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Aug 3, 2022
Are you new around here? Tips for first-time landlords
Firstly, if you’ve just become a new landlord – congratulations on climbing the property ladder! It can be an enjoyable and profitable experience, especially with the right support around you. With rental availability at an all-time low in Perth, it has never been a better time to be in property investment. While it’s exciting, it can also be overwhelming with the amount of administration property management in Perth involves! So, here are some of Diana’s best tips to ease you into landlord life and enjoy the great financial reward that comes with it. Economics over emotions I think the first thing to acknowledge is how different the approach is with your investment property versus your home. When you buy your home, often you fall in love with it and make decisions around renovating or decorating purely based on what you like. An investment property involves leaving your emotions and likes/dislikes at the front door mat – do not let them inside! Every decision you make with a property investment needs to be made rationally and with your financial goals in mind. If you’re struggling to make these calls, there are wonderful property management services in Perth you can engage. Carefully select your tenant It might seem like tenants will knock down your door with the current rental crisis (and they probably will), but selecting the right tenant is so important. A great tenant comes from thorough screening which includes employment checks, previous rental references and national tenancy database checks. Yes, it is a lot of work and why engaging a property manager with time and experience to screen tenants is a smart move. Maintain high standards in your property Ok, we know we said to approach things differently with your investment, but when it comes to maintenance, hold yourself to the same standards you would in your own home. Maintenance fees are inevitable (although unlike with your own home, many are tax deductible!) and fixing things in a timely manner will keep your carefully selected tenant happy. It’s much more expensive to keep changing dissatisfied tenants than paying for a plumber or electrician in for a quick visit. And always remember – it’s your investment, but it’s their home. Invest in a property manager who cares Make the experience a whole lot more fun and far less daunting by engaging a property manager who understands all the ins and outs of Perth property management, and cares about your property and financial goals as much as you do! Diana creates a seamless experience for her clients by ensuring the property is in great shape and managing a mutually beneficial relationship with your tenants. Mount Hawthorn property management is where Diana’s expertise lies, but her properties extend far and wide across Perth. To have a chat about how Diana can assist you with your property, call her on 0402 888 550.
Jul 21, 2022
Keep it clean – how to rid your rental property of mould
All the best property management firms in Perth have deep clean professionals on speed dial – because there’s nothing better than entering your new rental property with the fresh, citrusy notes of clean. However, there is an insidious issue that we have come across more than a few times in our 16 years of experience in property management services and that’s mould. It’s not just creeping onto the crust of your week-old sourdough, mould can seep into your home in areas exposed to humidity or moisture and it has a particular penchant for bathrooms, and other rooms or cupboards with minimal ventilation and natural light. Sometimes, it’s not even visible and might be growing in wall or ceiling cavities. Left untreated, it can spread far and wide into carpets, linen, towels and even your beloved shoe collection. Despite Perth having a mostly dry climate, the wet days of winter and suburbs near water sources (think lakes or the river) can create idyllic conditions for mould to set up camp. So, how do you know it’s there and once you discover it, how do you treat it? Sniffing out mould Some mould is easy to spot, with dark grey or green spores presenting on walls, ceilings or grouting between tiles. However, hidden mould behind walls can be identified by a general feeling of dampness that doesn’t go away or a musty, stale smell. Whose responsibility is it to remove? Firstly, it’s within the property management service realm, so contact your property manager to discuss when it might have formed and why. It’s possible you will be responsible if there was no sign of it prior to moving in, so consider whether you have left wet towels in a low-ventilation bathroom, or you rarely clean the inside of bathroom or kitchen cupboards which are often subjected to dampness and zero natural light. If you’ve just moved in, another reason to immediately contact your property management team because the landlord absolutely needs to provide a reasonably clean property and assist in the maintenance to keep it that way. Another landlord responsibility would be to fix any leaks quickly, because if they’re left too long, it creates another perfect breeding ground for mould. If it’s your responsibility – how do you get rid of it? As we mentioned, the best property management in Perth will have excellent cleaners ready to go, so if it’s beyond your cleaning skills we are here to help. However, if you’re a tenant and wish to fix an issue you might have caused and the mould hasn’t spread too far, you can tackle mould with these steps: Wear rubber gloves, long sleeves and a dust mask to protect yourself from touching or breathing in any of the mould Scrub the mould off surfaces with soap, water and a scrubbing brush Disinfect the area with a strong disinfectant such as hydrogen peroxide, undiluted white vinegar, bleach or Dettol Create as much ventilation to the area to dry it out and remove the disinfectant fumes Throw out any household items such as towels or linen that already have mould Get on top of mould as quickly as possible! Like most things, prevention is better than cure, so keep those potentially damp and dark areas of the home clean, well-ventilated and open as much as possible! If you need more advice on Mount Hawthorn property management (and surrounds), contact our director Diana Patrascu on 0402 888 550 for a chat.
Jun 16, 2022
How to break your lease with as much ease as possible
It’s never ideal to break your lease before its time is up. However, life doesn’t always work to a perfect schedule and circumstances change. Some leases are worse to break than others, so I thought I’d take you through what it means to break your lease, types of leases you can break with more ease and reasonable grounds for lease breaking. Can you break your lease? At D Residential Group, we aspire to take the best care of both our property owners and our tenants, therefore we recommend you try to avoid breaking your lease early. Breaking a lease early involves some costs and stress for your landlord and property manager. In saying that, lease terminations are often unavoidable, and a good property manager will help you make the process as seamless as possible. Ideally, create open communication channels with your property manager as soon as a potential lease-breaking situation arises so we can best assist. Types of leases There are two types of leases you will sign up for when renting a property: a periodic or a fixed-term lease. You might be able to guess that one is much easier to break than the other! Terminating a periodic or rolling lease is a simple process and in Western Australia, requires only 21 days’ notice (note: each state across Australia is different). Once you provide notice in writing, via post or email, your lease will end in 21 days. Always request confirmation of your notice from your property manager to reduce any delays. A fixed-term lease will be a lot more complicated and costly to break. If this is the lease you are bound by, you’ll need to seek permission from your landlord, via your property manager, with your intention to terminate ahead of schedule. Your property manager will then determine what compensation for any losses you will be liable for, which will most likely include loss of rent, advertising costs and a reletting fee. The property owner is entitled to recover any losses derived from the early termination of the fixed-term lease. Reasonable grounds for breaking your lease While most people want to break a lease because they’ve found somewhere else to live, there are legal reasons that protect the tenant, too. If you are experiencing undue hardship that means you are unable to continue paying your rent, you can apply to the Court to terminate early. If the home has become unliveable, where the property is considered a health hazard or dangerous, speak to your property manager about terminating. This might be issues such as mould, sub-standard ventilation, security risks or defective structures. If there are any other breaches to your rental agreement, from not repairing any faults to the landlord entering the property unexpectedly, you have the right to discuss early termination with your property manager. Under the 2019 revisions of the Residential Tenancies Act, victims of family violence are able to terminate their lease. If you are experiencing family violence, please speak to your property manager who will provide advice immediately. The most important thing to remember when considering breaking your lease, is to communicate openly and quickly with your property manager and cooperate as much as possible. If you have any more questions on the topic, I’m always open for a conversation so call me on 0402 888 550. Diana
May 24, 2022
Top tips to help property investors prepare for tax time
Gather up your paperwork everyone, it’s every accountant’s favourite time of year – tax time! It can be a headache for those of us not quite as well-versed in all things tax but it’s vital to have all your details correct as mistakes can be very costly for property investors. Ideally, find a tax agent who will go through everything with a fine-tooth comb to ensure you achieve the best outcomes. With 15 years of industry experience, we have gone through the process many times and have come up with a list of the key aspects to be aware of as you prepare for your tax return. Be aware of deductions you can and can’t claim This is the best bit – discovering all the deductions you are entitled to as an investor that will lower your taxable income. At this point, you need to gather all receipts of expenses you’ve had throughout the year. You can find out the nitty gritty at the Australian Taxation Office (ATO) website, but item that aren’t always obvious for claiming include advertising, interest from mortgage, mortgage fees, council rates, maintenance costs, accountant’s fees, insurances, and property management fees. Depreciation Unlike the above-mentioned deductions, depreciation is a different beast as it’s not based on any expenditure, but depreciation can greatly impact your tax return depending on when your property was built. You can’t claim on properties built before 16 September 1987 but beyond that date, you can claim depreciation costs of 2.5% per year for 40 years. It can be a complicated claim, so we recommend looking into a quantity surveyor who will provide you with a formal tax depreciation schedule and well worth looking into. Income goes beyond rent This is the not-so-best bit where you might be up for paying tax. Of course, any rent you received must be added to your income tally, but don’t forget other investment dollars such as rental bond returns, insurance payouts (including for lost rent), booking fees or any property sales. Don’t rule out last year’s claims You have two years to adjust your claims with the ATO for small to medium businesses, which included property investments. So, if you’ve forgotten to include depreciation in the years you’ve owned a property, you can at least amend the past two years. There’s a lot that goes into a good tax preparation, so start collecting your paperwork early so by 31 October you have done all the work required! If you need recommendations of good tax agents or quantity surveyors for your property, call our director Diana Patrascu on 0402 888 550.
Mar 23, 2022
Eight ways to spot an unprofessional property manager – and how to break free
With the current rental shortage in Western Australia, having a good property manager will give you a huge boost to ensuring your investment is in the best possible position thanks to their market knowledge and expertise. I’m working with my clients to create positive relationships with their tenants while maximising their investment return, which takes a lot of administrative work and great communication. However, not all property managers operate in the same manner, despite being able to talk the talk. If you’re questioning your property manager’s professionalism – here are my top eight signs you should be seeking a better option. Poor communication Everyone is busy, however, your property manager should always return phone calls and emails promptly. It is rare for me to not answer the phone, but if I’m with another client it can happen, so I call or email my clients back as soon as possible (and definitely within the day). Any issues are taken care of promptly and my clients know they’re always my priority. Not nice is not ok Do you walk away feeling looked after, or as if you’re burdening your property manager with your queries? If it’s the latter, that’s just not ok. A pleasant demeanour is one of the first attributes a good property manager should display and key to forming a good client relationship. If they’re not nice, there are plenty that are – start looking elsewhere! Rent stagnation Part and parcel of property management is working with tenant changeovers, as people move onto different locations for various reasons. If your property manager is avoiding tenant changeovers by lacking confidence in rent negotiations, you’re not getting what you should out of the relationship. When a lease is up for renewing, your property manager should confidently renegotiate on your behalf and keep rental prices moving with the market. If they’re not, time to have a hard conversation with them or move on. Not showing up Missing routine inspections or private viewings is one of the biggest no nos in the industry – if this is happening to you with your property manager it’s a big red flag. If they’re late, it’s also not a good look so unless there is a very good reason, I’d be seeking out new representation straight away. Viewing for you, or for me? Ideally, you want your property to be viewed by as many good prospects as possible. So, if your property manager holds 3pm viewings on a weekday, there’s a good chance it’s better for them than you and your property. I know many people like to keep their working hours to the 9 to 5 schedule, but if you have your client’s best interests at heart, you’ll have your viewings at a high traffic time. I always hold my property viewings after normal work hours on weekends, which fortunately works better for my lifestyle, too! Bad tenants and evictions These things can happen, but with good screening processes, they tend not to. If you have a bad tenant situation, I’d be asking the steps your property manager took before signing the lease with them. If they haven’t completed due diligence with references, it’s not just a bad tenant you’re dealing with… Unexplained or unnecessary maintenance costs We all know maintenance costs need to be budgeted for with our properties, but they must be accounted for and justified. Some property managers rely on the margins from maintenance, which isn’t great practice. If you have concerns, try asking for before and after photos, documentation on who requested the repair and insist on invoices. If they can’t produce at least one, and ideally all of these, start scouting for a new property manager pronto. Missing monthly statements At D Residential, we send out monthly statements and they’re always on schedule. Administration should never be chased by a client – ever! That’s what you pay a property manager for and if yours isn’t getting this job done on time, you have to ask yourself… what are you paying them for? If any of these issues are cropping up for you, I’m sorry you’ve been treated this way. I’d love to help rebuild your trust in property management and show you exactly how successful your investment can be in the right hands. Call me for a confidential conversation on 0402 888 550. Diana
Jan 27, 2022
That sweet spot – how to choose the location for your next investment
When choosing our own home, it’s easy to be swayed by emotional decisions such as living close to friends, family and our workplaces, let alone falling in love with the lifestyle created by the home. None of these apply when purchasing your investment, which opens up a lot more scope to choose wisely (head over heart, people!). However, when there is more choice, often there can be some overwhelm. So, I want this blog to guide you through the process so you find a property investment that will maximise your return. Firstly, review the vacancy rates. It’s a good time to be a property owner in Perth (although I’ve said that for a while, the market doesn’t seem to be slowing down!), but it’s important to check where vacancy rates are low which means your property will not be empty for long between tenants. Also, a location with high vacancy rates will be harder to sell in the future. Consider your future tenants who will, like you, be imagining how their lifestyle will look in your property. Make sure there is access to schools (and ideally, good schools with high ranking), shopping centres, hospitals and gyms – the modern conveniences that many of us like to be within a walk or short drive of. Be aware of any future infrastructure or planned development projects which will eventually increase rental value and property value if you were to sell. Things to avoid, like I said, is to keep your heart in check and don’t let your own emotions get involved! Don’t buy a location that suits you or a property that is simply aesthetically appealing to your eye. In fact, take someone trusted with you to home opens who will keep you accountable to your investment goals before you commit, or point out things you might not have considered. Also, focus on the surrounds of the property – keep your eyes out for neighbours (good or bad, they have the potential to make a big difference to your tenant’s happiness!) and the general aesthetics of the street. Also, avoid suburbs with large existing rental pools as you’ll be competing with a lot of other landlords for the same group of renters, which can drop rental value. Beyond your own research, should you be using a local property manager once you have chosen your desired investment location? Well, yes and no! It’s much easier for local property managers to attend home opens on your behalf and of course, they have knowledge of the area which is valuable. However, new technology and programs used by good property managers means we can easily service areas outside of our immediate suburbs. Potential tenants rarely go to a property manager or real estate agent’s office to research their next abode, we know they’re more likely to visit websites such as realestate.com.au, reiwa.com.au and domain.com.au to scour their options. And once you have your investment and a good tenant, advanced property management software allows us to manage properties via an online portal anytime, from anywhere. So, instead of a local property manager – focus on finding the right property manager! One with great references (ideally from someone you know), one you have a great rapport with because you’ll be dealing with them frequently and one who is equally driven to help you achieve your property portfolio dreams. There are some excellent property managers out there, and if I sound like the right match for you, contact me on 0402 888 550 to discuss your options. I believe location stands as one of the most crucial considerations before buying a property and I can’t wait to help you find the perfect place for your investment.
Sep 8, 2021
The difference between real estate agents and property managers
How many times have I been labelled a real estate agent? Countless! The real estate and property management industries are often lumped together as there are many crossovers, but it’s important to understand the different services they provide. So, I wanted to use this blog to clear up how my services as a property manager differ and explain how your investment can reach new heights when you hire the right person. Who does what? Real estate agent v property manager Both can serve a great purpose for finding your dream home and are experts in their fields, so this isn’t about who’s better! However, a real estate agent deals with listings and selling properties on behalf of property owners and uses their expertise to market and sell the property to achieve top dollar for their client. If you are buying from a real estate agent, they will present a selection of properties based on what your needs are and demonstrate good knowledge of the market so you pay an appropriate price. It’s known as a transactional relationship as once the property is sold or bought, you might get a bottle of champagne and then they’re on to the next client. Property managers on the other hand, get to work once you’ve purchased the property. I see it as a much closer and longer relationship with my clients, and one which I put a lot of time into. We deal with all management aspects of the property on behalf of the owner, including maintenance, repairs, sourcing tenants, dealing with tenant issues and more. Essentially, we provide peace of mind for the property owner as we look after all the details of their investment, big and small, and then tend to the needs of the tenants. A happy tenant equals a happy owner! Why choose a property manager over a real estate agency offering similar services? It’s true, real estate agencies do often provide this service but there is one key difference when you engage a dedicated property manager. In an agency, there is a good chance you will be passed around depending on who is available to respond to your query or your tenants’. It’s a lottery that all too often leads to inconsistent service… When you have a property management specialist, you receive one point of contact who is dedicated to ensuring your investment grows in value, that it is well-tenanted, maintained beautifully and the rent is paid on time, every time. If you are serious about your property portfolio, hire a good property manager for consistent, high quality service, expert advice and a serious reduction in stress. Ok, I need a property manager stat… How do I find the right one for me and my investment? Before choosing a property manager, I recommend doing your research as ideally it will be a long (and wonderful) relationship! Look for a specialist in the area with abundant experience in the property investment industry. Once you have found some potentials, treat it like an interview process and ask the right questions. Find out how many years’ experience in the industry do they have, ask their process for screening and selecting tenants, and check what their recommendations are on reducing risk and increasing returns. Once you have your answers, you should feel comfortable and assured you’re making the right choice! If you need any further clarification on how a good property manager can maximise your investment and really make your life a whole lot easier, give me a call on 0402 888 550.
May 3, 2021
How investors can make the most of tax time
Pour yourself a strong coffee and prop up your eyelids with toothpicks, it’s time to talk tax. To entice you a little more, this blog is going to teach you how to make, or at least save, a substantial amount of money. As a property investor, it’s really important to be aware of how tax depreciation works and how you can maximise your return… So here’s the what, why, how and who of making some money back on your investment. What is tax depreciation? Tax depreciation is a tax deduction claimed for the natural wear and tear of an income-producing building and its assets over time. It is generally the second biggest tax deduction for property investors, after interest. Every residential property investor should have a tax depreciation schedule to substantiate and claim maximum deductions. You can claim this loss in value as a tax deduction in your annual tax return. A depreciation schedule lasts for the life of the property, which is 40 years. You need to pay one initial tax-deductible fee for the schedule, and then it is yours to provide to your accountant throughout the life of your property. If you make significant changes to your property, you may need to update your schedule. Who can claim tax depreciation? Tax depreciation deductions are available for both residential investment property and commercial buildings. Most properties (new and old) have depreciation available. How do you claim tax depreciation? Good news alert! You don’t need to spend money to claim tax depreciation. Tax depreciation deductions are split into two categories: Capital works deductions This refers to the buildings structure and items that are permanently fixed to the property such as kitchen cupboards, doors & sinks. Typically makes up 85 to 90% of the total claim, or Plant and equipment depreciation This refers to items which are easily removable from the property such as carpet, hot water systems and blinds. These assets have a limited effective life as set out by the Australian Tax Office and can generally be depreciated over time. There are different rates of depreciation available for different properties based on their type, industry and construction commencement date. For more help determining the rate for your property, contact one of my recommended tax experts listed below. Can you claim in retrospect? More good news, you can claim previous renovations. Anything in the property that is part of a previous renovation will be estimated and depreciated accordingly, even if the work was completed by a previous owner. This includes items that are not obvious, such as new plumbing, water proofing or electrical wiring. Do certain property types attract a bigger claim? While almost all residential property investors can claim depreciation, given the 2017 legislation, those who build or buy brand new rental properties will usually claim higher deductions. However, any residential property that has either been built or renovated since 1987 will have a structural claim that will give ongoing deductions for forty years. I’m ready to make money… where do I start? We can recommend some experts in this field who can assist with arranging a depreciation schedule for your property. BMT Tax Depreciation – 1300 728 726 or head over to their website at www.bmtqs.com.au DEPPRO Depreciation Professionals – 9381 6100 or https://deppro.com.au/location/perth/ Asset Reports – 1800 47 37 67 87 or https://www.assetreports.com.au/residential-td Any final words of wisdom? The most important step is to get yourself a depreciation schedule, it’s an essential aspect of any investment property strategy. We recommend you get your schedule soon after settlement to ensure that you’re claiming the maximum deductions straight away. However, if you’ve owned your investment property for many years, it’s not too late! A depreciation schedule can be used to amend up to two previous tax returns to recoup missing deductions. Now is the time to order your schedule – if you pay before June 30, you can claim the fee as a deduction in your tax return this financial year. If this all seems sounds like a foreign language still, I’m more than happy to discuss the topic in further detail. Contact me for a chat on 0402 888 550.