Rising rental listings signal ongoing softness across Mandurah rental market.

The last article I wrote to you was in June 2015, at the time Mandurah’s vacancy rate was at 3.25% and there were 505 properties available for rent in Mandurah and Surrounding areas. As I write there are currently 864 properties available and the current vacancy rate is 6.4%.

Why has this blown out? It is a combination of several related events that have transpired. All time low interest rates are allowing people to borrow money to purchase their own homes, large releases of house/land packages, a large down turn in the West Australian Mining Boom and a downturn in migration.

It is now more important than ever to TRUST your Property Manager. Our team is geared up now more than ever to be armed with the research and knowledge to get your property leased quicker and keep you own personal vacancy down.

The table below shows that the rise in the number of rental properties in Mandurah in the last 12 months has risen by 31.7%, which gives us a very low ebb in demand and a rise in supply, this combined is putting downward pressure on rental returns.

Mandurah-Rental

Table Source : Core Logic

Here are some points and strategies that will help you generate more income by reducing your vacancy rate.

  1. Standout Marketing– Investing in professional photographs is a great way to attract attention. With so many options for tenants, they are looking for reasons to exclude your property – Photos with poor lighting, out of focus or incomplete rooms do not scream RENT ME! The photos should be valid for 5 years and at a cost of around $100 (tax claimable), it acts as an insurance policy for faster leasing turnaround.
  2. See your property through the eyes of a tenant– This is a multi faceted aspect of leasing that is often overlooked by several owners.  What aspects will draw people in? What will turn people off? Are you competitively priced? Solving this can be as simple as a few minor cosmetic touch ups or a price adjustment.  It is amazing what a fresh coat of neutral paint can do to boost your appeal. Remember: Any money spent on improvements can be claimed as deductions in your next tax return.
  3. For Lease Signs– These are useful for 2 main reasons. It increases the level of awareness of your property both from people actively seeking accommodation as well as those who may want to move closer to a friend, family member, work place or school. It also helps people attending viewings find the property.
  4. Tax Depreciation Schedule– This is the gift that keeps giving! A professional report that itemizes all the wear and tear on your investment property and its fixtures and fittings. It is not uncommon for owners to receive upwards of $5,000 year on year come tax time. The report will cost around $650 (again tax claimable) and lasts for up to 40 years.
  • Appoint a PRO ACTIVE agent – when choosing your agency ensure they have a full time leasing manager who is solely responsible for ensuring they find the right tenants for your property. 
  • Listen to your Property Managers Advice – Your property manager is working in the rental market day in day out, they will offer the best advice and are highly trained and skilled to ensure that we manage your risk of vacancy to increase your return on investment.

While this might feel all doom and gloom we are still witnessing a high amount of foot traffic on our websites and to our open homes, the key is to get the property positioned right in this highly price sensitive market place and secure great tenants! That is our only goal for you.

So far this month we have leased 32 properties, this is a combination of our landlords listening to our advice and our property management team working extremely hard to get applications.

In the coming week or 2 one of our Senior Leadership members will give you a call if your property is vacant and we will together come up with a solution.

You can read the full Core Logic report on Rentals Nationally here:
https://www.corelogic.com.au/news/rising-rental-listings-signal-ongoing-softness-across-some-rental-markets

Rebecca Freeman

Mr Hooker Bear’s top tips for your pool

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Mr Hooker Bear dropped in to Poolwerx in Mandurah recently to pick up some tips on keeping your pool in top condition. Thanks to everyone at Poolwerx for their friendly welcome.

  • A long hot summer can influence the health of your pool with extra sun exposure, temperature spikes, storms and rain all effecting healthy pool water balance. Did you know, that prolonged exposure to UV rays burns chlorine that is required to kill bacteria, and combined with warmer temperatures can promote algae growth? Summertime definitely means your pool needs a lot more care and attention than usual.
  • The pool LOOKS clean, but you’re not really sure if the water is healthy? – Taking the time to vacuum and skim the pool frequently is only part of the battle when it comes to keeping your pool water clean, healthy and ready for family fun. To maintain optimum pH and chlorine levels, make sure you’re doing water tests once a fortnight, or even weekly in heavy use periods. Be sure to clean filters and basket regularly to ensure maximum efficiency.
  • Much like your home over Christmas the more visitors the pool has, the more clean-up is necessary afterwards. Chlorine levels should remain at 2-4 Parts Per Minute (PPM) to disinfect all microorganisms that can cause health issues. When your pool is getting a work out, it’s critical to do regular water tests and maintenance to prevent the water from deteriorating and causing health risks for your family like ear, nose and throat infections; all side effects of swimming in a dirty pool.
  • We know swimming with fido is fun and on a hot summer’s day it’s very tempting to let your dog jump in the pool to cool-off with the family, but this can have a significant impact on chlorine levels and water hygiene. Allowing pets, in particular dogs, in the pool can have serious consequences on pool health. Dog dirt in particular, rapidly depletes chlorine and dog hair can obstruct the filter, leaving your pool at serious risk of an algae infestation!

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    For more information please speak to the Mandurah Poolwerx team.

Guide to Property Investing in Western Australia

couple in searching the real estate for a purchase

Property is one of the most popular assets any savvy Australian could have. From real estate moguls to mum and dad investors, everybody has a place at the table of building wealth through housing. However, many people end up being overwhelmed or confused by the process – to help you get started, here is a crash course in WA property investment.. Read Full Article

5 Trends to watch out for in 2017

5trends2017

Booms, busts, bubbles, oversupply, undersupply, strong growth, no growth … the property market has attracted plenty of headlines over the past 12 months. However, in reality, markets in 2016, generally, tracked like they did in 2015.

This is because the fundamentals that drive real estate markets – interest rates, supply, employment and population growth – saw little change over the year. If anything, these metrics moved further in favour of buyers with interest rates being cut twice and the national unemployment rate tightening over the course of 2016.

Download our full report here.

Transparent Negotiation – What, how, why?

transparent

So you’ve started seeing the words “Transparent Negotiation” pop up on real estate listings and you’re wondering what it means. Well, the answer is pretty simple… Transparent Negotiation is a totally transparent way of negotiating real estate transactions, and has been developed by agents to alleviate the frustrations and pitfalls of other selling methods. 

It blends the best characteristics of more conventional sales methods (like Auction and private treaty) into one flexible, fair and totally open method of sale, and creates an environment where agents can be totally transparent with all parties involved.

Sellers… Imagine knowing exactly how many buyers were going to be submitting offers on your property weeks before the set sale date. Or, imagine someone presenting you with an amazing offer prior to your Auction date, and still having the opportunity for all the other interested buyers to openly compete with that offer!

Buyers… Imagine never missing out on a property because you didn’t know how much you needed to pay. Imagine knowing all other buyers’ prices at all times (like an Auction) but without a public bidding process. Instead, you can bid from the comfort and privacy of your own home, and take your time to consider your next price.

Agents… imagine always being able to get your vendor the best price in a short time-frame by being able to include all buyers (e.g. those with finance or other conditions). Imagine an End Date Sale that was open and transparent, where the buyers could continue negotiating until you truly knew you had found the true market value of the home.

It really is a win-win for sellers, buyers, and agents alike – and is why agents across WA (from Broome to Bicton) are starting to adopt this new method of sale.

How does Transparent Negotiation work?

If a property is for sale by Transparent Negotiation, interested buyers are asked to submit their terms and conditions (things like settlement period, finance clauses and deposit amount) for the seller to approve. They’ll also be asked to submit a starting price on a separate form (which becomes like your ‘bidding sheet’ during the Transparent Negotiation). Your starting price does not have to be your best or highest offer (save that for the transparent negotiation). Only approved buyers (buyers who have had their terms and conditions accepted) can participate in the Transparent Negotiation.

The first starting price that the agent receives will become the advertised price for the property. If another buyer submits a higher starting price, that new higher price becomes the advertised price… and so on. This process can continue right up to the advertised date of the Transparent Negotiation.

However, if a starting price is submitted during this period which the seller would be happy to accept, the Transparent Negotiation may commence early (before the advertised date of the Transparent Negotiation) and all approved buyers will still have the chance to participate.

This process not only enables all parties to arrive at a true market value, but it takes the guesswork out of knowing what to pay by knowing what other people are offering to pay.

Another major plus for Transparent Negotiation is that it utilises technologies that we all use on a daily basis. Rather than bidding in public, buyers can submit their new price remotely by scanning, emailing, or sending a photo of their bidding sheet to the agent with each new price increase. This means buyers can bid from anywhere in the world as long as they have internet/mobile phone reception.

During the Transparent Negotiation, the agent informs all buyers of each new price that is received, giving everyone the opportunity to increase their price if they wish to. As the price increases, buyers will stop bidding or can withdraw from the Transparent Negotiation at any time if the price exceeds their budget. The buyer with the highest unchallenged price acceptable to the seller becomes the successful purchaser of the property – and the owner signs off on the bidding sheet to confirm the sale.

Why was Transparent Negotiation created?

Transparent Negotiation is a culmination of the knowledge and experience of some of WA’s top performing real estate agents and auctioneers, and has been designed to take the process of selling real estate into the 21st-century.

It brings together the best aspects of traditional sales methods, and removes the parts that don’t work so well.  By doing things just a little bit differently it puts trust and fairness at the forefront; giving sellers greater control and buyers a greater feeling of fairness.

To find out more about the Transparent Negotiation process and its success, please call us on 9586 5555 or email mandurah@ljh.com.au

RBA Rate Decision – October 2016

Effect on property markets.

Today’s decision by the RBA will have little impact on Australian real estate with property markets continuing to ramp up for the traditional spring time surge in activity. The two official cash rate cuts so far in 2016 (May and August) have continued to support buyer demand across most regions. This is evident in the very strong performance of auction markets with clearance rates consistently above 75% in both Sydney and Melbourne. Despite the onset of spring, listing numbers continue to hinder sales activity in some capital city markets. However, it’s hoped that the slow down in price growth will prompt prospective home owners to list their property over the coming spring and summer period.

rbaKey indicators

Capital city home values rose 1.0% in September and 7.1% over the past year. – Over the past 3 months Melbourne home values have recorded the strongest growth at 5.0% followed by Canberra (4.5%), Sydney (3.5%) and Adelaide (2.6%).
New listings in capital city markets are now -3.3% lower compared to this time last year.
The unemployment rate tightened by 0.1pts to 5.6% in August.
Australia’s population grew at 1.4% over the year to March 2016. This was led by Vic (1.9%), NSW (1.4%), ACT (1.3%) and Qld (1.3%).
Australia’s GDP increased by 0.5% in the June quarter, taking growth to 3.3% over the past year.
The Australian dollar fluctuated between US$0.74 and US$0.77 over the past month.

Source: RBA, ABS, CoreLogic

 

Mortgage shortfall? There may be a solution.

While many people successfully buy and sell property every year, unfortunately there are some cases where the sale price may not cover the outstanding mortgage. While this can seem like an overwhelming situation there may well be a possible solution….

The bank will notify your settlement agent (prior to settlement) indicating there will be a shortfall between the sale price and the outstanding mortgage.

When the shortfall is considered a smaller deficit (for instance, $20,000-$30,000) there is scope for the seller and their agent to talk to their bank and work out an alternative before having to sell the property as a mortgage in possession. The major banks do have departments which can deal with these situations. Depending on the institution, there may be a hardship team; a credit collections solutions team; or the shortfall voluntary sales and settlement team. The hardship teams for the four major banks are:

  • Westpac – 1800 067 497
  • Commonwealth Bank – 1300 720 814
  • ANZ – 1800 252 845
  • NAB – 1800 701 599

For a comprehensive list of hardship team contacts, visit the below:

http://www.doingittough.info/Your-Bank-s-Hardship-Team

Top 5 traits of a good landlord

Life as a landlord can be challenging if you don’t earn your tenant’s trust and respect. By aiming to be the best landlord you can be, you will likely find the role more enjoyable and attract better tenants. Here are five qualities that all good landlords have in common – how many traits do you possess, and what areas do you need to work on?

5_qualities_of_a_good_landlord

1. Good landlords are inquisitive  The best landlords know exactly the right questions to ask potential tenants. Highly inquisitive, with sharp minds, they genuinely enjoy getting to know people and have developed great intuition. This helps them to select reliable tenants to rent their property, and to avoid bad seeds. What’s more, they’re not afraid to ask the tough questions – although they always do this with the utmost respect and courtesy for all applicants.

2. Good landlords are reliable and trustworthy  At first glance you might think, hang on a minute – aren’t tenants meant to be the reliable and trustworthy ones? But renting a property is a two-way street. There needs to be mutual trust between both parties. The more your tenant trusts you (and vice versa), the healthier your professional relationship will be, and the longer it will last. Finding tenants can be time-consuming and costly, so make sure you put effort into developing a solid relationship with your current occupants. This will minimise the risk of conflict (or of your tenants paying you late!).

3. Good landlords are excellent communicators Problems often arise when landlords and tenants stop communicating regularly. Good landlords keep the lines of communication open throughout the entirety of the tenancy, not just in the beginning of the agreement. They check in regularly to make sure the property is in good condition, there’s no issues that need to be fixed, and that the tenant is comfortable and content. This helps to foster a sense of trust (as per point two) and has the added bonus of helping you stay on top of maintenance.

4. Good landlords are proactive When it comes to property, there’s always the risk that something might go wrong unexpectedly. A pipe could burst, a window could break, the shower could stop working. Whatever the trouble, it’s important that your tenants can trust you to fix the problem quickly and to your best ability. If you take too long to respond, this could lead to resentment, conflict and ultimately to the tenant leaving or potentially even taking legal action. If for some reason you can’t respond to the problem quickly, try to arrange someone else to respond on your behalf. It’s all about showing the tenant that you care and that you are working hard to resolve the issue.

5. Good landlords are highly organised  Being a landlord requires a fair amount of paperwork. The best landlords are highly organised and don’t let the paperwork get on top of them. They aim to stay one step ahead of the game at all times. For example, they always have marketing material waiting in the wings in case their tenants decide to suddenly hand in their notice. Or, they schedule in things like rent reviews, contract reviews and property check-ups well in advance, so nothing is sprung on their tenants unexpectedly. Good time management skills are a must, and will reduce your chances of experiencing stress or conflict.

Learn more about property investment. Download our free guide to finding the best tenant for your rental:    https://www.mypropertylife.com.au/property-investors-guide-to-finding-the-best-tenants

Source: mypropertylife.com

Savvy Gen Y’s New & Innovative Ways to Buy Real Estate Infographic

6 New and Innovative First Home Buyer Trends Infographic

New Buyer Trends for Under 30’s

Rising youth unemployment numbers, the mounting cost of property in Australia and low level of wage growth has fuelled speculation that First Home Buyers are being priced out of the property market, however new research by LJ Hooker shows Generation Y are finding innovative ways to get their foot on the property ladder.

According  to LJ Hooker’s Head of Real Estate, Christopher Mourd young property hunters in today’s market have changed their buying habits to overcome issues faced in our evolving property markets, adapting the way they buy, use and invest in property to suit the way they want to live or to suit their budget and investment strategy.

“It seems to be the case that while policy makers and industry groups have been consulting on the best approach to help, the younger generation has been working behind the scenes to find innovative new ways of ensuring that they can secure their piece of the Australian dream,” he said.

“There are no doubt challenges faced by first home buyers, however many savvy Gen-Y’ers see investing in property as a long term venture, not just somewhere to live.”

In Fact, the latest consumer research from realestate.com.au shows that 23 per cent of those under 30 searching for property were investors and so will go that extra mile to secure a property.

 

LJ Hooker Research Reveals New Buying Trends

According to LJ Hooker Research Manager, Mathew Tiller there have been a number of factors that have influenced property hunters under the age of 30 to explore non-traditional ways of buying property, including; affordability, lifestyle choices, location and income and employment.

“The biggest driver changing buying habits of those under 30 has been the rising cost of property. The national average loan size for a first time buyer was $326,000 as of March 2015; a growth of 14 per cent over the past 5 years and 58 per cent since 2005.  Price growth has also dramatically slowed the time it takes to save up for a deposit,” Mr Tiller said.

“Also, rising levels of youth unemployment and low levels of wage growth since 2009 have not matched recent strong property price growth seen in capital cities. This has inhibited even those with secure employment from wanting to purchase their first property due to job security concerns and an inability to save for a deposit as fast as property prices have risen.”

These various economic, social and demographic shifts have resulted in a number of non-traditional buying trends emerging for those under 30. Here’s a fun infographic showing you what those trends are:

The Buyer Trends in More Detail

Rentvester®

The most common new buying habit, first identified in LJ Hooker’s The (new) Australian Dream white paper, is that of the rentvester.® This buyer is currently renting, loves their lifestyle and doesn’t want to relocate from the area where they are presently living. The problem is that they can’t afford to buy in this area. Rather than disrupt their current lifestyle these buyers purchase a property in a more affordable part of the city or country, and rent that property out while they remain as tenants in their current location.

Team up

Younger buyers have looked to overcome the affordability challenge by splitting and sharing the cost involved in purchasing a property. They have done this by teaming up with a family member, friend or business partner in order to buy a larger property to co-inhabit or as an investment. The major decision here is how to structure the ownership arrangement.

Mr & Mrs fix it

Young families have looked to get into a larger house in their preferred area by purchasing an older smaller home which usually sits at the bottom of the price scale for the area. Generally, these properties are in need of major renovation; however, they allow buyers to add rooms and levels as their families grow.

Build ‘em up

Another more affordable way for young families to get into a new house is for young buyers to move out of their local area and into a newly built suburb. This has seen demand for house and land packages in new estates rise considerably over the past few years. For those not willing to compromise on location, purchasing a vacant lot and building from the ground up has also been away to remain within their preferred area.

Buy now pay later: Purchasing off the plan for extended settlement

Capital city markets have seen strong growth in the number of new developments being approved; this rise has been in line with an increased popularity of apartment living. Purchasing “off the plan” allows a buyer to put down a deposit now and not have to deal with the mortgage repayments until construction is complete. This has been popular with the under 30s as it allows them to keep saving or maintain their lifestyle in the short term until they move into their new property. This has also been popular for the younger generation of investors who want to lock in today’s price and capture the capital growth over the construction period.

Thanks Mum & Dad: Using parents’ equity

Parents have ridden the property cycle over the past few decades providing many with a hefty equity uplift or outright ownership of their homes. This has in turn allowed them to use their financial position to go guarantor on their children’s mortgage or stump up some cash to help out with the deposit. Recent research by the NAB shows that first home buyers are increasingly turning to their parents for help in order to get into the property market. They found that 6.7 per cent of first home buyers now use the NAB Family Guarantee; up from 4.8 per cent in 2010. While some have called these buyers KIPPERS (Kids In Parents’ Pockets Eroding Retirement Savings) for the majority of first home buyers this is the quickest, most secure and best long-term financial solution to get a foot on the property ladder.

More tips on buying property in Mandurah.

 

Preparing For Storms

Dangerous storms are the most common natural hazard in Australia and on average, cause more damage and destruction than cyclones, earthquakes, floods and bushfires.

STORM-DAMAGE

Each year from May to October, storms, including, tornados, thunder, lightning, hail, flash flooding and gale force winds cause major destruction to the southern half of the State from Kalbarri to Israelite Bay. They are unpredictable and the damage they can cause should not be underestimated.

Most storm damage to homes occurs from loose and broken roof materials, fallen trees and branches and flooding from blocked gutters and downpipes. You can stay safe and reduce damage to your home by being prepared.

Preparing your home is your responsibility.  Make preparing your home inside and out a priority and take these few simple steps to minimise damage from storms.

  • Check your roof and gutters for damage or loose material
  • Clear gutters and downpipes of leaves and blockages
  • Trim branches near your home and hire a contractor to clear trees from power lines
  • Clear rubbish from your yard, balcony or patio and put away any loose objects
  • Prepare an emergency kit with portable radio, torch, spare batteries, first aid kit and family emergency plan
  • Ensure your family understand storms and the risks
  • Prepare an emergency plan including a relocation plan in case your home becomes flooded.
  • Have a list of emergency phone numbers at hand

Consider what you will do with your pets.  Do you know how to turn off the gas, electricity and water supplies? Check if you have adequate home and contents insurance.

You can keep up to date with latest storm warnings and advice:

  • through news bulletins on radio, TV or online
  • on the Bureau of Meteorology’s website bom.gov.au
  • by calling the Land Weather Warnings and Flood Warnings Advice Line on 1300 659 213

Or for more information: