by George Astudillo | Jun 3, 2019 | Landlord mindset, Management Systems, Presentation, Tenant
More than 60 per cent of Aussies are pet owners so it’s a major concern for renters.
According to the RSPCA, Australia has the highest pet ownership in the world, with 63% of Australian households owning a pet totalling over 25 million pets. Predictably, dogs are the most common pet at 39% followed by cats at 29%.
With companionship being the chief reason for having pets, it’s no wonder we treat our pets as children.
So what happens if you own a pet and you’re renting?
If you’re planning to rent an apartment, the first challenge is the Strata by-laws which may prohibit the ownership of any pet.
After that it’s all up to the landlord.
So why do so many landlords refuse pets, and keeping in mind the law of averages, many of these landlords probably have pets of their own?
Well, it’s because pets often mean fleas, stains, odours, noise and damage. In NSW a landlord is not permitted to ask for a bond any more than the equivalent of 4 weeks rent. If a landlord allows a tenant to have a pet on the property, all they are allowed to ask is that the property be fumigated when the tenant vacates.
For a landlord there is very little upside to the risk of having a pet on the property. Or is there?
Over the next couple of years, the supply of apartments in Australia is set to increase substantially with a large proportion of these properties ending up as rentals. This will mean stronger competition for tenants. To weather the storm, landlords will need to make their properties stand out from the crowd to avoid vacancy and lower rental yield.
With so many potential tenants with pets is it possible for a landlord to consider allowing pets as their point of difference? And if so, how do you make a property pet friendly?
These are the main areas that need to be thought through,
- Floor surfaces – Carpets can absorb odours and become stained, timber floors can scratch easily and stone can be too porous without an effective sealer. Consider vinyl as its warm underfoot and easily cleaned.
- Paint needs to be durable and easy to clean. Choose a quality name brand as they tend to last longer between repaints.
- Ventilation is essential. If pets are left inside for long periods of time odours can build up.
- Curtains can be tricky particularly with cats, blinds can make better sense
- Outdoor areas need to be secure and easy to maintain.
- Regular inspections are essential. At least twice a year inspect the property for wear and tear and for damage. It’s not only good practise for every property but super important with pets.
- Which pet – The style of pet is also crucial. A large dog in a small unit is asking for trouble. Although there are many families in this situation handling it well, as an investor it raises the risk quite substantially. Cats are generally good house pets, they sleep most of the day and are usually very clean, although some breeds can be trouble – too much energy.
- Rental Bond – Western Australia is the only state where a landlord can ask for a pet bond up to $260.00.
- Landlord Insurance is another area that needs to be checked as most policies do not cover for damage caused by pets.
- Lease terms – You can include a special condition in the tenancy agreement that the property be steam cleaned and fumigated when the tenant leaves if you have allowed the tenant to keep a pet.
- Anti-discrimination – You are not allowed to exclude a tenant whose pet is trained to assist with a disability, such as a guide dog.
- References – Be very thorough with references. Make sure you are comfortable that the character of the tenant is in keeping with keeping having a pet in your property. Better be safe than sorry.
Copyright © 2016, www.propertyquarters.com.au
by George Astudillo | May 2, 2019 | Legislation, Management Systems, Tenant
‘The Lucky Country’ for renters depends on which state/territory you live in.
Australia, the lucky country. Yet, as a landlord or tenant, the luck can depend on where you live.
Each state and territory in Australia has its own tenancy legislation. That’s eight sets of rules for tenants and landlords to live by. There may be some similarities but each one is distinct. So if you own property in different states or you’re a tenant that needs to move interstate for work, you need to be well versed in the tenancy legislation of each state.
So what gives?
On January 1 1901, Federation day, The Commonwealth of Australia was formed. That day a new constitution created a Federal Government with powers and rules and thus a new nation was born, the Australia we know and love.
Even though we have a federal government, each state retains the power to have its own constitution and its own legislature, so in terms of residential tenancies that means eight sets of legislation.
So what are some of the differences?
Stamp Duty
It’s understandable that each state has different financial requirements and expenses. So how it collects taxes, such as stamp duty and land tax will vary, and it does. Using the March 2016 figures from Australian Bureau of Statistics, the mean value of dwellings in Australia is $613,900. Buying a residential investment property at this price, the stamp duty ranges from $19,155.00 if you bought a property in the ACT to $31,904.00 in VIC (This is based on buying an established property as an investment. ACT=$19,155.00, NSW=$23,115.50, NT=$30,388.05, QLD=$20,650.50, SA=$27,930.00, TAS=$23,088.25, VIC=$31,904.00, WA=$23,175.25).
Cooling off period
Two states in Australia do not have a cooling off period requirement when you buy a property, the others allow the buyer between 2 and 5 days to cool off with a maximum penalty of 0.25% of the sale price, except the Northern Territory where there is no penalty at all.
Utilities
In four states there is no requirement to have telephone, television or internet cabling installed (however if any of these services are already installed, it is the landlord’s responsibility to make sure they remain in working condition). In the ACT the landlord must provide a telephone line and in SA the landlord needs to provide the installation of all three services. In Tasmania and the Northern Territory there is no mention of any requirements.
Tenant Holding Deposits
Some states have elaborate conditions on the amount, length of time and penalty when a tenant pays a holding deposit for a rental property. Whilst in the ACT a holding fee cannot be accepted, in Victoria, the holding deposit must be returned regardless of the outcome and in the NT there are no requirements and at all.
Maximum Rent in Advance
The rules in each state vary from two weeks to one calendar month. In Victoria it also depends on the amount of rent being paid and whether it’s weekly or not.
Tenant’s notice to vacate – (not fixed term)
14 days (NT, QLD, TAS), 21 days (ACT, NSW, SA, WA) and 28 days (VIC).
Landlord ending a periodic lease – (not fixed term)
If a landlord wants possession of their property back, other than for a breach of the lease, the amount of notice required to issue to the tenant ranges from TAS – 28 days, NT – 42 days, ACT & WA – 8 weeks, Vic – 60 days, QLD – 2 months, NSW & SA – 90 days.
Arrears
In Tasmania and Western Australia, a landlord can issue a ‘notice to vacate’ giving the tenant 14 days to vacate the property when a tenant is 24 hours late in paying the rent. And if the tenant in Western Australia is continuously late the ‘notice to vacate’ can be reduced to 7 days. In other states and territories, a tenant needs to be either 7 or 14 days in arrears before a ‘notice to vacate’ can be issued. If a tenant fails to pay the rent up to date by the time the notice expires, the landlord can apply to the tribunal/court to evict the tenant.
So if you’re a tenant in genuine trouble you could be facing eviction in as little as 8 days. On the other side of the fence as a landlord you could be out of pocket a minimum of 4 weeks rent if your tenant has decided to stop paying rent (and usually much longer given the time needed for notices to be served). It all depends on which state the property is in.
Access to a tenanted property
In an emergency, if you own a property in Victoria, you must give the tenant 24 hours’ prior notice before you can enter the property without the tenant’s consent. All other states, in an emergency, allow the landlord to enter the premises without consent and with no prior notice.
Access for other reasons, such as routine inspections, the required prior notice that needs to be issued to a tenant ranges between 24 hours and 14 days.
These are just some of the difference. So it seems that as a landlord the rules of conduct toward your tenant can vary greatly depending on which state your investment property sits. And your rights, as a tenant, also depend on what side of the border you live in.
In an age where the efforts to create equality have made such a powerful difference to the way we live, it seems at odds with that history that a tenant in Albury has different rights to a tenant in Wodonga.
About Us
George Astudillo is the founder of Property Quarters, an agency that values communication and great relationships with its landlords.
George now has more than 30 years in real estate, including 15 years as the owner of a national real estate franchise. He’s also an accredited auctioneer and is the author of “The Landlord Mindset”, a book with his best tips to help landlords look after their investments. His book has been quoted in the SMH, The Huffington Post and The Age.
As the founder of Property Quarters, George takes great care in looking after his landlord’s investments. Having seen it all and worked with may landlords and tenants, he’s a strong mediator and negotiator and knows how to navigate through property legislation.
George is trusted by his landlords to advise on the financial management of their investments. He’s put in place proven processes to ensure each property he looks after is managed effectively to retain its value, quality tenants and rental income.
If you’re looking for a property manager who thinks like a landlord and whose business is built on tested processes, contact us by clicking HERE.
Copyright © 2022, www.propertyquarters.com.au
by George Astudillo | Jan 15, 2019 | Financial, Landlord mindset, Legislation, Management Systems
The Residential Tenancy Amendment (Review) Bill 2018 has now been passed by Parliament.
The Bill has been designed to ensure the Residential Tenancies Act 2010 continues to protect both tenants and landlords. Whilst the Bill has been passed by Parliament, the next step is the development of the regulations, being the specific requirements for monitoring and enforcing the law. The regulations will also answer many of the questions raised by the Bill including the start date for the reforms.
What are the changes?
Minimum Standards
There are rules of what makes a property fit for living. These include:
- Property is to be structurally sound.
- Each room must have adequate lighting and electricity outlets
- Property must have electricity, gas or oil (dependant on availability), proper plumbing and drainage, ventilation and bathroom facilities in a separate room including toilet.
- All of the above-mentioned should be free of dampness/mould and in a good state of repair
Disclosure of information
If the property is a strata lot (ie apartment, townhouse, unit) a copy of the strata by-laws must be given to the tenant before they enter into a tenancy agreement.
Condition reports
Landlords and agents will have the option of giving the tenant either 2 copies of a written report or one electronic version on signing the tenancy agreement.
Landlords information statement
Landlords will need to sign a new form acknowledging that they know their rights and responsibilities as a landlord. The agent will need to have a signed hard copy of the document before they can sign a tenancy agreement on behalf of the landlord. This form has yet to be created.
Landlord’s remedies on abandonment
The break fee payable by a tenant on a fixed lease will change to,
- 4 weeks rent if less than ¼ of the lease has expired
- 3 weeks rent if more than a ¼ but less than a half of the term has expired
- 2 weeks rent if more than ½ but less than ¾ of the term has expired
- 1 weeks rent if more than ¾ of the lease has expired.
Termination notices for non-payment of rent or charges
The landlord will be able to issue a termination notice when a tenant has not paid rent, water usage or utility charges for more than 14 days.
Smoke Alarms
Landlords are fully responsible for Smoke Alarms. A tenant that carries out repairs to the smoke alarm, such as change of batteries, is entitled to be reimbursed.
Repairs/Alterations
Tenants will be allowed to make some changes to the property without needing to seek permission. A list will be included in the regulations.
Rent Increases
Tenants on a periodic tenancy agreement, i.e. where the fixed term has passed, can only be given one rent increase in any 12 month period.
Domestic Violence
Termination
If a tenant is the victim of domestic violence, they will be able to give notice to vacate the property effective immediately, even if the tenant is in a fixed lease, without penalty. A tenant would be considered a ‘domestic violence victim’ if they have a current DVO or they are co-tenant/ person related to the tenant with the DVO that lives on the premises. A tenant would also be eligible if they hold a declaration from a medical practitioner that states domestic violence.
Liability of tenant or co-tenant for actions of others
If domestic violence occurs on the premises and damage is done to the property as a result, the tenant, as the victim of domestic violence, will not be responsible for the cost of any repairs. Any co-tenants to the lease may also be exempted.
Marketing
If a tenanted rental property is due to be marketed for sale or lease, the agent has only one opportunity within the 28 day period before marketing begins to take interior photos. Tenants must be given fair notice to enable them to remove any personal effects they would not like presented in the photos.
A landlord will need written consent from the tenant to publish photos where any of the tenant’s possessions are visible. This consent cannot be unreasonably withheld unless under the circumstances of Domestic violence.
The new tenancy reforms create a greater need for Landlord Insurance. The changes to the break lease penalties could mean higher losses from tenant abandonment and the allowances to victims of domestic violence means that landlords will also become victims.
With the landlord becoming fully responsible for smoke alarms, it will be essential to use the services of a specialist smoke alarm inspection service.
As always, we will need to read the fine print once it has been written and released as law.
About Us
George Astudillo is the founder of Property Quarters, an agency that values communication and great relationships with its landlords.
George now has more than 30 years in real estate, including 15 years as the owner of a national real estate franchise. He’s also an accredited auctioneer and is the author of “The Landlord Mindset”, a book with his best tips to help landlords look after their investments. His book has been quoted in the SMH, The Huffington Post and The Age.
As the founder of Property Quarters, George takes great care in looking after his landlord’s investments. Having seen it all and worked with may landlords and tenants, he’s a strong mediator and negotiator and knows how to navigate through property legislation.
George is trusted by his landlords to advise on the financial management of their investments. He’s put in place proven processes to ensure each property he looks after is managed effectively to retain its value, quality tenants and rental income.
by George Astudillo | Nov 1, 2018 | Financial, Landlord mindset, Management Systems, Tenant
Who you select as the tenant for your investment property will have a major impact on both your financial return and your peace of mind.
There are three things that you need to look for in a tenant:
- Reliability
This is mainly about paying the rent. You need to be sure that the tenant can afford to pay the rent without undue strain. As a general rule of thumb, rent should be around a third of the (combined) gross income of the applicant(s).
- Responsibility
How will your tenants treat the property? It’s important to make sure that they will take the appropriate steps to keep the property clean, minimise any wear and tear and are ready to advise of any property issues that may come up. A careless tenant, on the other hand, will create extra problems which means more costs to you.
- Responsiveness
In the event of a problem the last thing you need is an uncooperative tenant. Willingness to collaborate and assist will not only make life easier for all, but will also reduce costs and time.
The first two points can be easily addressed with an effective tenant application. You will want to follow up on the application to confirm financial details with employers and past tenancy performance with landlords and agents. As a final measure, you can also run a check through a tenancy database such as TICA or National Tenancy Database to make sure they are not listed as a problem tenant.
However, recognising a co-operative nature may require more of a gut feel evaluation. Use the time during inspections and negotiations to assess the personality and character of the potential tenant. Their attitude during these moments can be very revealing.
Many of the problems faced by property investors can be avoided by selecting the right tenant. It’s the tenant that underpins the success of owning an investment property, both commercially and emotionally. So it’s important not to take risks or compromise when it’s time to choose a tenant.
About Us
George Astudillo is the founder of Property Quarters, an agency that values communication and great relationships with its landlords.
George now has more than 30 years in real estate, including 15 years as the owner of a national real estate franchise. He’s also an accredited auctioneer and is the author of “The Landlord Mindset”, a book with his best tips to help landlords look after their investments. His book has been quoted in the SMH, The Huffington Post and The Age.
As the founder of Property Quarters, George takes great care in looking after his landlord’s investments. Having seen it all and worked with may landlords and tenants, he’s a strong mediator and negotiator and knows how to navigate through property legislation.
George is trusted by his landlords to advise on the financial management of their investments. He’s put in place proven processes to ensure each property he looks after is managed effectively to retain its value, quality tenants and rental income.
If you’re looking for a property manager who thinks like a landlord and whose business is built on tested processes, contact us by clicking HERE.
Copyright © 2022, www.propertyquarters.com.au
by George Astudillo | Jan 8, 2018 | Financial, Landlord mindset, Management Systems, Planning
Does investing in property take you outside of your comfort zone?
Most people understand the concept of living within your comfort zone. When the events in your life are within your comfort zone you feel relaxed and calm. When events occur that take you outside of that comfort zone, that’s when you start to feel pressured and anxious.
And whilst a little pressure is ok, even beneficial, too much will create panic.
How you buy and manage your investment property, which tenants you choose and how high your mortgage repayments are, will have a direct effect on your peace of mind. The higher the risk, the higher your tolerance of risk needs to be. Too much risk and you will become anxious and uncomfortable.
By knowing your position on risk, you can use strategies that will help keep you in the comfort zone. It’s also important to know the risk tolerance of others particularly in the following situations.
Partnerships
When buying an investment property with other people, the risk profile of the partners involved may vary greatly potentially increasing the chances of conflict. If one partner can tolerate a higher risk level they will want to pursue a more aggressive investment strategy, which will make the other partner with a lower tolerance apprehensive and anxious. This dynamic is often the cause of friction between couples where one partner’s ideas are considered reckless and the other partner is accused of stalling. This situation can also occur with other family members and well-meaning business partners.
Financial advice
When seeking financial or property advice make sure the person giving the advice is sensitive to your level of tolerance. If your risk tolerance is low, trying to follow the advice from someone that has a high risk tolerance will result in many sleepless nights. When fear and panic creep in, it will be difficult to keep making the appropriate decisions to maintain a high risk strategy. Alternatively receiving tame advice when you are looking for fast growth will leave you underwhelmed and disappointed.
Overwhelm
Some feelings of nervousness are natural when investing your money, but if you feel overwhelmed on a continual basis you may need to look at your strategy and/or seek advice from a property professional that can help minimise the risks. Many times it’s the accumulation of many small risky decisions that add up to one huge headache. Stepping back occasionally can help clarify which areas are making you feel uneasy.
So, how do you feel about your investments? Are you comfortable?
Thinking of investing? See our previous blog “Mortgage Brokers- What Do They Offer the Property Investor”
About Us
George Astudillo is the founder of Property Quarters, an agency that values communication and great relationships with its landlords.
George now has more than 30 years in real estate, including 15 years as the owner of a national real estate franchise. He’s also an accredited auctioneer and is the author of “The Landlord Mindset”, a book with his best tips to help landlords look after their investments. His book has been quoted in the SMH, The Huffington Post and The Age.
As the founder of Property Quarters, George takes great care in looking after his landlord’s investments. Having seen it all and worked with may landlords and tenants, he’s a strong mediator and negotiator and knows how to navigate through property legislation.
George is trusted by his landlords to advise on the financial management of their investments. He’s put in place proven processes to ensure each property he looks after is managed effectively to retain its value, quality tenants and rental income.
If you’re looking for a property manager who thinks like a landlord and whose business is built on tested processes, contact us by clicking HERE.
Copyright © 2022, www.propertyquarters.com.au
Copyright © 2016, www.propertyquarters.com.au
by George Astudillo | Oct 2, 2017 | Landlord mindset, Management Systems, Planning, Repairs and Maintenance
How involved are you in the management of your investment property?
Managing an investment property requires many tasks to be scheduled and carried out. Collection of rent, routine inspections and attending to repairs are just some. Responsibility for these tasks can vary from landlord to landlord.
There are however four basic types of involvement.
- Complete do-it-yourself
This means you handle all aspects of managing the property, from finding and screening the tenant to handling repairs, maintenance and all of the accounting.
The most useful skills in property management are common sense and a willingness to understand and compromise.
At this level you will need to understand the tenant’s rights, your obligations as a landlord and applicable documentation.
Apart from understanding the applicable legislation, you will need to have a flexible timetable to allow for problems when they arise. Repairs, particularly emergency repairs, need to be acted on quickly. Problems that come up may require many hours negotiating and possibly time at tribunal hearings.
The two main benefits of this style of involvement are having complete control over your investment and saving on agent fees.
For a closer look on managing deadlines see our blog “Failing to Plan is Planning to Fail”
- Do-it-yourself management with some outsourcing to an agent
This level of involvement is the same as the first except you outsource some tasks.
Finding a tenant and attending to the initial documentation are the most common tasks that DIY landlords hire an agent to assist with. The minimum fee for finding a tenant is usually two weeks’ rent and there are many agents that offer this service.
The benefits and problems of this level of involvement are similar to the previous level with some added agent fees for the services you prefer an agent to do.
- Professional property manager under your supervision
This is where you engage a professional property manager to do all the work and they report back to you for all approvals. You make all the decisions and they carry out all the tasks. The agent is then responsible for complying with all relevant legislation, finding a tenant and managing the property. When a problem arises, they contact you for instructions, then take care of it.
The agent, in effect, becomes fully responsible for ensuring all aspects of your investment are looked after, with clear communication before and after completion. They handle all contact with the tenant, giving you a clear buffer and access to professional advice before responding to problems or tenant requests.
The agents fee is an added expense but it is fully tax deductible. However, keep in mind that not all agents are the same and you may still need to manage the agent.
- Professional property manager with clear written parameters
Sometimes, a landlord has no desire or available time for anything other than emergency issues and engages a property manager to undertake all tasks.
The property manager is given authority to undertake these tasks and reports back to the landlord on completion. This allows the property manager to approve repairs up to an agreed value, review rents as appropriate, negotiate with the tenant and attend to all the necessary duties to keep your property running smoothly and profitably.
This type of arrangement needs a clearly documented and comprehensive schedule, monetary limitations and a plan. Both you and the agent need to be clear on who is responsible for what and when.
Most investors start with a level-three involvement and slowly allow things to slide into a level-four arrangement. As time passes, they tend to take less and less of a hands-on interest in their property and rely more and more on the agent. As the transition is not planned, there is no schedule, guidelines or plan for the agent to follow. This can lead to tasks not being completed and ultimately a neglected property and tenant.
So how hands on are you?
For a simple look at budgeting and expenses see our blog here.
About Us
George Astudillo is the founder of Property Quarters, an agency that values communication and great relationships with its landlords.
George now has more than 30 years in real estate, including 15 years as the owner of a national real estate franchise. He’s also an accredited auctioneer and is the author of “The Landlord Mindset”, a book with his best tips to help landlords look after their investments. His book has been quoted in the SMH, The Huffington Post and The Age.
As the founder of Property Quarters, George takes great care in looking after his landlord’s investments. Having seen it all and worked with may landlords and tenants, he’s a strong mediator and negotiator and knows how to navigate through property legislation.
George is trusted by his landlords to advise on the financial management of their investments. He’s put in place proven processes to ensure each property he looks after is managed effectively to retain its value, quality tenants and rental income.
If you’re looking for a property manager who thinks like a landlord and whose business is built on tested processes, contact us by clicking HERE.
Copyright © 2022, www.propertyquarters.com.au
