PROPERTY Contents n Jolimont is a real estate jewel n Mismanaged stratas could see owners out REPORT of pocket n Palm readers are handy Edition Four 2004 Investors gain advantage with specialised property managers. . . The growth of residential property investor numbers over the past two or three years has been mirrored by the emergence and expansion of specialist property management companies. Though Gow Real Estate is by no means a new business, the increase in the numbers of investors has undoubtedly resulted in an upsurge of properties under our management. Having been specialists in property management for many years, we've seen the highs and lows of property investment and we've also seen a multitude of ways that people choose to have their properties managed. The options are: (1) doing it themselves, (2) having real estate agents manage their property as an adjunct to the main activity of selling property or (3) utilisation of property management specialists. To our mind, specialisation in property management is the key to giving property investors the greatest likelihood of a successful outcome from their investment. kly updates In recent years three public listed property management companies Wee who own ties, that bec ome vacant, rental proper erty management team have entered the Perth market, but this number is now back to one. Costly internal overheads, lack of big listings, auditing requirements and rigid office procedures have not helped their cause. Clients prop vided by our p in making a decision o n g pro are now bein information to hel There has never been a time when with important strategy. g property man agement ow providin specialisation has been of greater importance. ant we are n e received erty becomes vac espo ns When a prop eekly update as to the r covers phone Extensive expertise is required to successfully conduct a property owner s with a w proper ty. This ysical management portfolio and to ensure the interests of the investor, the ising their hers) and ph from advert site visits (ours and ot tenant and in the case of strata titled properties, the Council of en quiries, web Owners are all looked after. inspections. the number the advertising, There has never been a time when specialisation has been of responses to tenants to the Th e number of e response of prospective greater importance. Mistakes nowadays can so easily result in s and th ion making of inspection to the decis managers and owners being subjected to litigation. are usefu l indicators Without a strong working knowledge of the Residential Tenancies property an come to a process. anage r and owner c justment Act, a ready means of checking the credit credentials of prospective e property m ntal ad tenants, trust account control and a sound system of property From this, th ether there should be a re ract a decision as to wh e needed to att management, one is asking for trouble. work may b or perhap s upgrading The most successful type of residential property management suitab le tenant. businesses have been privately owned operations specialising in this particular niche. The “Property Report” is sponsored by Gow Real Estate as a service to assist owners, investors and tenants with their property considerations. For individual advice and an assessment on the likely selling price or rental value of your property in current market conditions - Phone: 9388 3488 Fax: 9388 3497 www.gowre.com.au 78 Excelsior Street, Shenton Park 6008 PROPERTY REPORT PAGE TWO Jolimont $1,050 while weekly median rent is $140. is a real estate jewel Being just four kilometres from the CBD and sitting on the western flank of Subiaco, Investors and owner-occupiers in plunged to $399,000. However, by June this it is not surprising to see that 55% of the the cosy little suburb of Jolimont year the price had soared to $500,000. No residential accommodation is investor have been on a roller coaster ride for doubt this healthy figure was aided owned. the past four years. somewhat by a million dollar plus sale in This high percentage of rentals could be the June quarter. However, the 2003-04 attributed to the suburb having a number of Based on a June-to-June time frame, the annual growth was 28.50%. commercial and professional enterprises as median price in the year, 2000 was a Jolimont's population sits just under well as sitting mid way between the St John respectable $347,000 compared to the 1,000 with a relatively small number of of God Hospital in Subiaco and the metropolitan average of $158,000. homes (including apartments) of 476. Only Shenton Park annex of the Royal Perth By June 2001 the suburb's median price 26% of properties are fully owned and 15% Hospital in Shenton Park. had climbed to $460,00 and edged up to are mortgaged predominately to owner There is also good road access to coastal $475,000 in the ensuing year. occupiers. beaches to the west. Alternatively, train and In June 2003 the median price had Median monthly loan repayments sit at bus access to the CBD is popular. Humble beginning for RPH's Shenton In the early 1960s, the late medico, building was completed, at a cost of about Sir George Bedbrook, was mentor to Park annex 300,000 pounds ($600,000), it became the a young Public Works architect, meeting place of ACROD (Australian In those days there were no building Brian Kidd, who had been assigned Council on Rehabilitation Of Disabled), codes or standards that specified what the The 'disabled' name has since been to design a dedicated facility for the design should incorporate to assist patient amended to 'disability'. specialised treatment of paraplegic mobility. patients as an annex for Royal Perth It was largely the interaction between Mr This early assignment set Brian Kidd on Hospital. Bedbrook and Brian Kidd on the design of a lifelong career course of architectural Shenton Park's early structure that led to the design of hospitals, aged care and specialty Some 40 years later Brian Kidd reflects facilities for the disabled people in the on how the Shenton Park annex was evolvement of today's comprehensive architectural specifications and Australian community. developed, saying how he would go to Mr (in those days) Bedbrook's West Perth Standards codes now required to be Today, the Shenton Park annex of Royal rooms, after patient visiting hours to incorporated into the designs of buildings Perth Hospital, is a sprawling complex discuss design features that should be for the provision of easy access for disabled providing a host of rehabilitation facilities, included to assist wheelchair-bound people people. helping to provide a better quality of life negotiate around the building. Once the Annex's initial paraplegic for those who need specialised support. PROPERTY REPORT PAGE THREE Mismanaged stratas could see owners out of pocket Most strata property owners are unlikely to be aware of the myriad of complicated rules governing such properties. Therefore, the owners of strata titled properties are at considerable risk of owners) can vary considerably from one AGM in relationship to the management of liability if the rules and regulations of the strata scheme to another, depending on the overall property. relevant Acts are not strictly adhered to and individual property needs. The list of possible problems goes on and administered in the correct manner. It's worth noting that a real estate agency on, well beyond the knowledge of most There are three basic ways a strata strata manager has to place all funds into a unqualified individuals who therefore may complex can be managed. They are either Trust account which, in turn, is protected by not know what actions can be taken to self managed by the owners, managed by the administrators of the Real Estate and remedy a situation. strata managers who are not necessarily Business Agents Act. This is known as a As Strata Company managers our role is fully qualified and aware of all aspects of fiducial or fidelity guarantee. to provide a financial, accounting and the Strata Titles Act and thirdly, strata This gives greater security than when the secretarial management service and to give manager companies, such as ourselves, funds are managed in an ordinary account general procedural advice relative to the who do manage the property strictly by the by a unit owner. He or she could amended Strata Titles Act 1995. book. misappropriate the funds in a fraudulent If you are a resident of a strata titled The requirements of Strata Companies act. complex and feel uncertain about aspects (all the unit owners) and their Council of Strata property management rules of the management procedures, please feel Owners (elected representatives of the include understanding the importance of an free to phone us on 9388 3488 for advice. Insurance cover Laughter at a premium is good Insurance requirements relating to Strata Companies and the ramifications for each individual lot owner can be very costly if there is an insurance claim for your health It seems that laughing, when the Company has failed to comply with the insurance provisions of the giggling and sniggering Strata Titles Act. decreases stress by releasing Section 36 of the Strata Titles Act places could find every owner in the complex endorphins natural opiates a legal requirement upon the Strata being held jointly liable for the portion of which are also released in Company (ie all of the owners of lots in the loss not covered by the insurance policy. exercise. Strata Scheme) to establish a fund for It is therefore vital that the Strata Laughing strengthens the immune administrative expenses sufficient for Company carefully reviews “replacement” system, can reduce blood pressure management of the common property, for as defined by the Strata Titles Act every and help reduces the chances of payment of insurance premiums and the year if it is to remain compliant. illness because more than 70% of discharge of other obligations. illnesses are related to stress which Control manifests as high blood pressure, Among its duties, the Strata Company Section 35 of the Strata Titles Act in digestive and bowel disorders, must effect a policy of insurance for setting out the duties of the Strata Company a n x i e t y, d e p r e s s i o n , f a t i g u e , “replacement value” which is defined by requires it to enforce the bylaws and to headaches, muscle tension, loss of the Strata Titles Act as not only referring to control, maintain and manage the common sexual drive and mood swings. the cost of rebuilding but also for expenses property for the benefit of all proprietors. It seems that in the 1950s we incurred in the removal of debris and Strata Companies cannot allow the lots laughed an average of 18 minutes a payment of architects, surveyors, and common property to fall into a state of day while in the year 2000 we engineers and others whose services may disrepair. If for example it failed to repair averaged just 6 minutes a day. be necessary for the rebuilding. potholes in the driveway that caused a Children laugh in the region of 400 If for example, a unit in a residential person to break an ankle, it may find the times a day while adults are lucky if strata scheme was burnt to the ground and insurer refusing cover, with the result the they laugh 15 times. In order to gain the insurance was not compliant with the individual owners could be held jointly health benefits from laughing we requirements of the Strata Titles Act, you liable for damages. need to laugh for 30 minutes a day. PROPERTY REPORT PAGE FOUR Land tax revolt Property managers, agents and property investors claim the cost of land tax Christine Gow is out of control which has seen an industry groundswell willing to take the fight up to the State Government, demanding reasonable reductions before the state election. Land taxes increased by $51 million each than an investor who owns two rental year since 2001. The top rate of land tax has properties equal in value to the couple, but been increased by 25% in the last three in different entities. years. These increases have reaped a land Many self-funded retirees who own a tax bonanza for the Gallop Government. second property, either as a rental or a beach The objective of the land tax revolt is to house for self use are finding land tax have the State Labor Government honour its election promise NOT to increase state charges excessive and in some cases we are seeing one of the properties being sold to Daughter taxes. The protest group wants the land tax and pay for existing land tax and reduce future land tax costs. set to make all exemptions and amendments restored to the position that existed when Dr Gallop's Each of the grievances put forward by the protest group is supported by a remedy they takeover bid? government was elected. want implemented. Christine Gow is currently Other demands the protest group wants is Those behind the land tax revolt will studying for a Diploma of for future land tax increases limited to any continue to advertise their objections to the Business Management at TAFE increases in the Consumer Price Index and a general public, petition the government and part time with the long term goal of review of the land tax system in order to lobby politicians from major parties in an taking over the real estate licence create a fairer and more equitable land tax. effort to make land tax a major election currently held by her mum, Dee. issue. Fairer libability A coalition has been formed between the When the licence changeover On the sale of a property that has been occurs, "hopefully," Christine says, in a Property Council, REIWA and the Urban subject to land tax, the protest group want couple of years, mum and dad, John, Developers' Institute of Australia in an will have a bit more time on their hands the vendor to be liable only for the period of attempt to resolve the inequities. Recent tax for those long lunches. time from June 30 until settlement date, in reductions announced by the Government line with other proportional payments such do little to relieve the land tax burden. Christine started working part time in as water, power and shire rates. the family business when she was 15 Further information is available from our Currently land tax is charged from July 1. years old and still at school. Duties, office. In addition, a petition sheet is with which most juniors will identify This means if a property investor sold the available for signing at our front reception. with, included washing coffee cups and property to an owner occupier, the investor filing paperwork. would have to pay a full year's land tax, even if settlement was in July. Palm readers are handy It has been full on for the past three Another irksome point is that land tax is Sometimes services improve with years since Christine secured a sales payable on an escalating scale based on the technology and at other times the and property management cumulative values of one ownership entity. opposite happens. qualification from REIWA and is now an accredited property manager. She For example, a husband and wife may own We're pleased to report that the has already sold several houses and is two rental properties and pay more land tax introduction of hand held Palm diaries has getting to understand the issues been of considerable benefit to improving involved in strata management. Should you require more our office efficiency. Hours of typing and After leaving school, Christine had information on any topic relating to dictating are saved. Property managers the opportunity to visit the USA for 12 real estate we are more than can now get on with the business of pleased to assist… months as an exchange student. She managing their portfolio and looking after requested a town or city near a beach, their owners investments. but ended up in Iowa, more or less slap Having used the Palm system for some bang in the middle of the US, but took time we become convinced of its the opportunity to repeat year 12. usefulness and recently upgraded the Living with a large 'Brady Bunch' software and hardware equipment for all sized family was also a new property management staff. experience for her. The hand help electronic diaries allow On her return to Australia, the Gow for reminder notes, predetermined family reciprocated and had a Brazilian appointment date identification and exchange student stay with them. verbal recording. They also have a still Apart from eventually taking over the image camera, a 'graffiti' writing stick and reins from mum, Christine wants to the data can be downloaded onto a build herself a property rental portfolio, Tel. 9388 3488 computer. An inspection and PCR buying places that need a little bit of The information contained within the template developed for property TLC. "I tried to do some of the Property Report is of an advisory nature renovation work on my first property, managers is used to both record the old only. Due to differences in personal but failed miserably," Christine reports and enter new ones. confesses. "So now I get professionals circumstances it is suggested that we give your situation individual The upgrade was to Palm Zaire 72 in to do the work." consideration before you proceed handhelds with an improved Yambay The company image could be in for a further with formal real estate decisions. MPartner property inspection software bit of a shock as Christine would love to which is ideal for recording data during have a motorcycle as her preferred property inspections and property mode of transport. Media Support Services (08) 9331 4581 condition reports.