Market Updates

After a bit of a wait we now have an update for you courtesy of the Real Estate Institute from South Australia and there looks to be some very positive outcomes for Landlords! The State Government has released an amended Bill including the following key reforms.

The ability for landlords to apply to the Tribunal for vacant possession after serving the tenant with two valid breach notices in the previous 12 months

The ability to hold an additional bond if the tenant has a pet (and the landlord agrees to housing the pet on the property)

The liability for all water usage charges to fall for the tenant in the absence of an agreement (supply charges will still stay with the landlord)

Landlords will be responsible for tenant losses if they fail to repair reasonable condition requests

Rent under a fixed tenancy will not be able to be increased within 12 month of the rent being fixed or last increased

The Government has indicated they would like to pass this legislation before the end of the year, which would mean any changes would probably start operation in early 2013. Stay tuned for more details on this important issue!

When it comes to your investment there’s more than one way to maximise your financial return. Increasing your rent and cutting costs may be the first steps to growth but knowing how to make the most of your return at Tax time can have the greatest positive impact on your finances.

It’s all about knowing what costs and services you can claim as a deduction. You never know we may have uncovered a few hidden ones that will make your day.

Management Fees & Leasing expenses
Most investors are aware that the fees you pay to Rent All for managing your investment are deductable, but did you know that the advertising charges you incur when finding a tenant are also deductable? Every little bit helps so check your statement closely for this one.

Body Corporate Levies
If your investment is part of a complex then it’s highly likely that your quarterly contributions are also deductable. One off levies raised for capital improvement are exempt, however every day administration and sinking funds are eligible.

Repairs & Maintenance
While there are some grey areas when it comes to maintenance, the general rule is if it’s a ‘repair’ its deductable in full, if it’s a replacement then you may be able to claim capital works deductions for the expense. Keep track of your repairs and replacements throughout the year to make the most of these deductions.

Council & Service Rates
Council rates and water charges are two more deductable expenses. It’s also a good time to speak with your Property Manager and check if your tenants are paying for their water usage throughout the year. If not that’s a clear area to assist with your investment’s cash flow rather than waiting until Tax Time to recoup these charges.

Insurance
Building, Contents and Public Liability insurance are all deductable as part of your expenses in maintaining an investment property.

Cleaning
Often needed when tenants vacate a property, cleaning expenses can be that unexpected cost that hits the hip pocket when you least expect it. The good news is that this service is yet another that can be claimed come the end of financial year.

The list of rental deductions is nothing short of extensive. There’s so much more than what we’ve listed above and to help make your life easier we’ve uploaded a copy of ‘Rental Properties 2011’ from the Australian Taxation Office for your perusal.

Maximise your return this year by speaking with your accountant and making the most of your available tax deductions.

We’ve been waiting patiently and finally it is happening... the Residential Tenancies Act is under review and we all have the opportunity to have our say on the changes to be made.

The Government has released a discussion paper containing 68 proposed reforms to improve the agreements, lifestyles and processes for all parties involved in renting a home. Here’s a snapshot of some that we believe will have a positive impact to the industry.

Recommendation 5: Provision of Landlord Details
Welcome news for many, the details of Landlords who choose to use a Management Agency will now remain private under this reform with Tenants given the details of the agency only. Currently, a Landlord’s details (name and residential address) must be provided to a tenant via the Residential Tenancy Agreement, this will no longer be the case.

Recommendation 12: Electronic Rent Payment dates
Rent paid by Tenants electronically will be taken to be paid on the date the landlord or agent receives the rent in their account. This puts the onus back on the tenant to ensure the payment is in the relevant account on the due date rather than appearing as funds up to two days later. Good news for Landlords and Property Managers - an end to delays with rental payments!

Recommendation 33:  Agreement for fixed term continues if not terminated
This is good news for both Landlords and Tenants approaching the end of a tenancy term. Parties to a fixed term agreement will be required to notify each other at least 28 days before the end of the term if the agreement is not to be renewed. Plenty of time for moving into a new home or advertising and securing a new tenant.

Recommendation 40: Termination of lease by Landlord
Landlords who have properly served Tenants with a Form 2 notice for rent arrears twice in 12 months will be able to apply directly to the Tribunal for vacant possession if the tenant is in rent arrears for a third time. This will break what can become an ‘arrears cycle’ and put the Landlord back in the driver’s seat – we’re certainly happy to see this one be introduced.

With the reforms open for comment until Friday the 15th of June, our team has already been in discussions with the Real Estate Institute to put forward our best recommendations to improve Property Management as a whole and you have the opportunity to do the same.

Simply click here to view or download the full discussion paper and then you can have your say via this same website.

As new details arise regarding the review, we’ll keep you up to date. In the meantime if you have any queries or would like to discuss the review we look forward to hearing from you.

Analysts and property commentators around the nation have jumped on the first quarter results for 2012, looking for a positive way forward for the remaining year.
To bring you the most educated views on what’s in store for our market place, we’ve scouted news from some of the best in the industry; Real Estate analysts RP Data and Australia’s leading property investment advisor Michael Yardney. Here’s what they have to say...

RP Data on housing values and Yields
Australia’s housing market is showing signs of stabilising after home values rose 0.2% in March while remaining unchanged over the quarter due to a 1.1% growth in Sydney’s market.
“Values were down across many of the other capital cities over the quarter with the most significant drop recorded in Adelaide where dwelling values were down 1.5%”
Meanwhile yields are showing modest improvements. “Rental yields for houses across the combined capital cities have moved from just 3.6% eighteen months ago to 4.1% and gross yields on unit dwellings have improved from a recent low of 4.4% to 4.8%”. Locally rental houses are returning an average yield of 4.4% and units 4.7%.

Michael Yardney on what’s to come...
“We’re entering the stabilisation phase of the property cycle, where buyers are returning and slowly taking up available stock, but not really pushing up prices yet. This means our property markets are likely to remain soft this year, but should keep consolidating. How soon things turn around will depend a lot on buyer confidence, and this will depend upon what’s happening overseas, how our local government performs & what happens with interest rates.”

...and investing
“The long-term future is assured for those who invest in property. At some stages in the economic cycle property values will rise strongly and at other times they will languish. When people can’t afford to buy property (when price growth slows because of decreased demand), people end up renting; so investors win by getting better returns. And that is currently happening.”

It’s a good time for savvy investors to buy property at a low price to enjoy capital growth in the years to come and the team at Rent All are here to help you manage that investment.
 

While home values across our state continued to decline last month (down 2.7%); for investors the news isn't all doom and gloom.

According to the team at leading property analysts RPData, there has been consistent growth in rental yields across the capital cities since late 2010 when the market first began to soften. In Adelaide houses are returning an average yield of 4.2% while units are seeing a traditionally higher yield of 4.8%, keeping in line with the nation's average yields.

Time on market for rentals is however prooving a little lenghtier due to an increase in supply (see below). The number of properties being advertised for rent is up 17% from the same time last year in SA alone, well above the national rise of 8.5%, yet these properties are continuing to attract interest from prospective tenants.

 
Market statistics provided by RPData.com

With a heightened supply of homes, tenants are now in a position to take their time and be a little 'choosy' before locking into a Tenancy Agreement. Properties that are being let in a shorter space of time continue to be those that are well kept and presented. For landlords currently advertising, it may be worthwhile thinking of this time in a positive light as the ideal opportunity for an upgrade to your investment.
 

While 2011 finished with a wave of lease breaks from tenants keen to buy their first home, 2012 has begun much more positively for the local rental market.
Over the past month our team has been experiencing the traditional peak season that occurs at the beginning of each new year. While the surge of relocating Uni students is yet to hit in full force, families searching for a home in preparation for the school year have certainly been active. Well presented 3 bedroom homes close to the city with asking rents from the high $300’s to mid $400’s per week have attracted the strongest interest, leasing in just 2-3 weeks.
Throughout the remaining weeks of February, we’re expecting rents to remain steady while demand for units and share houses increase in response to country and international students returning to the market.

We’ve always known that our team is made up of individuals who are among the best in this industry and now the rest of the State knows too. Erin Murtagh and Sam Dowler have both been named Finalist Property Management Practitioner’s of the Year in the 2011 REISA Awards for Excellence in Real Estate.

From hundreds of entries it’s come down to just six stand out candidates whose ethical practices, dedication to service and eagerness to shape the future of this industry have elevated them above their competition.

We are incredibly proud to have two of our own Property Managers recognised on a State level.

Congratulations Erin & Sam.