Hunting down the best property manager requires as much research as the buying does, industry experts say.
Run Property chief executive Rob Farmer says the most common question he is asked is: “How do you tell the difference between a great property manager and a bad one?”
He says a property manager needs to ensure the tenants are looked after, the appropriate legal documents are in place, maintenance is carried out professionally, rent is collected on time and tax records kept.
“This protects the value of my investment, helps to attract better-quality tenants and minimises my worries,” he says.
Farmer says understanding the local market is a property manager’s greatest asset because, in his opinion, many landlords are receiving 10 to 20 per cent less in rent than market value dictates.
“It’s a sad fact in Australia that the property management division of a typical real estate company is the ‘poor cousin’ of the sales division,” he says.
“Therefore, the property manager does not get the support, systems and training to help them do a better job.”
Stephen Wasley is a landlord in the eastern suburbs who has several residential investment properties managed by Run Property.
“I think what’s important as a landlord is choosing a property manager who you click with, who has a great personality and knows the job inside out. What you don’t want is some agent who’s just waiting to jump-start their real estate career and get into sales,” he says.
“You need to have good communication with them and not just during the letting process – it should continue throughout the tenancy as well.
“The experience I have had in the past is that so many just don’t return calls. You don’t want to have to be calling them.
“Part of that good communication is them letting you know when you’ve got a good tenant because that makes a difference when it comes to reviewing the rent.
“If they don’t suggest a rent review then they’re not doing their job, but if they know you’ve got a great tenant who pays on time and looks after your property then they can suggest a smaller rent increase so the tenant will stay on.”
Wasley says he has managed his properties himself in the past, but the manager of two Bondi eateries says time is money.
“That may not have been the smartest move, because even though I saved money it was a lot more time-consuming than I thought. You really need a good system in place.
“I guess my feeling now is that if you have got a good property manager that you have confidence in, then the benefits far outweigh the costs,” he says.Michael Conolly, head of property management for McGrath Estate Agents, says what makes a good property manager a great one occurs after they have been hired.
“You should think of it as a long-term relationship, and you need to remember that this is about maximising return for your asset,” Conolly says.
Conolly says hiring a property manager should be thought of as buying an asset such as a car or performing a job interview.
“Why don’t you consider doing a test drive of the property manager? Don’t be afraid to ask them some hard questions. I’m always surprised by how many people don’t even ask for previous testimonials,” he says.
He says there are several key questions landlords should ask, primarily how the tenant application process is done.
“How do you check the applicants and can you show me? It’s easy to get a tenant, but you want a quality tenant,” Conolly says, adding that in Moreton’s tight rental market where vacancy rates are sitting around 1 per cent, landlords do have the upper hand.
“There should be no excuses to have anything other than quality tenants in this market,” he says.
Article from the Telegraph May 19, 2012 by Kristen Craze.
What do you think is the most important thing when selecting a Property Manager in Moreton?
Mon Komo Redcliffe Records Strong Occupancy Rate
7 Common GST Mistakes On Property
It’s great to see the property market in South-East Queensland going in the right direction. With that comes an upswing in volume of transactions and GST consequences to consider.
GST and property has always been a touchy area and the Australian Taxation Office have remained active and vigilant in identifying problem transactions.
With the market now moving in the right direction we thought it a good time to set out the most common mistakes we see in the market by developers and professionals. So, here are 7 Common GST Mistakes on Property:
#1. CHARGING GST ON PRE-EXISTING RESIDENTIAL PREMISES.
For some reason this continues to happen almost 15 years after GST was introduced. If a developer sells pre-existing residential premises there will be no GST effect [they are input taxed supplies]. This is despite the fact that the developer is GST registered and selling to another GST registered developer. To be clear this only applies to pre-existing houses, units, apartments, etc … not land that may happen to be in a residential area.
#2. FORGETTING TO AGREE THE MARGIN SCHEME IN THE CONTRACT.
While most developers are aware that selling under the margin scheme can save GST on sale it is still often left out of the contract in error. The only way to fix this problem is to go to the purchaser after settlement to agree the margin scheme was used. You then still have an additional step in asking the ATO to waive the normal requirement to have this agreed prior to settlement. If this doesn’t occur you have lost the full 1/11th in GST on sale.
[Tip – make sure you can use the margin scheme in the first place]
#3. CLAIMING GST ON A RESIDENTIAL PROPERTY BEING BUILT WHERE YOU INTEND TO HOLD THE PROPERTY.
No GST can be claimed where you intend to rent out a property for residential rent. This is the case even if you intend to sell the property as new residential premises within 5 years of construction.
[Tip – make sure you have considered the cash-flow effect of not being able to claim back GST on construction costs]
#4. FIRST TIME OR PRIVATE DEVELOPERS REGISTERING AUTOMATICALLY FOR GST TO CLAIM CREDITS BACK.
When you undertake a development you need to consider whether or not you should register or if you are required to be registered for GST for your specific development. If you are subdividing land that you have held for a long term for a capital purpose such as rental, then you might not need to register for GST. If you choose to register for GST when you’re not required to by law you could be giving a lot of profit away by unnecessarily paying GST on the sale of the development property.
[Tip – do the maths and seek advice on your personal circumstances]
#5. IF A PROPERTY IS USED COMMERCIALLY THEN IT WILL AUTOMATICALLY ATTRACT GST ON SALE.
This is another common misconception. Traditionally with GST the type of property tends to determine the GST treatment. In other words you should look at the property and understand what its normal form and function is. Don’t just look at how the property is used. This will mean many properties used in a commercial way may not actually be subject to GST.
[Tip – you normally shouldn’t be charging GST to a commercial tenant in this circumstance or claiming back GST credits]
#6. IF YOU HAVE CHARGED OR PAID GST WHERE YOU SHOULDN’T HAVE IS IT DIFFICULT TO DO ANYTHING ABOUT IT?
We have dealt with numerous circumstances on both sides of the fence where we have been able to get a much better GST result. In some cases the ATO has been actively engaged with to ensure a good outcome.
[Tip – it’s still easier and less costly to get it right up front prior to settlement]
#7. IT’S TOO HARD TO GO TO THE ATO TO GET A PRIVATE RULING ON GST.
This is not the case. GST and property tend to be one of the more common rulings the ATO are asked for. They also tend to be quick to resolve where you know what information is required to be provided up front. This is one way to deal with contentious GST matters under contract.
We see these types of mistakes happening all the time [along with many others]. But now over to you, leave your comments below and tell us what other GST mistakes you have experienced on property.
Queensland Says No New Taxes on Foreign Property Buyers in Bjelke Petersen-like Strategy
The Queensland government has ruled out introducing new taxes on foreign buyers of residential real estate.
They are the only state that actually monitors foreign investment, so were in the box seat to implement such a tax regime.
The rejection comes after the populist Victoria Labor government’s recent budget unveiled a new tax regime that will seek to tax foreign buyers and foreign owners.
Queensland has vowed not to follow Victoria’s lead and introduce any new taxes on foreign property investors.
Treasurer Curtis Pitt said Queensland welcomed foreign property investment.
“We’re ruling out any stamp duty surcharges for foreign investors who purchase a house in Queensland,” said Pitt.
“We’re also ruling out any land tax surcharge for foreign investors in this state.”
The Victorian state budget, revealed on Tuesday, included a 3%t stamp duty surcharge for homes from July and land tax increases of 0.5% from 2016 for offshore-based investors.
News Ltd reported Queensland executive director of the Property Council, Chris Mountford saying the action will strengthen Queensland’s position on the global investment map.
“In particular it creates a compelling case to invest in Queensland over Victoria.”
Nothing new for Queensland as that was how former premier Joh Bjelke Petersen saw the state into an upswing when Queensland didn’t have death duties like other states.
It was in 1977 when the Premier of Queensland Joh Bjelke Petersen abolished death duties and a wave of Australia’s elderly headed towards the Gold Coast with the high rise following as dying in Queensland became a tax avoidance scheme and Surfers Paradise became a retirement haven.
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