  specialist wants you to get as high a possible return, they’re able to advise you of what’s a realistic rent at the time your property is available.

It is not a matter of just putting the advertised rent as high as possible and then have no
explanations for the landlord when they can’t find a tenant.

During a tenancy, a professional property manager have systems in place for reviewing and discussing regular rent increases for your property.

The property manager should also communicate effectively about this to tenants so the property has minimal vacancy periods.

Laws and legislation differ from state to state, so you want a national property manager with expert knowledge of each state’s legislation.

Property Management

Thanks to Jacobgrant.com for image source:Jacob Grant Property Management

Buying an Investment Property?

Invest In a Unit or House?

 

Why are you exploring the possibilities of buying investment property? In Australia, the reality is the more you invest, the less tax you pay. Ultimately…the less tax you pay, it means you’ve got more money in your pocket to help drive your debt down.

Are you with me? Do you understand what is going on? 95% of what I am going to show you, you already know. The key distinctions about what makes buying investment properties is how you can put the property investments to work in your own life.

So if we apply this to your life, why would you limit yourself to one investment property? When you buy property/real estate today you are buying at a discount in relation to the future as this increase is called capital growth.

These are core structures for financing all of your property investments and wealth creation. In principle, it really doesn’t matter if you buy a house, renovated and sold it, if your investment money comes from business or wherever…

Buying investment property means you get your money working harder for you. The more you positively leverage you investments, the less tax you pay. Less tax…more you can drive your debt down, and more you can drive your debt down the more you can invest!

Why use equity to buy investment property? If you are already a home owner you may not need to provide a deposit to fund the purchase of an investment property because equity is the difference between value of your home vs how much you owe or borrowed from the bank against it

Want to understand what equity is and find out how to access equity in your own home and use it to purchase an investment property? Simpy push the play button and watch this video.

There are several ways to make the most of your existing equity buying an investment property without actually tapping into your savings. Unlocking the equity in your home can be an effective way to assist in purchasing a rental property to help build your wealth.

Buying an investment property…why invest in units is a common question asked by property investors regarding tax depreciation, so why does a unit get more depreciation deductions than a house?

buying an investment property
Are you watching others around you build their property portfolios and wondering how to buy your own investment property?

When investing in units you need to determine depreciation deductions available in a property, factors which affect
calculations include:

(a) Purchase price of the property
(b) Date which construction commenced
(c) Settlement date
(d) Land value
(e) Value of fittings and fixtures within property (where relevant)…

The overall cost to build residential units increases due to the amount of infrastructure involved in walls, services, etc by comparison to the less compact layout of a house or residential property which can make a significant difference to overall tax claim.

Units as investments often contain more fixtures and fittings than a house which means owners of a unit not only can claim items within strata unit (i.e. lights, carpet and dishwashers, etc).

Unit investors are also entitled to claim their share of the common property. Common property has been identified by the Australian Taxation Office (ATO) as areas within a complex or development which are shared between owners.

This includes areas and items such as:

  • Driveways
  • Pool and pool pumps
  • Outdoor furniture
  • Lifts/fire stairways

The following example compares a unit and a house (using same purchase price, construction date and settlement date), there is a difference of $15,000 in depreciation deductions over first five years of ownership.

Australian Taxation Office tax benefits: The ATO’s legislation recognises quantity surveyors as qualified to estimate construction costs for depreciation purposes.

As a building gets older its items wear out and depreciate in value. The ATO allows property owners to claim this depreciation as a tax deduction. Depreciation can be claimed by any property owner which receives income from their property.

Most investors are aware they can claim deductions on building structures of a unit (subject to age) including plant
and equipment items within such as:

  • Blinds
  • Carpets
  • Ovens
  • Range hoods
  • etc…

Many investors are unaware they can claim on common areas as well. Is it worthwhile for investors to consult a professional quantity surveyor to calculate the most accurate and financially returns for the property investor?

Accountants and real estate agents may on occasion estimate depreciation figures, although these professions lack construction cost knowledge and the capability to accurately determine depreciation deductions available in an investment property.

Most importantly the ATO does not recognise their figures in a tax return.

That’s why consulting a quantity surveyor which specialises in depreciation guarantees you…the investor to get the maximum legitimate deductions available.

A site inspection allows the quantity surveyor to establish maximum number of plant and equipment items within the property which includes measurements, photos and notes are taken to enhance the depreciation report.

If an investor is audited by the ATO, their depreciation claim will be supported by evidence documented at the time of inspection.

A quantity surveyor can determine correct proportion a unit owner is entitled to claim for common property based on criteria such as size, position within development (eg. penthouse or ground floor) and even its view based on relevant building plans.

If you decide to engage a quantity surveyor to complete a tax depreciation report on an investment property, any fee associated with the production of that report is 100% tax deductible.

Buying investment property means you would be in a position to pull equity out of your property(s) now and invest again. Why? Because you can…you also understand the process of paying less tax, plus how the chain reaction happens by continuing to invest.

Buying an Investment Property

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Australian property investors guide to property investments now, where to buy investment property, positive cash flow property using proven strategies to create wealth and financial freedom