Landlords Newsletter March 20 by sofiaie


									                                                         Dubbo (02) 6882 1755

 P r o p e r t y                                                   I n v e s t o r ’ s                                        N e w s
                                                       M a r c h                              2 0 0 9

     Kim                           Susan                  Brenda                 Shiloh           Brooke                Sarah                 Tim

 C o n t e n t s                                                     First time investors: Should I use an agent?
Page 1                                           One of the major dilemmas for first-time property investors is whether to manage the property
* First time investors: Should I use an agent?   themselves or use an agent.
* Inspirational Tip
                                                 Most experienced property owners would recommend the latter. While property managers will eat
* Choice Home Loans
                                                 into your earnings, generally taking a 5 percent cut of the weekly rental (although this can go as
Page 2                                           high as 10 percent), most would say it's well worth it.
* How Debt Demon Pushes Up Prices                Being a landlord after all is not for the faint-hearted. You really need the time and the patience to
* Properties Recently Rented                     deal with your tenants. If there is a catastrophe at your property — say a gas leak — then it's you
* Residential Management Fees
                                                 who will be called at 2am if you don't have a managing agent.
* Investment Properties for Sale
                                                 There are also the personal issues if disputes arise. It's much better to be at arm's length and have
                                                 a third party handle any nastiness that might ensue.
                                                 Finding suitable tenants is also an area where an agent can prove invaluable, not only when you
                                                 first enter the property-investment market but also when you need to find new tenants. An agent
Inspirational Tip                                will invariably have potential renters on their books, which can mean you are not left for weeks
                                                 with an empty apartment.
                                                 It's common practice for agents to charge an additional amount for letting or re-letting your
                                                 property that is usually equal to one week's rent.
                                                 Taking a DIY approach means once you find a tenant, you'll have to organise the tenancy
   “It's not what you are                        agreement and lodge the rental bond with the Office of Fair Trading in your state. Again, an agent
    that holds you back.                         can streamline this process and make sure everything is done according to law.
                                                 The ongoing role of the managing agent includes the collection of rents, repairs and maintenance
      It's what you think                        and conducting regular property inspections.
           you're not.”                          It's important to remember that just because you own the property, you don't have the right to drop
                                                 in at any time you choose.
         Denis Waitley                           In NSW, for instance, you are only allowed to conduct four inspections a year and you have to give
                                                 your tenants at least seven days' notice of your intention.
                                                 Terminating a lease can also be problematic. What are the tenants' rights in your state? What are
                                                 your rights? In NSW, for example, once your property becomes tenanted, you have to provide
                                                 your tenant with a copy of The Renting Guide, which outlines their responsibilities.
                                                 If you choose to go down the managing agent road, then make sure they are licensed.
                                                 Of course, if you have the time and inclination you can save money by being a private landlord, but
           What is Your                          it may prove false economy.
                                                 Joe Catanzariti, president of the Law Society of NSW, says owning an investment property is "not
             Resolution?                         a picnic".v
q   Become debt free?                            "You are a landlord and you need to account for it with proper records and proper books," he says.
q Rearrange/organise your finances?              "It can be a lot of pain and hassle."
q Relocate?                                      As a landlord, you should take out landlord insurance to cover you for malicious or accidental
q Purchase an investment property?               damage by a tenant, any legal liability that may arise and also the loss of rental income due to any
q Purchase a new business?                       malicious damage or absconding tenants.
  Start 2009 with a fresh start
                                                 According to insurer Allianz, 19 percent of claims made against landlord insurance in 2008 were
                                                 due to rental default and it expects the figure to rise this year given the tough economic conditions.
and let us help you achieve your
                                                 There may be many opportunities to buy into the property market now with low prices, low interest
      financial resolution.                      rates and low vacancy rates but don't squander these advantages by mismanaging your tenants.
      Life is all about choice                   Gillian Bullock –
 Matt Wright Mickaela Fairall
0400 022 630 0447 246 423                                          If you have a Property Management or Sales Question that you
                                                                   would like answered or clarified visit
   6882 4588
      “2008 National
                                                                       Kim is a director of Raine & Horne Dubbo, Licensed Real
                                                                      Estate Agent, Accredited Auctioneer and has over 18 years
Customer Service Champions”                                                     experience in the Real Estate Industry.
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                                                                                                                               Properties Recently Rented
     How debt demon pushes up prices                                                                                          Keeping you updated on the local rental market
It's little wonder property values have risen to the extent they have when compared
                                                                                                                               17 Pinehurst Avenue Executive style four bedroom home
with the large expansion of debt in recent years. Federal governments were at                                                  offering ducted air conditioning, gas points, separate family
pains, particularly from the 1960s to the 1980s, to control the financial system's                                             and dining room, great sized living areas, walk-in robe in
ability to create credit but were overwhelmingly unsuccessful.                                                                 main bedroom, built-in robes, Ensuite, double lock-up
                                                                                                                               garage, enclosed yard, great entertainment area and
In essence, the policy choice has been to directly target short-term interest rates                                            covered pergola. $350pw
and to allow credit to find its own level.                                                                                     9 Timberi Drive Situated in a lovely quiet street with easy
                                                                                                                               access to both private and public schools, this property is in
The problem here is that debt is given little weight in current economic debate when                                           immaculate condition and features three bedrooms, built-ins,
there are major policy implications associated with its allocation in the economy.                                             reverse cycle air conditioning, electric heater, gas point,
The property market is a example par excellence of this allocation problem.                                                    ceiling fans, lock-up garage, pergola for outdoor entertaining
                                                                                                                               and no pets allowed. $225pw
During the past eight years, since December 2000, the total quantity of credit                                                 58B Oxley Circle This lovely three bedroom duplex located
provided (in seasonally adjusted terms) to owner-occupied housing and housing for                                              in East Dubbo has all the features, including built-ins to all
investment purposes has risen from a little over $330 billion to a fraction under $1                                           three bedrooms, combined lounge and dining area, air
                                                                                                                               conditioning, gas points, dishwasher, lock-up garage and
trillion in December 2008. Interpreted another way, the total amount of debt granted                                           backyard for privacy. $225pw
for residential purposes alone has grown at a rate of 200 per cent in eight years.                                             100B St Georges Terrace Two bedrooms with built-in robes,
This is not the only sector that has seen dramatic growth in credit. Furthermore, this                                         heating & cooling, lock-up garage with internal access, large
                                                                                                                               living/dining area and enclosed rear yard. $190pw
expansion was on the back of rising interest rates, for the most part, during the
                                                                                                                               39 Hazelwood Drive Neat and tidy four bedroom home in a
same period. It is obvious that residential property prices are strongly correlated to                                         great location, with features such as built-ins, reverse cycle
the growth in debt.                                                                                                            air conditioning, Ensuite, lock-up garage, pergola and large
                                                                                                                               enclosed backyard. $270pw
Many parts of Sydney, particularly in the inner city, lower and north shores and
northern beaches, had risen by similar values. Sydney is not the exception, with the
creation of additional debt pushing up prices in almost every part of the country.                                                  Residential Management Fees
Now it is not hard to imagine, with such a massive debt exposure, what the effect                                              MANAGEMENT FEES
will be on property prices with a rising national unemployment rate.
                                                                                                                               Our commission on the management of residential
And we are already starting to see this with significant price falls in those same                                             property is 8% of the annual gross rent + G.S.T. =
areas.                                                                                                                         8.8%
The policy implications on sectors such as the residential property market are                                                 LEASING FEES
enormous - and become apparent during a downturn.                                                                              Letting Fee: 100% of first week rent + G.S.T. = 110%
Debt and the allocation of credit should not be treated like other commodities, as                                             Re-Letting Fee: 100% of first week rent + G.S.T. =
the financial crisis has recently taught us. And, since most of this new money has                                             110%
been used to buy existing dwellings, the only consequence was to overwhelmingly                                                Renewal Fee: 50% of first weeks rent + G.S.T. =
push prices up.                                                                                                                55%
The unlimited production of debt must have consequences. If rising interest rates                                              Leasing Fee: $16.36 + G.S.T. = $18.00
do not curb the demand and supply, then governments need to review methods to                                                  Statement Fee: $5.00 + G.S.T. = $5.50
tame the process.                                                                                                              Financial Year Reports (optional): $45.00 + G.S.T. =
Liam O’Hara - The Sun Herald                                                                                                   $49.50

                                    INVESTMENT PROPERTIES FOR SALE                                                                                                 This duplex is an
                                 Here is an inviting home with                          Starting with the quiet family
                                 a great floor plan located in a                        orientated area and well                                                   investment property.
                                 quiet and friendly area.                               presented street appeal, this                                              Situated in East Dubbo and
                                 Boasting two living areas,                             home also has two living                                                   with its close proximity to
                                 wonderful pergola and                                  areas, four bedrooms with                                                  Orana Mall 2/18 Viceroy
                                 saltwater in-ground pool.                              built-ins, large lined shed ideal                                          Avenue will suit many
                                 Features * Built-ins * 3-way                           as a rumpus room, generous                                                 buyers. Features * Built-ins
                                 bathroom * Ducted                                      pergola and an above ground                                                * Split system air
                                                                                                                                                                   conditioner * Back to base
  50 Websdale Drive
                                 evaporative cooling * Two         38 Meadowbank Drive pool with deck. Features *                   2/18 Viceroy Avenue
                                 gas points * Well-equipped                             Dishwasher and walk-in pantry                                              alarm system * Single
                                 kitchen * Large single garage            FOR SALE      * Gas point, wall unit reverse                                             garage with internal access
AUCTION Tues 21 April 6pm,                                                 $290,000                                                         FOR SALE
Raine & Horne Auction room       with internal access *                                 cycle air conditioning and                                                 * Side access to large rear
                                                                                                                                       Offers over $185,000        yard * Garden shed *
                                 Toolshed with power * Corner           JAMES PRATT     ducted evaporative cooling * 3-
  ANTHONY CHAPMAN                block with side access * Nice           0427 754 276   way bathroom * Second toilet *                   PETER ALLAN               Walking distance to Medical
     0419 248 693                street appeal * Close to              KIM HAMILTON     Watering system to gardens *                      0419 248 693             Centre and Macquarie Inn *
                                 schools, shops and hospital             0427 465 543   1,080m2 block * Immaculate                                                 NOTE: No Strata Fees
    3         1              1                                        4         1     2 family home                                     2         1            1
                         Here is a low maintenance,                                              Boasting a convenient                                        Peacefully located in a
                         secure and well-appointed                                               address with fantastic street                                leafy Eastridge Estate
                         duplex. This executive two                                              appeal, you can see this three                               street, this private four
                         storey home offers open                                                 bedroom home will offer you a                                bedroom home offers you a
                         planned living with fresh                                               stylish and yet content way of                               wonderful family abode. An
                         neutral surrounds. Features *                                           life. Features * Beautiful                                   ideal first home you are
                         Three good sized bedrooms                                               ornate cornices * Striking                                   spoilt with two living areas,
                         with built-ins * Two                                                    colour scheme * Dining room                                  four bedrooms, two
                         bathrooms – one on both                                                 with French doors to rear *
7A Longabardi Street levels * Well-equipped                        91 Whylandra Street           Well-equipped kitchen *
                                                                                                                                    32 Twickenham Drive bathrooms and a large
                                                                                                                                                              shady backyard with plenty
       FOR SALE          kitchen with island bench *                                             Modern bathroom * Built-ins in             FOR SALE          of space. Features * Tidy
  Offers over $259,000   Two split system air                             FOR SALE               main bedroom * Ducted                 Offers over $260,000   kitchen with under bench
                                                                     All Offers Considered
     KEN MONGAN          conditioners * Under stair                                              reverse cycle air conditioning *         KEN MONGAN          oven and large breakfast
      0412 041 363       storage * Internal access                   ANTHONY CHAPMAN             Open fireplace * Second toilet            0412 041 363       bench * Built-ins * Gas
     JAMES PRATT         from single garage * Secure                    0408 413 273             outside * Large double carport         KIMBERLEY JOM         points and ducted
      0427 754 276       automatic gate with remote                                              * Huge single garage with                 0439 492 484       evaporative cooling *
                                                                                                 workshop/storage area
   3          2        1 and intercom                                 3          1           3                                          4          2        2 Paved entertaining area
 Whilst all care has been taken by Raine & Horne Dubbo to ensure the                         The next Month End will be Wednesday 29 April 2009, statements will leave the
  accuracy of particulars herein, no warranty can be given by us, and                         office on Thursday 30 April 2009 and direct deposits should be in accounts by
            interested parties must rely on their own enquiries.                                                        Thursday 30 April 2009.
                                               Please advise us if you do not wish to receive any marketing material from our office.
                                                    Phone (02) 68821755: Fax (02) 6884 2229: Email

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